Currency is not a friend of Canadian NHL teams. All teams in Canada have to pay all of their expenses (particularly) player salaries in American funds, however they only generate revenues in Canadian currency. This puts all Canadian teams at a disadvantage, as really, they’re paying more than what one may expect. However, as we approach the end of the calendar year known as 2003, the Canadian dollar is increasing in value. Does this mean they’re making more revenues and paying less overall? The charts below should tell the tale:
2002-03 season
| Team | Payroll (American $) | Payroll (Canadian $) |
| Toronto | $54.3 million | $77.6 million |
| Montreal | $48.6 million | $69.4 million |
| Ottawa | $30.3 million | $43.3 million |
| Vancouver | $31.8 million | $45.4 million |
| Calgary | $33.3 million | $47.6 million |
| Edmonton | $30.9 million | $44.1 million |
The approximated value of the Canadian dollar in the 2002-03 season was 70 cents U.S.
2003-04 season
| Team | Payroll (American $) | Payroll (Canadian $) |
| Toronto | $61.8 million | $81.3 million |
| Montreal | $42.7 million | $56.2 million |
| Ottawa | $39.6 million | $52.1 million |
| Vancouver | $38.7 million | $50.9 million |
| Calgary | $35.2 million | $46.3 million |
| Edmonton | $30.8 million | $40.5 million |
The approximated value of the Canadian dollar at this point in the 2003-04 season is 76 cents U.S.
According to the charts above, only 3 teams had a payroll raise in Canadian currency, while 4 teams had an increase in payroll in American currency. Calgary’s case is the most intriguing, as their payroll rose by $1.9 million dollars American, but dropped $1.3 million dollars Canadian. What does this mean, you ask? Well, one can look at it a couple of ways. First of all, a lower payroll simply is a lower payroll, which means less expenses and more revenues. Then, there’s the “player” perspective, as shown below:
| Team | Payroll difference (U.S.$) | Payroll difference (Cdn. $) |
| Toronto | +$7.5 million | +$3.7 million |
| Montreal | -$5.9 million | -$13.2 million |
| Ottawa | +$9.3 million | +$8.8 million |
| Vancouver | +$6.9 million | +$5.5 million |
| Calgary | +$1.9 million | -$1.3 million |
| Edmonton | -$0.1 million | -$3.6 million |
The player perspective shows that those teams who have saved money this season (Montreal, Calgary, Edmonton) may have enough financial resources to acquire a player or two to help push them into the playoffs. This is very important in both the Flames’ and Habs’ cases, as currently, they are exceeding expectations and could use that player to push them into a “comfortable” playoff spot.
There is one simple thing that can be concluded here, the higher in value the Canadian dollar grows, the lower the Canadian teams have to pay salaries. Sounds strange, but when you evaluate it from a Canadian dollar perspective, it all makes sense. That difference in the value of the dollar may just be the key thing that pushes a team into the playoffs, or keeps them out of it. However, things can change in a hurry, especially on the stock market, so the Canadian dollar could just as easily drop to its old value from last season, or it could jump to 80 cents U.S., only time will tell one way or the other.
Questions/comments? E-mail me at b.larose@habsworld.net.
Team payrolls courtesy of the NHLPA, currency values courtesy of the Toronto Stock Exchange.