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Falling loonie has Canadian NHL teams worried

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Old
10-23-2008, 03:31 PM
  #1
gee
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Falling loonie has Canadian NHL teams worried

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Falling loonie has Canadian NHL teams worried

Dollar's exchange rate means teams will pay out millions more in player salaries

It's the most important game in the NHL right now, and it's not taking place on the ice.

The unpredictable nature of the Canadian dollar means the NHL's six Canadian teams are involved in a high-stakes contest of financial chicken, trying to stay one step ahead of the loonie at all times.

It's a game they can ill afford to lose.
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...

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Old
10-23-2008, 03:31 PM
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ah crap..

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10-23-2008, 03:48 PM
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10-23-2008, 03:51 PM
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Well the Habs gave more than that in revenue sharing last year... i guess Nashville won't get their check this year

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10-23-2008, 03:55 PM
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Canadian teams where the biggest provider to the revenu sharing program, even EDM threw in $8M last season. That will shrink like a habs vintage wool shirt in a drying machine.

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10-23-2008, 03:56 PM
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Originally Posted by Rocket Jr. View Post
Canadian teams where the biggest provider to the revenu sharing program, even EDM threw in $8M last season. That will shrink like a habs vintage wool shirt in a drying machine.
so there will be nothing left?!

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10-23-2008, 04:00 PM
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Originally Posted by Team_Spirit View Post
Well the Habs gave more than that in revenue sharing last year... i guess Nashville won't get their check this year
The big problem with this is that the revenue sharing is based on total brute revenues, before expenses adnd player salaries are expenses that are probably paid in american currency.

So if the Habs make the same revenues and have to pay the same share, yet have over 10 million $ more in expenses because of the players' salaries, the Habs won't make much profit.

The Habs have been complaining about the revenue sharing system since the inception of the new CBA, as they are the most disadvantaged team who share revenues, because of the city taxes on the Bell Center. They are second only to the Leafs for the amount they have to give for revenue sharing, yet they aren't in the top 5 for profit, exactly because they base the sharing on total revenues rather than total profits.

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10-23-2008, 04:02 PM
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Gillett business is not as good as last year...

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Old
10-23-2008, 04:15 PM
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SO now the loonie is down so will the NHL revenues and that means maybe the cap does go down.
Which teams will be cought up in this?

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10-23-2008, 04:22 PM
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Quote:
Originally Posted by Ozymandias View Post
The big problem with this is that the revenue sharing is based on total brute revenues, before expenses adnd player salaries are expenses that are probably paid in american currency.

So if the Habs make the same revenues and have to pay the same share, yet have over 10 million $ more in expenses because of the players' salaries, the Habs won't make much profit.

The Habs have been complaining about the revenue sharing system since the inception of the new CBA, as they are the most disadvantaged team who share revenues, because of the city taxes on the Bell Center. They are second only to the Leafs for the amount they have to give for revenue sharing, yet they aren't in the top 5 for profit, exactly because they base the sharing on total revenues rather than total profits.
Habs revenues are in canadian dollars, I suspect they (revenues) are converted into US dollars to determine gross revenue for revenue sharing purposes. So their USD converted revenues will be lower, so lower revenue sharing payments.

I guess.

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10-23-2008, 04:52 PM
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Wouldn't it make sense to pay all players in the same currency, or have conversion rates or something?

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10-23-2008, 04:52 PM
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Well I do remember the Habs brass saying that they didn't really make that much more money when the loonie soared and the US dollar dropped, because they had bought futures that they were stuck with....

so hopefully the same applies now.

Everyone remember how NHL owners were drying poor before the lockout, and yet the salary cap has risen every year of the new CBA.


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Old
10-23-2008, 05:02 PM
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Quote:
Originally Posted by Ozymandias View Post
The big problem with this is that the revenue sharing is based on total brute revenues, before expenses adnd player salaries are expenses that are probably paid in american currency.

So if the Habs make the same revenues and have to pay the same share, yet have over 10 million $ more in expenses because of the players' salaries, the Habs won't make much profit.

The Habs have been complaining about the revenue sharing system since the inception of the new CBA, as they are the most disadvantaged team who share revenues, because of the city taxes on the Bell Center. They are second only to the Leafs for the amount they have to give for revenue sharing, yet they aren't in the top 5 for profit, exactly because they base the sharing on total revenues rather than total profits.
Ozy... I think you are wrong on this one....

Since everything under the CBA is figured out in American dollars; a falling Canadian dollar means the Habs revenue drops while their salary expenses remain the same.....

The ten million is lost revenues not added expenses.

Quote:
Originally Posted by CPrice View Post
Wouldn't it make sense to pay all players in the same currency, or have conversion rates or something?
All players are paid in the same currency... US dollars...
Ticket sales for canadian teams are in Canadian Dollars.

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Old
10-23-2008, 05:04 PM
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Originally Posted by Beakermania View Post
All players are paid in the same currency... US dollars...
Ticket sales for canadian teams are in Canadian Dollars.
Thought so. Thanks

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Old
10-23-2008, 05:13 PM
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They stayed afloat when the loonie was @ 53c

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Old
10-23-2008, 05:18 PM
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These is the times....

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Old
10-23-2008, 05:45 PM
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habfaninvictoria
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Teams who inked players to big money long term deals could find themselves unable to remain under the cap and still have a competitive team. The Cap will drop. Canadian teams were responsible for 30 % of the revenues. A weaker dollar at say .80 means that there will be an over 6% decrease in total revenue assuming teams draw similar amount of fans as last year. For most teams a 6% drop in Cap won't hurt them significantly because most teams don't spent to the cap. It's the teams like NYR that will have Cap issues, I think we'll be ok.

As for how this effects Canadian teams, obviously when you earn your revenue in a discounted currency and the majority of your expenses are in a higher currency then that will have an effect on their ability to sign big name players. Again it shouldn't hurt us, but Calgary and Edmonton will have difficulty going after a guy like Gaborik .

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10-23-2008, 06:00 PM
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It is what it is.
It isn't what it's not.

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Old
10-23-2008, 06:06 PM
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Quote:
Originally Posted by Fido22 View Post
Habs revenues are in canadian dollars, I suspect they (revenues) are converted into US dollars to determine gross revenue for revenue sharing purposes. So their USD converted revenues will be lower, so lower revenue sharing payments.

I guess.
That is a good observation. If the Loonie is loses value then so would revenues if converted to US$ so in the end the sharing would be less meaning everybody gets hit exactly the same. If the Loonie gains strength then the revenues go up in terms of the US$ and revenue sharing increases.

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Old
10-23-2008, 06:19 PM
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Originally Posted by habfaninvictoria View Post
Teams who inked players to big money long term deals could find themselves unable to remain under the cap and still have a competitive team. The Cap will drop. Canadian teams were responsible for 30 % of the revenues. A weaker dollar at say .80 means that there will be an over 6% decrease in total revenue assuming teams draw similar amount of fans as last year. For most teams a 6% drop in Cap won't hurt them significantly because most teams don't spent to the cap. It's the teams like NYR that will have Cap issues, I think we'll be ok.

As for how this effects Canadian teams, obviously when you earn your revenue in a discounted currency and the majority of your expenses are in a higher currency then that will have an effect on their ability to sign big name players. Again it shouldn't hurt us, but Calgary and Edmonton will have difficulty going after a guy like Gaborik .
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!

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Old
10-23-2008, 06:54 PM
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Oil prices will likely rebound next year though that should bring the loonie back up with it (in theory anyway).

The Canadian teams should've bought into US currency when there was parity though just to have been on the safe side.

I suspect the NHL CBA will be re-opened for negotiation this summer and both the players and owners will want some modifications.

And hockey being the #4 sport in the US probably is being quite generous. NASCAR and NCAA football/basketball are both bigger.

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Old
10-23-2008, 07:22 PM
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habfaninvictoria
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Quote:
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!
One could also argue that the CDN dollar has been artificially high for the past 2-3 years based on our natural resources, in particular, oil. This has changed, oil is tanking (pardon the pun).

To think that the CDN dollar will recover to be close to par with the US is naive. Our economy needs the loonie to be lower in order to be competitive and make our goods more attractive (ie cheaper) to our largest trading partner, most economists would agree with this. We have only been close to par or better for a short period of time over the past 30 years. 84-88 cents would probably be optimum for our economy.

George W. Bush has also been very good for our economy, that is about to change. Our dollar will not rebound to over 90 cents, sorry but it doesn't make sense.

While the recession may be responsible for declining revenue in the US and therefore a reduction in cap, do not underestimate the impact of a devalued dollar in the overall revenues of the league.

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Old
10-23-2008, 07:39 PM
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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...
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 ...

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Old
10-23-2008, 07:47 PM
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this is why the nhl should use the canadian dollar instead of the american dollar

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Old
10-23-2008, 07:55 PM
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They should make a different cap for Canadian teams. LAWLS

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