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Falling loonie has Canadian NHL teams worried

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Old
10-23-2008, 10:22 PM
  #26
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Originally Posted by RushDP View Post
The Loonie has little to do with next years cap limit. This is a temporary situation and the Cdn.$ will go back up. The US$ is being propped up by T-bill and US$ investment for those that don't want to touch the stock market right now. That'll change...it's inevitable.

The cap will go down because the recession in the US will mean less revenues for the NHL in the markets that are already weak and those that include palm trees. The #4 sport in the US (hockey) will not generate enough revenues to sustain the cap as is and it will fall with lower revenues the same way it went up with higher revenues.

This is not a knock on the NHL but affects all sports in general during a recession. NASCAR just announced it was having trouble getting sponsorship for big name teams and it is all the rage right now. All sports will take a hit but it will be seen very plainly in the NHL.

The only good news is that maybe we can stop talking about Gaborik and start seeing what a value Higgins really is. What a relief that will be!
I agree with pretty much everything here....

though one more point to bring up... perhaps... big perhaps... this will lead to better TV contracts in the US. During a recession TV Ratings usually go up, because more people stay home instead of going out.

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10-23-2008, 11:45 PM
  #27
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Goes both ways.....nobody was complaining when the dollar was 1.11

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10-23-2008, 11:52 PM
  #28
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This really shouldn't affect the Habs or any Canadian team this season. Any reasonable businessman would have hedged against a possible fall in the dollar with the appropriate futures.
If the dollar is still this low when the time comes to hedge next year, then that's when Canadian teams might be in peril.

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10-23-2008, 11:58 PM
  #29
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What? What happened to the dollar? Last time I checked it was at 95c.

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10-24-2008, 12:09 AM
  #30
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Totally random, but for me it's really really great since I'm paid in US$. I'm making money, and I'm not even working.

Yay for me.

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10-24-2008, 06:19 AM
  #31
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Most big teams like this are usually smart and probably have a reserve of US cash that was bought when the dollars were at par or better. Not saying that will last forever but they won't feel the lower dollar for salaries right away.

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10-24-2008, 07:06 AM
  #32
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CBC Radio had a story yesterday about this, and they quoted one of the Oilers' managers, saying the team had a stockpile of US dollars, but only enough to last a couple of months. They're worried about what will happen after that.

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10-24-2008, 10:50 AM
  #33
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I don't think there are two ways about it, as much as the NHL felt the boom of a cdn dollar at parity (it has all expenses in USD and 1/3 of revenues in CND$) coupled with soaring consumer spending and corporate profits......it will feel the pain of a CND$ losing 20% of its value overnight (and it's not temporary...parity was temporary) and a severe recession.

These will be hard economic times for the NHL. Personally, I don't think the weaker franchises will survive the next few years and league parity will take a big hit (many but not all teams will have to cut spending).

It's the end of the NHL's post lock-out, economic boom Golden age

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10-24-2008, 10:51 AM
  #34
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Quote:
Originally Posted by crystal ball View Post
CBC Radio had a story yesterday about this, and they quoted one of the Oilers' managers, saying the team had a stockpile of US dollars, but only enough to last a couple of months. They're worried about what will happen after that.
The good old Oilers, never stop complaining. Now they have one of the richest men in Canada owning them and they are still acting like they are one shift away from closing the doors.

It gets so old.

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10-24-2008, 11:28 AM
  #35
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Originally Posted by Habs View Post
The good old Oilers, never stop complaining. Now they have one of the richest men in Canada owning them and they are still acting like they are one shift away from closing the doors.

It gets so old.
True, but that doesn't mean he likes losing money any less. Owning a team is the same as owning a business. If it's not making money, eventually it's going to fold.

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10-24-2008, 11:47 AM
  #36
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Originally Posted by Habs10Habs View Post
True, but that doesn't mean he likes losing money any less. Owning a team is the same as owning a business. If it's not making money, eventually it's going to fold.
Except Russian Stores.


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10-24-2008, 11:48 AM
  #37
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Except Russian Stores.

lol..there are always exceptions.

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10-24-2008, 12:14 PM
  #38
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The Canadian dollar will stabilize at around 86-92 cents on the dollar. Nothing drastic.

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10-24-2008, 12:21 PM
  #39
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Originally Posted by Fido22 View Post
I don't think there are two ways about it, as much as the NHL felt the boom of a cdn dollar at parity (it has all expenses in USD and 1/3 of revenues in CND$) coupled with soaring consumer spending and corporate profits......it will feel the pain of a CND$ losing 20% of its value overnight (and it's not temporary...parity was temporary) and a severe recession.

These will be hard economic times for the NHL. Personally, I don't think the weaker franchises will survive the next few years and league parity will take a big hit (many but not all teams will have to cut spending).

It's the end of the NHL's post lock-out, economic boom Golden age
dog logic...

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10-24-2008, 12:34 PM
  #40
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Canadien teams bought lots of USD$ when they were on par, if anything, they wont see the effect immediately.

Also, a drop of 20% of CD$ value means a rise of 20% of expenses. If the salary cap is around 57 millions, then expenses are at around 105 millions, so 20% is around 20 millions.

If we win the cup, the 20 millions will be profit from the first 2 rounds

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10-24-2008, 01:18 PM
  #41
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Originally Posted by gee View Post
more at the link

http://www.cbc.ca/sports/hockey/stor...hl-loonie.html

yikes! an 80 cent dollar makes for a difference of $11.11 million...
the canadian teams have been through alot worse than this. 10 years ago, Canadian teams would have killed to have an 80 cent dollar.

I'm keeping my eye on this, but we're not anywhere near the crisis level here.

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10-24-2008, 02:06 PM
  #42
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Originally Posted by CastroLeRobot View Post
Canadien teams bought lots of USD$ when they were on par, if anything, they wont see the effect immediately.

Also, a drop of 20% of CD$ value means a rise of 20% of expenses. If the salary cap is around 57 millions, then expenses are at around 105 millions, so 20% is around 20 millions.

If we win the cup, the 20 millions will be profit from the first 2 rounds

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.

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10-24-2008, 03:18 PM
  #43
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Originally Posted by Beakermania View Post
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.
It's the double whammy combo hit of a significantly lower dollar (decreased USD revenues for strongly supported cdn teams) and decreased corporate and consumer spending (decreased ticket/box sales and merchandise sales, especially for weaker market US teams) that makes this an economic Monster!

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10-24-2008, 03:18 PM
  #44
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Quote:
Originally Posted by Beakermania View Post
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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Old
10-24-2008, 03:38 PM
  #45
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Originally Posted by CastroLeRobot View Post
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)
Since everything in the CBA is worded with respect to US $ and we are talking about things like the salary cap and revenue sharing with regards to American teams I prefer to look at it as Revenues dropping. Lets also not forget where our ownership is from; the US.

Also the CBA is all based on Revenues... not on expenses.

Also it is not true that Expenses rise 20%.... sure salary expense for players (and some executives; scouts etc) is in US$. But the habs have a number of other expenses that are in Canadian Dollars (taxes, arena workers, utilities, etc)...

Quote:
Originally Posted by Fido22 View Post
It's the double whammy combo hit of a significantly lower dollar (decreased USD revenues for strongly supported cdn teams) and decreased corporate and consumer spending (decreased ticket/box sales and merchandise sales, especially for weaker market US teams) that makes this an economic Monster!
Most corporate tickets are already sold.... Most sponsorships and ad revenues are already done. This becomes a problem next year... and thus affects the 2009-10 revenues far more than this years revenues.... this in turn cascades to affect the 2010-11 salary cap.

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10-24-2008, 03:49 PM
  #46
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Originally Posted by Beakermania View Post
Most corporate tickets are already sold.... Most sponsorships and ad revenues are already done. This becomes a problem next year... and thus affects the 2009-10 revenues far more than this years revenues.... this in turn cascades to affect the 2010-11 salary cap.
I agree it won't be fully reflected as early as next year, I just think that hockey's post-lockout very favourable economic conditions were based on idilic conditions (resources boom propelling CDN$ and US spending) which have come crashing down and we will in the future return to more historic norms of a league with many franchises in financial precarious situations (particularly in the next few years of US economic contraction).

I think the league has just had some very nice few years and those years are gone. It's the harsh reality of a sport with such high support coming from Canada.

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10-24-2008, 04:50 PM
  #47
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All professional sports franchises in general are going to be in a for a world of "SDF@#" in a couple years.

Here is the economic reality.

Once the credit markets completely crunch up, daddy can't spend $500.00 to take the family to a ball game because he just got layed off, cause his company couldn't secure a loan for day to day expenses (salaries). Mommy can't buy Bobby Jr those new $200.00 air jordans because AMEX just closed her account, and for the last 10-15 years too many people have been racking up debt and loans they can't pay back pay back.

Salaries are to much. In every sport.
No more 25 million/year for hitting a ball with a wooden bat. I mean, that's just stupid.

Greed caused this. We helped support it by paying rediculous amounts of money to watch people compete. If as consumers we were smarter as a group, then prices would not be as high as they are, and players would not be paid as much. The players would eventually accept it, cause really, if they didn't, then they can pump gas for a living instead of making a generous salary (not gigantic) playing hockey or basketball. If I were a professional athlete, I'd rather make 1 million a year playing basketball,then $15/hour pumping gas. There really is no need for athletes to make so much.

Only a deep recession will solve the problem. Unfortunately, right now no one will ever want to take a huge paycut. In 5-10 years, I think there won't be much choice. Cut down leagues to operate under current financial realities or fold.

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Old
10-24-2008, 05:11 PM
  #48
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Originally Posted by Habs10Habs View Post
True, but that doesn't mean he likes losing money any less. Owning a team is the same as owning a business. If it's not making money, eventually it's going to fold.
Why would you even feel the need to explain the above common sense?

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10-24-2008, 05:22 PM
  #49
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Why would you even feel the need to explain the above common sense?
My point was that no matter who owns the Oiler's. If they are losing money, they are going to ***** about it. The owner's wealth doesn't make a difference.

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10-24-2008, 06:18 PM
  #50
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Originally Posted by Kovalev the Great View Post
kickapoo ? http://www.youtube.com/watch?v=pwQNEXJI3io


stop crying now, as long as the bell center is filled with loving and screaming habs fans ... there won't be any problem ...
We can make up half of that 11 mm if every fan promises to drink one extra beer at the game

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