NHLers Could Lose Escrow Money If Current Economy Continues
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Boivin Expects Cap To Drop If
Revenue, Loonie Do Not Improve |
Barring an "unexpected turnaround in the North American economy," NHL players will "lose all of their escrow money next season -- millions of dollars in salary -- for the first time since the system was established after the 2004-05 lockout," according to an NHL exec cited by David Shoalts of the GLOBE & MAIL. The loss will "effectively cut the salary cap" by almost $9M from this season's $56.7M. The exec: "Next season, the cap won't go down much because the selling season (for NHL teams) is largely complete. But through escrow next season, the cap will go down to about $48[M]." The exec added that the salary cap will "officially make just a small drop next season to $55[M] at worst," and that the "real pain will come in the off-season when final revenue count is made and it is determined what will happen to the portion of the players' salaries placed in escrow." The exec predicted that the revenue "will drop substantially as next season goes on, which means the shortfall will be made up by taking the players' escrow money." Canadiens President Pierre Boivin yesterday said that the salary cap next season "will go down if revenue and the Canadian dollar remain low." However, the exec "disagreed with Boivin about the possibility of a steep drop." The exec noted that the cap is "based on revenue from the previous season." Shoalts notes most of the NHL's revenue for this season "has already been collected from broadcast rights, suite rentals, sponsorships and season tickets" (GLOBE & MAIL, 11/20).
FALLING CANADIAN DOLLAR HURTING TEAMS: BLOOMBERG NEWS' Frederic Tomesco reported the Canadian dollar has "dropped 21[%] against the U.S. dollar this year," which means the NHL's six Canadian franchises "generate less money when converting their revenue into U.S. dollars." Boivin: "We're concerned by the dollar's drop. A year ago we had a dollar at par, and now it's down around 80 cents. To be competitive, we need a dollar at par." Boivin noted that the Canadian teams contribute 35-40% of NHL sales, and added that "'it's possible' the salary cap will drop next season." Boivin: "Canadian teams account for a large part of revenue. We'll have to see what kind of growth the U.S. teams are going to have, but it's not impossible that NHL revenue will be flat this year" (BLOOMBERG NEWS, 11/19). Boivin: "We better not return to a 78-cent Canadian dollar because we'll be in the same position we were before the work stoppage" (CP, 11/19).
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