So who is bummed about the lockout? II
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11-28-2012, 11:51 AM
Join Date: Jul 2007
Location: St Paul, MN
There's an interesting sidebar that Nanne mentioned that NOBODY else has:
Players are worried about the potential for a dropping Canadian exchange rate.
(warning: Devil's advocate)
During the last lockout, the exchange rate was about 1.2 CAD = 1 USD. Right now it's just about even. Meaning that the value of the CAD rose about 20%.
Because all these revenue and salary calculations are in USD, that means the exchange rate "artificially" rose revenues. The number I've heard is that the Canadian teams drive about 1/3 of revenue, which means that if the CAD drops back to 2005 levels, it's a loss of $250-300M of revenue, give or take, and half of that is player salary.
You could also argue that the $250-300M in revenue inflation from the exchange rate led to the inflation of the salary floor which hurt small market US teams (who receive no benefit from the exchange rate) which is part of what is driving the current lockout.
Now if the players accept a 50-50 deal without guarantees and the CAD drops, they could see $150M+ in salary losses, or about 9% at last year's revenues. That's substantial losses for all players yet only the seven Canadian teams are affected as well as a very minor amount of revenue sharing.
I'm kind of surprised this hasn't come up more often, because it's a legitimate concern for both sides IMO.
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