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Hockey Canada paid $1.6 million to crisis communication firm amid sexual assault scandal, VP says

Hockey Canada paid $1.6 million to crisis communication firm amid sexual assault scandal, VP says #Hockey #Canada #paid #million #crisis #communication #firm #sexual #assault #scandal. Here is what we have for you today on TmZ Blog.

Hockey Canada paid a crisis communications firm $1.6 million to help steer the embattled organization through its public relations nightmare, the organization’s senior vice president Pat McLaughlin told a parliamentary hearing Tuesday. McLaughlin and Bob Nicholson, Hockey Canada’s former president and CEO, faced questions from federal MPs about a scandal that has led to the resignation of its CEO, entire board, and taken a significant financial toll.

Here’s what you need to know:

  • Hockey Canada is expected to lose as much as $24 million in sponsorship as major partners have ended or paused partnerships with the organization.
  • The organization hired Navigator, a crisis communications firm, in early July as it faced the departure of those sponsors, further parliamentary hearings, media scrutiny, and calls for change from its members. It has paid the firm $1.6 million to date.
  • Nicholson says that Hockey Canada did not go far enough to combat a culture of silence and make people feel safe. Nicholson, the former Hockey Canada CEO from 1998 to 2014 who is now chairman of the Edmonton Oilers, said he wished he’d implemented more transparency during his tenure, including the keeping of minutes during meetings regarding settlements.
  • Nicolson also admitted that Hockey Canada needed better guidelines for dealing with sexual harassment.

Backstory

The hearing on Tuesday, the fourth since the revelation of a financial settlement of a sexual assault claim against several unnamed members of the 2018 Canadian national junior team, took a much more conciliatory tone than previous sessions, in which Hockey Canada leadership was widely criticized for a lack of transparency and being dismissive of media reports and Federal MP questions critical of its governance.

Hockey Canada’s interim chair, Andrea Skinner, resigned her position following a combative hearing in October. After refusing repeated calls for his resignation, Hockey Canada’s CEO Scott Smith left the organization a few days later. The entire Hockey Canada board also resigned.

Tuesday’s hearing followed the completion of a governance report by former Superior Court Justice Thomas Cromwell, which was critical of the transparency with which Hockey Canada operated multimillion-dollar reserves that were used to settle uninsurable claims, including sexual assault allegations.

Hockey Canada has paid out 21 settlements from the National Equity Fund, a fund fueled by player registration fees, from 1989 to 2022. Ten of those claims were related to injuries where the claims exceeded available insurance coverage; the remaining 11 claims related to sexual misconduct. The most recent of those claims was related to the 2018 incident in London.

The Globe and Mail first reported the existence of the National Equity Fund and a second fund, the Participants Legacy Trust Fund, which could be used to settle sexual-assault cases but has not yet funded any settlements.

Cromwell’s report — which cost the organization $1.7 million to complete — revealed that Hockey Canada also kept a third fund of cash reserves for uninsured claims, which was largely shielded from public view and accounting. Cromwell concluded that Hockey Canada’s possession of the funds to pay out on uninsured claims was appropriate risk management, but it wasn’t sufficiently transparent in its communication to members and participants regarding the fund and its use.

A July statement from Hockey Canada to its members suggested that the Equity Fund was in part used to fund a range of safety, wellbeing and wellness initiatives for its players. But Cromwell’s report found no evidence that any such initiatives were paid for using the fund.

go-deeper

GO DEEPER

One night in London: Allegations of sexual assault and a reckoning for Hockey Canada

“It seems to me that there was a communication strategy to advise the public that the fund had various good in addition to the negative, and that’s what scares me,” said Liberal MP Anthony Housefather during Tuesday’s hearing.

Cromwell also found that organization was concerned that more financial transparency would reveal its large cash surplus, which could weaken its bargaining position in settlements, including those made in the past with sexual assault survivors. According to Hockey Canada’s audited financial statement for 2021, accessed via public records request, the organization had $143.5 million in cash and investments.

What they’re saying

“I find it outrageous that $1.6 million was spent for Navigator with such a disastrous public relations strategy.” — Peter Julian, NDP MP

“Our organization has made mistakes, and our failure to act sooner has had a significant toll on children, a significant toll on parents and volunteers and I can tell you that we’re deeply sorry for that. I want to be clear on this as well, and to make no mistake, without those folks there is no Hockey Canada.” — Pat McLaughlin, SVP of Hockey Canada

“I’m proud of the progress we made. It is clear that we didn’t go nearly far enough, particularly regarding off-ice conduct. It is perhaps a failure to see that then that brings us here today.” — Bob Nicholson, former president and CEO of Hockey Canada

The fallout for Hockey Canada

Hockey Canada has a long way to go to repair its relationships with stakeholders and corporate sponsors like Bauer, Canadian Tire, Telus, Nike, Tim’s Hortons, Scotiabank, Chevy Canada, and many more.

A financial blow of $26 million is unlikely to be recouped until sponsors feel confident in re-aligning their brands with the tarnished image of hockey’s national governing body in Canada.

“It comes at a significant cost, without question,” McLaughlin said.

Hockey Canada says changes are underway.

An interim management committee has been put in place until a new CEO is hired. Hockey Canada’s members will elect a new board in December. A search is underway for a new CEO to replace Smith. The organization has made changes to its process for hiring and appointing leaders, implemented measures to ensure more diversity in its leadership, and has limited terms for board members.

Hockey Canada still has a long way to go to repair its relationships with provincial and regional governing bodies, which oversee minor hockey across the country. Several federations threatened to withhold player participant fees that are paid to Hockey Canada and called for change in leadership. In response, Hockey Canada announced in late October that it would not collect any participant assessment fees for the upcoming season.

The organization has also faced public scrutiny from high-profile stakeholders, like the Canadian national women’s hockey team, which has requested to be better represented by the new board.

The London Police have reopened their investigation into the 2018 sexual allegations. Hockey Canada has also reopened its investigation into the incident. The National Hockey League is conducting an investigation as well, with the majority of the members of the 2018 Canadian national team currently under contract to NHL teams.

Halifax Police have opened an investigation into allegations of a group sexual assault involving the 2003 Canadian World Junior team, which emerged after the 2018 allegation and settlement were revealed.

Required Reading

(Top photo: Andy Devlin/ Getty Images)

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