GTHL investigating alleged team sales amid calls for transparency
Published
The Greater Toronto Hockey League (GTHL) has opened multiple investigations into allegations that some teams and the non-profit companies that run them have been inappropriately bought and sold, executive director Scott Oakman said.
“The league welcomes any concrete information that any complainant may have pertaining to such allegations,” Oakman wrote in an email to TSN. “The GTHL does have legal and practical limitations in regard to the types of information it can access, including non-related private companies, cash transactions, etc. The GTHL… relies on officials to be forthright in providing required information to the league.”
Oakman would not say how many investigations are underway and would only say that a number of new cases have been opened since TSN began asking questions about the business of the league and a number of alleged transactions roughly six weeks ago.
A third party had been commissioned to scrutinize the allegations, Oakman said. He refused to identify who has been hired by the GTHL to investigate.
"Due to the nature of these particular allegations and potential legal implications, and to avoid jeopardizing the investigative process, the GTHL will not be disclosing any further details at this time," Oakman wrote.
The GTHL prohibits the buying and selling of its organizations, Oakman said, adding that in 2016, the league stopped the transfer of control of one organization after learning that there would be a financial consideration for doing so. Oakman refused to identify that organization and wouldn’t disclose details of the proposed transaction or how the GTHL learned of it.
News that the GTHL is investigating allegedly inappropriate transactions comes as the president of a GTHL organization and current and former NHL players who are members of the Hockey Diversity Alliance (HDA) said in interviews with TSN that there should be increased oversight of the non-profit organizations operating teams in the world’s largest minor hockey league.
Over the past two months, TSN has interviewed 23 GTHL organization board members, coaches, and team executives who collectively describe the GTHL as a major industry that league officials struggle to police properly.
Don Mills Flyers president Peter MacInnis, one of the few team officials who was willing to speak on the record, said in an interview that he believes the GTHL is facing a crisis.
Some organizations that purportedly are non-profits are being inappropriately bought and sold, MacInnis said, adding that side deals in which parents “buy” the right to control a team for a season, deciding on hiring or retaining coaches and even how much ice time players should receive, have become commonplace.
“We know what's going on and it’s a black mark on all of us who run our clubs properly,” MacInnis said. “We’re not happy with it, but there’s nobody to take action other than the league, or I suppose the government certainly could… Somebody sets up a shell company, and decides to say to some parent, ‘Look, you write a cheque to our shell company, and you can take this team and run it any way you like for a year.’ If you are the GTHL, how are you going to prove that? Are you going to take them to court? It’s a business transaction between two people. If the GTHL gets involved they're going to get sued.”
MacInnis said he’s skeptical the league has the resources to properly investigate allegations of financial impropriety.
“I don’t think we have the systems or mechanisms in place to be able to deal with it,” he said.
The call for improved governance comes after Akim Aliu – who helped co-found the HDA in 2020 to fight racism and intolerance in hockey – told TSN in a series of recent interviews that the GTHL and those who control the league’s 12 AAA organizations have thwarted his group’s effort to obtain an expansion organization that would have been called the Toronto Dream for nearly two years.
A source told TSN that Ontario government staffers are informally reviewing the GTHL’s business and determining whether Minister of Tourism, Culture and Sport Neil Lumsden has jurisdiction to scrutinize the league’s teams. Lumsden declined to comment.
It’s unclear what kind of transparency or oversight the provincial government might have over the GTHL.
“The GTHL would be open to discussing any measures that governments or a sport governing body could put in place to provide improved governance by member organizations or to prevent any undue influence being exercised over players participating in any sport,” Oakman wrote in an email to TSN.
While Oakman said organizations must provide the league with their annual budgets, none are posted publicly. GTHL organizations have not adopted a recommendation made in 2021 by a league committee for team fees and preliminary budgets to be posted publicly at least a month before tryouts, Oakman confirmed. He said organizations must show parents their team financial statements if they ask for it.
“Each year, when a club or division applies for membership in the GTHL, it must submit to the GTHL its annual return filed with the [Ministry of Public and Business Service Delivery], a current list of its members, directors and officers, its annual financial statements, a declaration that it operates as a non-profit organization and certain other documentation in accordance with the GTHL’s published regulations,” Oakman wrote. “GTHL regulations also include various disclosure requirements pertaining to the management of team finances, payments to coaches or to related parties and mandatory delivery of team budgets and budget updates to players and parents.
Aliu said that he’s come to understand over the past year and a half how minor hockey in the Greater Toronto Area has become big business.
“Everything is about money and control and power,” Aliu said. “It's coaches forcing kids to pay to go to their summer camps to be on their team the next season. It's parents buying age groups and putting in their own coaches and dictating ice time. It's teams being flipped for millions of dollars.”
While the GTHL’s bylaws say organizations must be non-profits and that the buying and selling of teams is outlawed, Aliu said the president of the North York Rangers told him during a meeting in July of 2021 at the GTHL’s head office that it would cost at least $1 million for Aliu and his partners to buy the organization’s AAA teams.
Matt Dumba Rangers president Claude Desjardins declined to comment.
“The GTHL never participated in, nor did Aliu ever indicate to the GTHL that any discussion between him and any GTHL members involving him taking control of an organization included any financial remuneration being sought by the outgoing executive members,” the GTHL wrote in a Feb. 27 statement.
Aliu said another AAA organization director offered his club for sale for $3.6 million.
One hockey parent whose son plays in the GTHL described to TSN his negotiations in July 2021 to buy a 25 per cent stake in a AAA organization for $1 million, and a current coach of a GTHL U14 AAA team told TSN that two parents approached him in October and informed him that they had “bought” the right to control his team for $50,000.
“We went for coffee. They showed me what the new lineup was going to be, with a few kids literally benched for two of three periods, and they told me to take it up with our owner if I had an issue, which I did,” the coach said. “I asked my owner how he was going to explain this to the GTHL and he told me he wouldn’t have to because it was an all-cash deal, all off the books.”
Several NHL players said they’ve become disillusioned with the GTHL after working alongside Aliu over the past year and a half trying to secure an expansion organization.
“People at the top do not seem to want to open the game up to everyone,” Minnesota Wild defenceman and HDA member Matt Dumba said. ”It’s greed over kids playing the game. These organizations that run these teams should be completely transparent. People buying and selling organizations for millions of dollars and turning the game we love into profits. I can’t get my head around it. Kids who are suffering in disadvantaged communities not having a chance to have the life development that hockey gives to you. I don’t understand the motives of these GTHL team owners.
“…How did we get to a point where non-profit teams are being bought and sold for millions of dollars? I think if the public saw the financials of these teams that people would be outraged. Maybe that would be enough to bring change. But I’m sure the [GTHL] team owners will fight tooth and nail against it because of their greed.”
Florida Panthers forward Anthony Duclair, who is also a member of the HDA, also called for financial transparency from GTHL organizations.
“It's crazy as you learn more about the league and go deeper,” Duclair said in an interview. “Our program would be free for most players and our kids would finally have a real chance to go to AA and AAA. It gives them an incentive. That’s the whole reason we do this, to find ways to bring costs down and attract more kids from our communities… But hockey leagues like the GTHL have made it impossible for kids of colour to come into the sport and to feel welcome.”
Duclair grew up playing AAA hockey in Laval, Que., before advancing to the Quebec Major Junior Hockey League.
“We come to the GTHL with open arms but there are people who are totally against it because money is flowing into their pockets,” Duclair said. “They are not willing to try or listen to anyone with new ideas. [The Toronto Dream] would have been so great for Black kids and women as well. Obviously, people in power don’t want to give up that power. We have seen the whole story with Hockey Canada recently and we need more transparency to show the public where funds for minor hockey are going. The GTHL teams should have to be open with their books.”
Anthony Duclair MacInnis said some of the GTHL’s AAA organizations generate significant revenue. The Toronto Marlboros, for instance, in most years host two major tournaments – a pre-season Friendship Tournament in October and a Holiday Classic Tournament over the Christmas break. The Marlboros said on their website that 88 teams played in the Holiday Classic event this year and paid entry fees of as much as $2,400 per team.
MacInnis, whose Don Mills organization has also hosted tournaments, speculated the Marlboros make $250,000 per year in profit hosting the two tournaments.
“If those tournaments are operating outside of a hockey club, even though they're being run by a hockey club, that's a salable business, so there’s your value,” MacInnis said.
Marlboros president James Naylor denied the organization makes that much profit.
According to a copy of the Marlboros’ financial statements, which Naylor provided to TSN, the organization generated $673,675 in revenue during the 2021-22 season, including $453,345 from player registrations and $197,895 from ice rentals to teams.
The Marlboros, the records say, did not make any revenue from sponsorships or fundraising and had $739,018 in expenses, including $361,802 in ice rentals, $122,081 in equipment costs and repairs and $92,872 in professional fees.
While the Marlboros’ Friendship Tournament, a pre-season event that took place in October, generated $110,800 in revenue from entry fees, the organization said it had $93,355 worth of expenses related to the event, meaning the tournament turned a reported profit of about $15,000. (The Marlboros did not host their traditional Christmas tournament because of the pandemic, Naylor said.)
Oakman said that after Rogers Sportsnet reporter Elliotte Friedman reported in February 2021 that Toronto Maple Leafs captain John Tavares and Winnipeg Jets forward Sam Gagner secured the AAA Toronto Marlboros organization, the GTHL secured an assurance from Tavares and Gagner that no money changed hands in connection with the transfer of control.
“The league does not normally publicly comment on internal matters involving specific organizations,” Oakman wrote in an email to TSN. “Disclosure by the GTHL to the press, of matters which are confidential to particular members of the GTHL, without the consent of the member, could involve legal or ethical concerns. The only reason it has commented on the specific Toronto Dream/HDA and Marlboros situations is because they have already elected to provide certain information to you.”
Lawyer Mark Blumberg, who works almost exclusively in the non-profit sector at the firm Blumbergs Professional Corporation in Toronto, says the industry needs more transparency and that non-profits operate under provisions of the Income Tax Act, which have not changed since 1917.
“There’s no doubt there are some non-profits today that are simply profit-making companies, and it is not supposed to be like that,” Blumberg said in an interview. “Unlike registered charities who are allowed to issue tax receipts, non-profits generally don’t have to disclose any financials. We have no idea how many billions of dollars’ worth of tax revenue we are missing out on because there is no political will to demand transparency and accountability from non-profits… Why doesn’t the government just insist that all non-profits post publicly say five years of their financial statements?”