The powers that be in the NHL’s head office may be downplaying the effects of the plummeting Canadian dollar, but with Goldman Sachs recently predicting the loonie could fall to as low as $0.71 USD from its current value of $0.80, it’s absolutely a story to watch for hockey fans, whether they live north or south of the border.
For a Canadian team like, say, the Ottawa Senators, already with an internal budget and one of the lowest payrolls in the league, the falling loonie (largely a consequence of crashing oil prices) won’t make things any easier financially. While it’s true there’s the ability to hedge against currency fluctuations, to what degree each of the seven Canadian franchises actually do, well, they’re not telling us.
What about NHL hopeful Quebec City, with its shiny new arena set to open shortly? Is the dream dead? The return of the Nordiques made a lot of sense when the loonie was on par with the greenback. It makes far less sense now, with the loonie potentially falling to levels that drove the Nordiques to Colorado in 1995.
American hockey fans should be watching, too. More and more there’s talk the players, frustrated by rising escrow payments, could choose to vote against the 5-percent salary-cap escalator, forcing big-spending teams like the Chicago Blackhawks into some tough decisions.
“Given that the value of player contracts is and has remained less than the full face-value of their contracts over the last few seasons, players will certainly discuss over the next few months whether to continue to maintain the 5-percent growth factor every year,” NHLPA spokesman Jonathan Weatherdon said.
A budget-conscious team like the Arizona Coyotes, meanwhile, could be helped by all this.
“Ideally for us, the Canadian dollar tanks and the cap goes down, not up,” joked GM Don Maloney.
And according to the Globe and Mail, “some teams around the league are considering a ‘vulture’ strategy, where they’ll purposely head into the summer with a lot of cap room in order to take advantage of distressed teams.”
The fact is, none of this was widely predicted. The few that did bet big on an oil crash are a lot richer today for a reason.
How it all plays out? Nobody knows for certain.
(But if you do, let us know.)