Wednesday, January 15, 2014

The NHL and the Falling Canadian Dollar

Tigercatatonia isn't always just Ticats posts.

With that said, watching the Canadian dollar fall over the last few months to below 92 cents US from a long period slightly above and below parity makes one think about the effects on NHL revenues. Those revenues determine the salary caps and floors that accompany them and are priced in US dollars.

I'm willing to bet the Canadian dollar falls below 90 cents US in the next six months, especially with the bad Ontario jobs numbers released in December. So that could be a year on year decrease in Canadian team revenue of over 10%. With seven Canadian teams out of 30, that wouldn't seem to be so problematic if every team in the NHL had the same revenues, but the Canadian teams make significantly more than the average Canadian team.

The NHL is having a good year attendance wise (see this CBS Sports article comparing NHL sellouts versus NBA sellouts; five Canadian teams have sold out all their games) so decreasing Canadian revenue probably will just counteract rising revenues. Still the salary caps and floors won't rise as much as if the Canadian dollar stayed around parity.

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