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NHL Teams Spend Heavily On First Day Of Free Agency Despite Lower Salary Cap
Published July 8, 2013
FIRST TIME FOR EVERYTHING: USA TODAY's Kevin Allen noted this is the "first time the salary cap has gone down since it was introduced in 2005, and no one is positive what will happen with so many players available and less money to spend." Agent Steve Bartlett said, "There will be some casualties." Octagon agent Allan Walsh said, "There will certainly be some big-market teams squeezed up against the cap and unable to meaningfully bid on unrestricted free agents." Allen noted the "big question for the teams is what's going to happen next season and beyond in the new CBA." Walsh predicts that the salary cap will be $80M "within three years." Daly has "a different take." He said, "There is no expectation that the cap will grow dramatically next year. We expect growth, but relatively modest growth" (USATODAY.com, 7/5).
DOLLARS & SENSE: The NATIONAL POST's Sean Fitz-Gerald noted the Canadian dollar last week "probed depths it had not seen for almost two years, and if analysts predicting a further descent are correct ... the impact will be felt across the country's sporting landscape." A lower Canadian dollar has the "potential to slow revenue growth" in the NHL, which would "impact the salary cap." Small market teams in Canada would "face a host of familiar economic problems, with revenue earned in Canadian funds, and players being paid in U.S. currency." The salary cap is "tied to revenue." If the Canadian dollar "loses value for an extended time, it has the potential to affect the size of the pie available for NHL players." Former MLSE President & CEO Richard Peddie said that the Maple Leafs and Raptors would "have U.S. revenues of around" $50M from merchandising and U.S. broadcast deals, but would "be on the hook for roughly" $130M in player salaries. That "left a gulf" of $80M. Peddie said that when the Canadian dollar was "well below par ... MLSE hedged their currency bets, locking into a contract to buy U.S. funds at a certain rate, to guard against a further decline." Daly in an e-mail wrote, "I wouldn't call it a concern. We proposed creating a mechanism to stabilize for effects of currency fluctuations, but the (NHL Players Association) was satisfied with the current system" (NATIONAL POST, 7/5).