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Hockey Economics
by Alanah McGinley on 08/19/08 at 12:53 PM ET
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Tom Benjamin at Canucks Corner responds to a reader question on the impact of the latest exchange rates on league revenue, the salary cap and revenue sharing.
First, I don’t think the Canadian dollar will necessarily stay where it is. The value of the dollar is tied to oil prices and I expect energy prices to rise, not fall. Second, even if the Canadian dollar continues to fall, the impact next year will not be enough to actually drop NHL revenues. If all other things remain more or less equal - the league “enjoys” a small increase in real revenues - the salary cap would still go up a little bit. Third, any adverse impact of the changing Canadian dollar will fall mostly on the Canadian teams. It will mostly help the revenue challenged teams in the United States if the salary cap level stabilizes.
Read on for more, including how the American economy may continue to negatively affect the NHL this coming season.
Filed in: NHL Talk, NHL Business of Hockey | KK Hockey | Permalink
Tags: salary+cap,
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The value of the dollar is much more tied to the staggering budget deficits and artificially low interest rates, than the price of oil. By and large, though, I agree with most of Tom’s points. Any retrenchment by the Canadian dollar won’t have anywhere near as big an impact as the overall American economy (which in reality isn’t in quite the tailspin that the general media portrays).
Besides, it’ll be interesting to see what the revival in Chicago will do…
Posted by The Forechecker from Tennessee on 08/19/08 at 02:02 PM ET