All eyes on the dollar
The Canadian dollar has been going cuckoo lately, along with a lot of other things, and at one point on Friday afternoon was below 83 cents — its lowest point since the spring of 2005 when the NHL was still locked out.
In the past two weeks, the dollar has dropped more than 10 cents. Heck, on Friday, it fell by 4.5 cents at one point, the first time in 47 years that it had decreased by more than three cents in one day.
Yesterday, it was back up to about 88 cents again.
Commissioner Gary Bettman on the issue:
"This has been a fascinating journey. When the Canadian dollars was in the 60s, it was a disaster. When the Canadian dollar was at $1.09 (US) it was a disaster because it meant everything else was out of sync. Our system is designed to account for the fluctuations of the Canadian dollar. It would make everybody's life easier if it would stabilize, but it's not a concern."Even if the loonie sits where it is currently, it should be a concern. A report in The Globe and Mail on Saturday highlighted just how much of the league's revenue-sharing plan hinged on Canadian teams' input last season, with $50-million of the handouts coming from the six franchises north of the border.
Toronto and Montreal forked out about $12-million apiece in regular-season funds, while Vancouver paid $10-million and Calgary paid $6-million. Ottawa and Edmonton lagged behind, but still chipped in about $1-million each.
All six were, again, among the NHL's 10 highest revenue generators.
The dollar teetered around par almost all of last season, and a 10- to 20-per-cent dip in the currency could represent some serious rejigging of the league's givers and receivers. The Leafs and Habs can easily withstand a 15-per-cent haircut, and would remain league leaders in revenue, but Vancouver would likely fall into the 10-15 range and Calgary, Edmonton and Ottawa would likely be 15-20.
Outside of the "givers" range, anyway.
It's going to be an incredibly interesting year from a revenue standpoint. Bettman is still smelling all roses, but the increasingly ugly situation in the U.S. combined with the dollar drop could seriously weaken what's become a huge part of the league's financial backbone.
If there's any good news for some of the franchises struggling on the low end, it's that the cap will finally slow its climb next year. Where it stops, however, is anyone's guess at this point.
Labels: business of hockey