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The Falling Loonie, Danger Ahead?

from Michael Grange of Sportsnet,

The impact may be felt differently by small and big markets. How will a team like the Jets, in the league’s smallest city and playing in its smallest arena fare if the dollar slides? Will Quebec City remain a viable landing spot for an NHL team if the dollar remains well below 90 cents?

For a team like the Leafs a falling dollar would mean a lower salary cap and therefore less leeway to flex their financial muscle.

The reality is there are too many variables to predict. A strengthening US dollar suggests a stronger overall economy south of the border, which the NHL could translate into new business to the benefit of Canadian clubs. Similarly a dollar trading at 90 cents would have benefits for Canadian exports which could help the economies around Canadian clubs.

But after a decade where Canadian teams were benefitted from the currency divide, the balance may be shifting.

much more

Filed in: NHL Teams, | KK Hockey | Permalink
 

Comments

Primis's avatar

It’s not rocket science.

Back before, when times and the economy were pretty good and the Loonie wasn’t as strong, some Canadian teams didn’t make it.

That’s why I though tit was so UNBELIEVABLY STUPID that the league chose to go back into Winnipeg at a time when the economy all around was in the dumpster and on fire and the climate was at best a long-term temporary sort of status.  Economic recovery of some sort was inevitable, and the odds of the Loonie retaining its status when the recovery happened were slim to none.

Winnipeg will tank again, and move again.  Ottawa may move as well given all their struggles all along.  Edmonton and Calgary (who somehow have managed ot only continue to suck and struggle through all this still while the Canadian dollar was STRONG) will go back to crying “POOR!” 24/7.

Posted by Primis on 02/05/14 at 04:21 PM ET

awould's avatar

That’s why I though tit was so UNBELIEVABLY STUPID that the league chose to go back into Winnipeg

yep

Posted by awould on 02/05/14 at 07:02 PM ET

Alan's avatar

Given the ownership situation in Winnipeg at present, who knows whether they’d be able to stay afloat if the Loonie dropped to the lows that was experienced in the mid-90s? I’d say they’re in a better position now than they were back then.

Ottawa, in my mind, is the real question mark. They’re already in dire straits as far as money is concerned. Winnipeg’s stock is on the rise, but for how long is anyone’s guess.

Posted by Alan from Atlanta on 02/05/14 at 07:07 PM ET

Savage Henry's avatar

Winnipeg has the kind of owner Atlanta needed (and had, before Ted Turner lost control): a filthy rich guy who can afford to lose a ton of money as a hobby. 

Apart from that situation, entering into a business arrangement where a favorable currency exchange rate is a prerequisite for success (or even breaking even) is a horrible idea and asking for trouble.

Posted by Savage Henry on 02/05/14 at 10:10 PM ET

Nathan's avatar

The answer is Bitcoin.

Posted by Nathan from the scoresheet! on 02/06/14 at 10:40 AM ET

redxblack's avatar

The NHL has no problem assessing players an escrow account to keep salaries within a margin for overall hockey revenue. They should do the same thing over a longer term to have financial parity around the exchange rate. Otherwise, teams north of the border must expect that their currency will likely be weaker over time (historically anyway) and save for a rainy day.

Posted by redxblack from Akron Ohio on 02/06/14 at 12:16 PM ET

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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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