Hockey | NHL salary cap hangs on Canadian dollar

 NHL commissioner Gary Bettman says he's keeping a close eye on the loonie and how it will affect next season's salary cap. Mary Altaffer/AP

Stephen WhynoThe Canadian Press
Fans and executives of teams that can spend up to the salary cap should put their rivalries aside to root for the Canadian dollar.

That’s because the value of the loonie for the rest of this NHL season will help determine just how far the cap deviates from the preliminary estimate of US$73 million the board of governors was given Monday. Commissioner Gary Bettman, owners and general managers will continue to watch the loonie carefully.

“Our best guess, and it’s got some variation in it, is that if the Canadian stays where it is now for the rest of the season, which is about 88 cents, that the cap for next season would be approximately $73 million,” Bettman said. “That’s a guess, it’s subject to variation, and it also assumes that the Canadian dollar stays where it is now.”

The NHL, more than any other major professional sports league, is beholden to the Canadian dollar because it has 23 U.S.-based franchises and seven in Canada. The Toronto Maple Leafs and Montreal Canadiens generate significant revenue, but when the Canadian dollar is weak, that amount is less when it’s converted to U.S. funds.

Bettman cautioned that the estimate of $73 million (and floor of $54 million) is “not carved in stone.” Much of the uncertainty has to do with the fluctuation of the Canadian dollar.

“Obviously if the Canadian dollar rises relative to the U.S. dollar, the cap will go up a little bit, and if it goes down the Canadian dollar, the cap will go down a little bit, but that’s the universe that we’re in,” Bettman said.

Bettman added that any speculation about the cap going down from $69 million “would require either a lack of understanding of the way the system works or the economy of Canada ceasing to exist, and that’s not going to happen.”

General managers, even those of U.S.-based teams, have to care about the health of the loonie because of what it means to next year’s budget.

“Here we are in (December) and we have the Canadian Dollar fluctuating so much, you sort of look at it, digest it, talk about it when you get home with your people, your general manager, your cap people,” Columbus Blue Jackets president John Davidson said. “It’s nothing out of the ordinary.”