Does the appreciation of the CDN$ mean windfall profits for Canadian NHL teams?

Answer 1

Not really. It makes salaries lower in Canada, but that's about it.

More Official NHL items are sold in the US than in Canada and a lower US dollar REDUCES the revenue for Canadian based teams

eg. The Versus deal is roughly $2MM USD per team.

Last year, Canadian teams received $2.6MM Cdn, this year, they'll receive $2MM Cdn.

Revenue from the sales of jerseys and memorabilia is primarily in USD, again, Canadian teams are now losing 20-30% over last year.

The overall difference for Canadian teams as calculated by the leagues independant auaditor will be between 2-3%

Answer 2

First, the Canadian Dollar didn't so much appreciate as the American Dollar depreciated so as an American, for the sake of our economy, I have to hope this is a situation that does not last long. Second, while it will improve the profits of Canadian teams, or at least lessen the costs, I would not count on it lasting for a very long time. Finally, I would not call it a "windfall profit", but simply an increase in profit; windfall makes it sound like a much larger increase than I believe it will be.

Just my two cents, but of course I am not an economist so I could be completely wrong. :)

Answer 3

It absolutely means big profit. Salaries are one of the biggest expenses of any hockey team. The cap this year is right around $50 Million USD and all player contracts are paid in US dollars even by Canadian teams so it doesn't take too much to figure that there is a big savings when you are paying $50 million US and par as opposed to $50 million with a 70 cent dollar. Remeber that they make most of their money in Canada and spend around half of it in USD. Below is an article from msnbc reporting on this issue.

Answer 4

I'll go off topic with this one a little because the hockey aspect has been covered.
It is not good for everyone that the dollar is stronger than the U.S dollar. For one, tourism- how many Americans are going to venture up here now when it actually costs them more, it was great for them when they were getting like a buck and a half for every one of theirs.
Another thing is Canadian exports. Think of stuff like seafood, lumber etc that goes to the U.S.-those guys are disgusted because they are actually now getting paid alot less. With Christmas coming up, Canada exports piles of XMas trees to the U.S.- All those guys will lose a fortune this year, maybe last year if they were getting 20.00 per tree, they got paid American so it was more like 25$ per tree or whatever, now it will be 19$ and change, multiply that by hundreds of thousands and it adds up.
So, it is not all rosey. Fortunately for me, I am off to Vegas tommorow so it is great for me. When I gamble away a hundred bucks, it is a hundred bucks, not 130$ or whatever.
Off topic I know. Thanks for listening.

Answer 5

Accounting-wise, I'm pretty sure they don't actually recognize revenue on this unless it's deemed to be a permanent, long-term change.

Answer 6

Temporarily, but they wouldn't be wise to count on the money at par phenomenon continuing.

Answer 7

Yes, they all should make a little extra money.