Canadian Teams win big on dollar

Discussion in 'Fugu's Business of Hockey Forum' started by leeward, Jan 4, 2005.

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  1. leeward

    leeward Registered User

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    The advantage is shifting to the Canadian teams as the value of the USA dollar falls. As Canadian teams pay in US dollars and have Canadian dollar revenues they have suffered against the US teams. The currency trend has been moving very quickly in 2004 to the Canadian teasm favour and is expected to continue to move to the Canadian teams benefit in 2005. I actually feel the Canadian dollar will go to par versus the US dollar in the next 20 months. This changes the dynamics for the free agent mkt significantly. How it is treated under the new agreement is up in the air. However the days of the Canadian teams losing money may now be over.
     
  2. Hi-wayman

    Hi-wayman Registered User

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    Actually there will be far less advantage than what you are stating. The US had an advantage when bidding for F/A players when the Canadian dollar was substantially lower than the US dollar because gate equalization payments couldn't make up the differential. As the two currencies get closer together the gate equalization payments work much better and are now fairly close to optimum. Further equalization of the two currencies will now start resulting in a lowering of gate equalization payments paid to the Canadian teams so there will be very little advantage & maybe a new type of advantage to the US teams that will be allowed to keep most of their revenues rather than having to share that revenue with the Canadian teams.
     
  3. Jaded-Fan

    Jaded-Fan Registered User

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    Not to mention that this has to kill Canada in other areas. We are your number one trading partner by far, profit magins have to be very tough now on Canadian goods. I am guessing that most in Canada (and the rest of the world) must be hoping for a strengthening dollar, and soon.
     
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