http://www.zerohedge.com/news/2016-01-22/why-oil-price-crash-killing-nhl
With oil prices dipping below $30 and dire forecasts for the already-low Canadian dollar, the National Hockey League (NHL) is taking a hit that would normally lead to a mass exodus of players to Russia - if the ruble wasn’t tanking as well.
The NHL’s revenue depends on the Canadian dollar, which in turn is on the downward slide thanks to the plummeting oil prices. As NHL revenues decline, player salaries go down, and roster cuts go up.
From a profit standpoint, Canadian teams will be hardest hit, and the worst is yet to come if predictions are anything to go by.
...
What does it have to do with hockey? Well, everything.
The NHL is comprised of 30 teams, with players from 20 different countries. Some 50 percent of these players are Canadian. Seven of the 30 NHL teams are in Canada, while 23 are in the U.S.
Canadian teams take in Canadian dollars through ticket sales, but they pay out the bulk of their expenses—salaries and tons of travel—in U.S. dollars.
...
Since 2005, the NHL has capped player salaries based on the league’s revenue. If league revenue takes a hit—and if Macquarie’s predictions come true for this year—the NHL could be looking at a significant salary cut.
Interesting, but just like all investment analysis, nobody has a crystal ball. If I was betting, I would be the NHL survives.
With oil prices dipping below $30 and dire forecasts for the already-low Canadian dollar, the National Hockey League (NHL) is taking a hit that would normally lead to a mass exodus of players to Russia - if the ruble wasn’t tanking as well.
The NHL’s revenue depends on the Canadian dollar, which in turn is on the downward slide thanks to the plummeting oil prices. As NHL revenues decline, player salaries go down, and roster cuts go up.
From a profit standpoint, Canadian teams will be hardest hit, and the worst is yet to come if predictions are anything to go by.
...
What does it have to do with hockey? Well, everything.
The NHL is comprised of 30 teams, with players from 20 different countries. Some 50 percent of these players are Canadian. Seven of the 30 NHL teams are in Canada, while 23 are in the U.S.
Canadian teams take in Canadian dollars through ticket sales, but they pay out the bulk of their expenses—salaries and tons of travel—in U.S. dollars.
...
Since 2005, the NHL has capped player salaries based on the league’s revenue. If league revenue takes a hit—and if Macquarie’s predictions come true for this year—the NHL could be looking at a significant salary cut.
Interesting, but just like all investment analysis, nobody has a crystal ball. If I was betting, I would be the NHL survives.
