Pivot #19: Resiliency, Taxes, and Relocation

1st Period - Resiliency 

Checkout this short clip from Nvidia CEO, Jensen Huang:

Resiliency is critical for success in business. As Huang points out, Stanford students likely have not had much struggle in their lives to date. By virtue of being at Stanford they are successful and highly capable. Hockey players are resilient. Wins and losses, the adversity in a season, cut from teams, battling injury, experiencing spurts of poor performance, playing for tough coaches, getting traded, the grind of training, etc. 

Hockey players have in spades what Stanford students can’t buy and what the CEO of the hottest company in the world thinks is critical. This is how you stand out from the crowd and make yourself a desirable job candidate. Marketing your story in a way that is transferable to other applications and understood by non-hockey people is crucial.

The adversity experienced in a hockey career makes the adversity of a sales position a breeze. Work on communicating your story that demonstrates resilience as a key characteristic. Brainstorm 4-5 stories that you can pull out in an interview setting. You need to communicate 1) the fact you are resilient 2) how that form of resiliency applies to this new profession and 3) why the employer should value it. Hockey players have an edge, even on Stanford MBA students. It takes critical thinking and self-exploration to hone in on those edges. 

2nd Period

The captain of the Toronto Maple Leafs, John Tavares, finds himself in a dispute with the Canada Revenue Agency (CRA). CRA is claiming JT isn’t paying his fair share of taxes to his home country. JT’s reps are saying they filed everything correctly. Tavares was a resident of New York when the Leafs paid him his first signing bonus of $15.25 million USD, and the Canada-U.S. Tax Treaty benefits Tavares, thereby reducing his tax liability to Canada. I think Tavares has a pretty strong case, myself.

Gavin Wealth Management, who I am guessing filed taxes on behalf of Tavares, published a one-pager laying out the facts of the case. I suggest you read it to learn more:

Gavin Wealth

I am not a tax guy, but I flag the situation for a few reasons. One, the result of the case will have a far reaching impact on NHL contracts, specifically for players that earn bonuses from Canadian NHL teams. Second, I’m fascinated by the off-ice professionals and resources the modern NHL player surrounds himself with. There is a clear trend of players building out more sophisticated infrastructure around them. Everything from skating coaches, chefs, investment management, and tax advisors. Players are becoming their own enterprises. With contracts increasing this will only continue. Third, player situations are complex. Imagine a player trying to file cross-border taxes on their own. Expertise is required and Tavares is certainly paying for it. Tavares must be a valued client, if Gavin felt compelled enough to address the public scrutiny by publishing a separate white paper on the situation. 

This will be an interesting case to follow.

3rd Period - ProRelo

In a similar vein as the Tavares story, the buildout of resources available to players is a fascinating trend to follow. Clearly something Pivot hopes to benefit from. This story is a great read from The Athletic. Annie Montoya and Lauren Ellerby, wives of former NHL players Al Montoya and Keaton Ellerby, launched their company ProRelo, a service dedicated to handle all the logistics for a player and his family when they get traded. The company handles everything from hiring movers, organizing the move, changing utilities, shipping vehicles, and everything else that comes with an NHL family having to move cities on a whim. Checkout their full services here.

Having lived the experience themselves, Annie and Lauren certainly understand the logistical challenge. The article highlights their first client, Zach and Bianca Bogosian, their four kids and German Shepherd dog who moved mid-season from Tampa Bay to Minneapolis. It’s actually surprising this service doesn’t already exist or at least isn’t widely used. The value-add is apparent. Trades can be very emotional times for the player and family. Having a third-party swoop in and start handling the situation is hugely valuable. For anyone going through a trade for the first time, it’s erratic, but ProRelo offers a systematic approach that reduces stress. Second, the family can join the player in the new city immediately. What used to be potentially a months-long process or even a player living apart from his family for the duration of a season can now be shortened to days. The more things are taken care of away from the rink, the more likely the player achieves on-ice success, a win-win for the player and new team. Third, ProRelo’s service fee is covered by the NHL team and there is no cash coming out of the player’s pocket. Historically, players would pay for all the costs associated with the move, save the receipts, then get reimbursed by the new NHL club. Now ProRelo handles all the costs and deals directly with the NHL club. Huge value-add. Additionally, the company is getting on the preferred service provider list of the NHLPA. 

I can see this business gaining traction quickly in the NHL and having a huge addressable market in other professional leagues. The women will likely have to do to some hiring in other NHL cities. The good thing is they only need 32 unique transition checklists, one for each NHL city. If a player is getting traded from Detroit, ProRelo can pre-identify the major local stakeholders they’ll need to work with–realtors, utility companies, schools, DMVs, etc. They can likely pre-negotiate contracts with a national moving company for more favorable terms. Overall, this is a super interesting business all in the spirit of adding resources to the player experience. 

Game Notes

• Good article on attracting young talent - Institutional Investor
• CapFriendly’s Q&A on LTIR and Cap Space - X
• 'Open people's eyes': How the NHL's evolved in the decade of data - The Score
• How the Rays have simplified the complex art of pitcher development - The Athletic
• Who is trying to buy TikTok? - WSJ
• The NFL Quarterback Who Gamed the System—and Hit the Jackpot - WSJ
• Fed Gets More Reasons to Delay Interest-Rate Cuts - Bloomberg

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