The New York Islanders, owners of one of the lowest payrolls in the NHL, are planning to pay their players in intangible bitcoins beginning next season, according to a report by a leading tech website.
The switch, contingent upon league approval, was first reported this week by PopularOmniWire.com and quoted an anonymous source within Islanders management saying the team views bitcoins as a safer, more secure method of payment than the conventional NHL way of simply handing players salaries commensurate with the current market for their services.
"The Islanders are always looking for that little extra something that no one else has tried before," said the source. "In this case, it's paying players with money that doesn't actually exist anywhere but inside computers and are only good at select retailers and a ton of online casinos.
"This is the new, exciting technology that everyone is talking about in Starbucks and we want to be the first NHL team to get on board."
As of this writing, the quickly fluctuating exchange rate from U.S. Dollars to bitcoins is about $640 to one. So, instead of making $5 million dollars this season, Islanders captain John Tavares would pocket 7,813 bitcoins (BTC) which one expert said is much more palatable to the tastes of team owner Charles Wang.
"This is an ingenious PR move and right in Wang's wheelhouse," said Forbes digital currency reporter Adam Commodore. "Not only do you get to show off a new toy, but you keep costs low and probably save money in the long run by confusing the hell out of everybody for no reason at all."
At just a shade above $51 million, the Islanders payroll is the 29th in the NHL put of 30 teams. They are almost $13 million below the league's salary cap, ahead of only the Florida Panthers in both categories. New York has been dead last in spending for three of the last five seasons and have used some creative methods for staying compliant to the NHL's salary floor and avoiding sanctions.
Despite locking up some of their own players to lengthy deals, the Islanders have historically had trouble convincing free agents to choose them over their rival clubs. By enticing players with cutting edge Bitcoins, the Islanders are hoping to metaphorically strike gold with yet more out-of-the-box thinking and shed their image as downtrodden, penny-pinching cheapskates.
"This could have a monumental impact on the NHL's salary ecosystem," the source told PopularOmniWire. "Imagine you offer a premium unrestricted free agent $2 million for the 2014-15 season. He'll probably laugh you off the phone. But offer him 3,111 bitcoins, and suddenly, you've got his attention. Sometimes, that's all the opening you need."
NHL vice president Bill Daly did not comment on whether the Islanders could be allowed to use bitcoins within the league's current collective bargaining agreement nor did he discuss the possibility of the NHL locking its players out over virtual money in a few years.
Introduced in 2009, Bitcoin is the world's most famous and widely-distributed digital currency. Bitcoins are mined by networks of computers doing complex mathematical equations and can be traded, bought or sold at exchanges around the world. They are saved and spent just like regular money, but are not backed by governments or financial institutions.
Trading in bitcoins is not without dangers, though. As digital entities, the currency is vulnerable to hackers, frauds and software errors. At least one large bitcoin exchange, Japan-based Mt. Gox, filed for bankruptcy protection after losing 750,000 of its customers' virtual dough.
But the risky nature of paying their players in bitcoins doesn't scare the Islanders one bit...coin.
"The New York Islanders are known for giving unwanted NHL players a chance at redemption," said the source. "Players given up by other clubs have found a home on Long Island before moving on to new teams that will spend actual money on them.
"It will be the same for Bitcoin. Fake money just needs a place to show it belongs before hitting the jackpot."
It is unknown if the Islanders would pay their coaching staff in bitcoins as well. According to a recent report on Hockey Night in Canada, head coach Jack Capuano receives only free room and board and occasional gift cards to Bass Pro Shops for his work.