Falling loonie has Canadian NHL teams worried
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10-24-2008, 02:18 PM
Join Date: Oct 2007
Originally Posted by
1) i think you mean revenues... not expenses....
2) its not as simple as saying revenues are at around 105 million... thats an average per team... but we know that last year 6/30 teams or 20% of the league is in canada... but those 6 teams generated 38% of league revenues.
3) a drop of 20% in the canadian dollar... means that that 38% will drop by .20 x .38... so a drop of approximately 7.6% of total league revenues... (yes i know this number is wrong and the math is a lot more complicated than that... but this 7.6 number is a good ROUGH estimate that you can do very quickly, without getting into all the other algebra)...
4) Now factor in that we are into new tv contracts with CBC and TSN that pay the league more money than the old tv deals.... factor in that inflation has seen ticket prices rise in montreal and throughout the league... factor in the increased revenues from third jerseys being introduced for many teams around the league.
When we put all this together we should realize that next years cap will not drop much, if at all due to the fall in the canadian dollar. The fall of the dollar will have to get much worse... or league wide attendance will also need to fall before we see significant cuts to the salary cap.
actually no, I meant expenses. Revenues are the same since tickets/merchandise are roughly the same price. Expenses, however, are in US$ (player salaries, offshore factories where merchandise is being manufactured, airplane tickets, hotels, etc). So if your Revenues drop 20% (because of exchange rates), your expenses rise 20%.
I think we both are right and it depends on where you stand (I mean as of which currency varies, i.e. is it the CD$ dropping, or is it the US$ rising)
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