Is the NHL in for a contraction of revenues?

Posted by Richard Pollock in General NHL on August 13, 2008 — No Comments

From Tom Luongo of NHL Fanhouse:

With the Loonie averaging near parity with the $USD over the past year and having broken down out of the box formation that held it in check between $1.02 and $0.97US for the past 9 months to its closing price as of this writing to $0.938, there is a real possibility of a contraction in league revenues due to this breakdown of the exchange rate.

I’m not sure an actual contraction in revenues is in the cards, but with the near collapse of the construction economy in the States of Arizona and Florida I would not put any of my money down on that bet either. Considering the spending spree that the teams have engaged in during this off-season and that the mid-point of the salary range is the targeted percentage of revenues due the players as total salary compensation, I can almost assure you that in this last year of this CBA the players should be absolutely prepared to kiss a significant portion of their 15% escrow payments goodbye.

Read the entire entry here.

Interesting points brought up by Luongo.  The fact is, the NHL is very much tied to the US dollar’s strength versus the Canadian dollar’s strength and if the Canadian dollar remains around 93 cents per 1 dollar US, then the league may very well see the salary cap decrease next off-season.