It certainly won’t help Ottawa Senators fans who want Jason Spezza to play more consistently or Filip Kuba to hit more, but they can take some solace in the fact that their team has done a good job of insulating itself from the tough economic times that lay ahead.
At least for the rest of this season.
In an interview for the Nov. 3 edition of The Hockey News, Senators president-CEO Roy Mlakar revealed that the Senators bought enough American dollars about a year ago to fund their payroll for the rest of this season.
What does that mean? Well, you’ll recall the Canadian dollar was trading well above par over the American greenback a year ago, a far cry from Wednesday when it fell below the 80-cent mark. Those who bought up American dollars then got them at a bargain. Since players are paid in U.S. funds, the Senators are paying their players this season with American dollars that aren’t costing them a fortune.
It’s called “hedging” and the Canadian teams have to do it all the time. The Edmonton Oilers are hedged through January, while the Calgary Flames are not. The fact that the Senators are puts them in a better position to absorb the body blows of a faltering economy.
“The story from Ottawa is not all doom and gloom,” Mlakar told THN. “We’re locked in.”
Now it becomes a question of whether or not the Senators, and other Canadian teams, start investing in Canadian dollars, hedging their bets that the experts who say the dip in the loonie is temporary and will rebound are right. The thinking is that Canada’s resource-based economy insulates it from disaster because those things are in demand around the world, particularly in China and India, which are both big consumers at the moment.
No matter what, though, Mlakar acknowledges that a significant and long-term downturn will hurt the Senators and everyone else in the NHL. That includes the players, whose salaries are tied directly into league revenues.
“Sport has always had a tradition of being relatively immune to recessionary periods,” Mlakar told THN. “I’m not so sure this time. It’s pretty bad out there.”
This column also appears in the Ottawa Metro newspaper.
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