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Bill Daly doesn’t believe that sliding Loonie will yield a declining salary cap

The New York Times' Jeff Z. Klein wrote an exhaustively comprehensive article regarding the decline of the Canadian dollar as it applies to the NHL's salary cap, the health of Canadian and small-market American franchises, the Forbes valuations of NHL teams, possible expansion and/or relocation and the long-term health of the league in wide historical context, factoring in the NHL's TV deal with Rogers, the percentage of revenues coming in from Canada and the league's growth in American revenues by staging Winter Classics and Stadium Series games. It's a helluva article.

The most intriguing part comes from NHL deputy commissioner Bill Daly, who suggests that the 88-cent Loonie should not negatively impact the salary cap for the 2015-16 season:

“I expect there to be a healthy rise in the salary cap for next season,” Bill Daly, the deputy commissioner, said last week. “The Canadian dollar would have to continue to fall in a material way for that to change.”

For the N.H.L., a strong Canadian dollar means strong business growth. But with the Canadian dollar skidding, speculation is rife that the league’s bottom line may suffer, triggering a cascade of side effects, including a stagnant salary cap for the 2015-16 season.

Next season’s salary cap is certain to be a main topic of discussion when the N.H.L.’s Board of Governors meets Dec. 8 and 9 in Boca Raton, Fla.

The salary cap is tied to league revenue. When the Canadian dollar falls, the portion of league revenue generated by the N.H.L.’s seven Canadian teams diminishes as well. That affects the salary cap.

“It’s like throwing a dart at a dartboard — you make your best guess,” said Cyril Leeder, president of the Ottawa Senators. “We’ll be making contingency plans for if the cap goes up, cap stays the same, cap comes down. The league will advise us throughout the year.”

Daly still believes that the league will be OK as long as Canadian currency doesn't keep sliding downhill:

“The league is obviously healthier when the dollars are closer to par,” he said. “But I think the business success of the league and the clubs over the last several years stands on its own.”

[Conference Board of Canada economist Glen] Hodgson and other Canadian economists say the loonie would have to drop well below 85 cents to have a significant impact on the N.H.L.’s nearly $4 billion-a-year business. But, as Bettman has noted, the league watches the exchange rates every day. Its financial health depends on it.

Filed in: | KK Hockey | Permalink
  Tags: bill+daly, gary+bettman, ottawa+senators, salary+cap

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Paul Kukla founded Kukla’s Korner in 2005 and the site has since become the must-read site on the ‘net for all the latest happenings around the NHL.

From breaking news to in-depth stories around the league, KK Hockey is updated with fresh stories all day long and will bring you the latest news as quickly as possible.

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