Habs hurt by lower loonie: Boivin
Montreal Canadiens president Pierre Boivin expressed concern Wednesday over the potential ramifications of the slumping loonie on the NHL's Canadian markets.
Boivin claimed the NHL's six Canadian franchises — the Canadiens, Calgary Flames, Edmonton Oilers, Ottawa Senators, Toronto Maple Leafs and Vancouver Canucks — account for more than a third of league revenue.
"We're concerned by the dollar's drop," he said.
The Canadian franchises have thrived at the gate, but the lower loonie is creating rising uncertainty because the NHL subscribes to a revenue-sharing plan in which the more prosperous teams prop up the weaker teams.
"Canadian teams account for a large part of revenue," Boivin said. "We will have to see what kind of growth the U.S. teams are going to have, but it is not impossible that NHL revenue will be flat this year."
Boivin revealed the Canadiens paid out $18 million US under the revenue-sharing plan last season, and expect to match that this season.
With the loonie having plunged approximately 21 per cent against the American greenback, it costs the Canadian franchises more when revenues are converted to U.S. dollars.
"A year ago, we had a dollar at par and now it is down around 80 cents," Boivin said. "To be competitive, we need a dollar at par."
Boivin is worried the Canadian franchises will slump back to pre-lockout levels of prosperity, when he alleges they lost tens of millions of dollars in a bid to remain competitive.
"We will have to come up with mechanisms to offset the foreign exchange swings," Boivin said. "Against an 80-cent dollar, we're not any further ahead than we were before the lockout."
'We have a system that is working'
The NHL locked out its players on Sept. 15, 2004, a strategic ploy that wiped out the entire 2004-05 campaign but resulted in the signing of a new collective bargaining agreement that included a salary cap.
Boivin said the salary cap, which rose to $56.7 million in June, is an improvement, even though aspects of it are "not working well."
"It was absolutely worth it," he said. "Today, we have a system that is working.
"We have the greatest amount of competitive balance that we have ever had as a sport. Most of the teams are competitive."
With files from the Canadian Press