Gary Bettman doesn’t like it when the media brings up the Canadian dollar. He thinks we make an unnecessarily big deal over it, and that we don’t really understand how it affects NHL revenues.
And hey, that may be true. We’re not privy to the league’s books, and I don’t think we’re going to get an invite to peruse them anytime soon.
But for the record, the Canadian dollar got smoked again today. It’s now fallen below 0.73 USD.
The culprit? Oil, of course.
The price of a barrel of crude oil dropped to yet another six-year low Friday, losing more than $1 to trade at $35.73 US, and taking the Canadian dollar down with it.
The loonie has repeatedly broken a series of 11-year lows this month on its downward slide. Friday’s low is the lowest point for Canada’s dollar since May 2004, when the currency went as low as 71 cents.
It could reach those 2004 lows soon. Most analysts expect the loonie to fall even lower before it stabilizes.
The commissioner was, of course, asked about the Canadian dollar this week in Pebble Beach, after next season’s salary cap was pegged at $74.5 million.
And, of course, he tried to downplay any concerns.
“It’s only December,” Bettman told Yahoo Sports. “We still have a lot more of the season to play and a lot more revenues to collect.”
But the consensus was that $74.5 million — it’s currently $71.4 million — was an optimistic projection, given the revenue uncertainty. It also included the CBA-mandated five percent inflator, which the NHLPA could always try to renegotiate downward if the players say enough’s enough with regards to escrow.
(The players considered doing that last year, but ultimately decided not to. An NHLPA spokesman told me Tuesday that it was “much too early” for “detailed discussions” about the inflator, but that it will “be addressed as it is every year.”)
Now, there’s no sense quibbling over exactly how much the Canadian dollar affects revenues. But it clearly does affect them. And if you’re the GM of a team that’s up against the cap — like, say, the Kings — and you’re trying to re-sign your key guys — like, say, Anze Kopitar and Milan Lucic — you’re definitely monitoring what’s going on in the currency market.
Because this is what’s happened the last two years:
Only time will tell if the media is going a bit too Chicken Little on this issue. We’ll admittedly do that on occasion.
“While there’s a lot of speculation as to what the declining Canadian dollar relative to the U.S. dollar means, most of that commentary and speculation is a little off of the mark,” Bettman said.
But look again at that chart.
The sky may not be falling, but the loonie sure has.