On the Forecheck
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Loonie business
by Forechecker on 11/20/08 at 08:01 AM ET
Comments (4)
David Shoalts of the Globe and Mail looks at the plummeting Canadian dollar and its impact on NHL franchises north of the border. I think the Montreal Canadiens president, Pierre Boivin, however, goes a bit too far with the Chicken Little act with this line:
“We’ll have to see what kind of growth the U.S. teams have, but it’s not impossible that NHL revenue will be flat this year,” Boivin said. “Of course we’re concerned by the dollar’s drop. To be competitive, we need a dollar at par.”
The term “at par”, means of course an exchange rate of 1 to 1, a situation which has existed for only a few months in the last several decades. While currency risk is an issue that the NHL could certainly handle better as a league, methinks Mr. Boivin is waxing melodramatic here.
5 year exchange rate, Canadian $/US $
Filed in: NHL Commentary | On the Forecheck | Permalink
Comments
And I think this chart puts things into better perspective:
Posted by bcrt on 11/20/08 at 08:35 AM ET
Yes, I remember the days when the smaller Canadian clubs were on the rocks; and I think there’s opportunity for a Grand Bargain to be made between the small-market US teams and the currency risk-exposed Canadian ones in terms of sharing each other’s burdens, specifically through the mechanism of partial gate-revenue sharing.
To whatever extent gate revenue would be shared, it would carve up that currency risk and spread it around the league, relieving some of that burden on Edmonton and Calgary, for example. It could also serve as the working model for small market support as well, rather than the current one.
The point I was trying to make is that relying on parity is absurd; that was a short-term windfall for the Canadian clubs, and while it might return in the next few years, it would be foolish to plan based on that assumption.
Posted by Forechecker from Nolensville, TN on 11/20/08 at 09:24 AM ET
During the NHL Hour with Bettman, he mentioned the article and said he doesn’t see the cap going down next season. Maybe a slight increase….
Posted by Paul from Motown Area on 11/20/08 at 04:38 PM ET
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Forechecker, it less than a decade ago when the Canucks, Oilers, Flames, Senators and Canadiens were all bleeding money. A lower than par dollar + a recession could spell disaster for those teams which do not have solid ownership. The Oilers and Senators have shored up their ownership situation, but the I’m not so sure about the Canadiens with George Gillette rumoured to be selling them after next season.
Posted by bcrt on 11/20/08 at 08:33 AM ET