MONTREAL - Montreal Canadiens owner George Gillett says that despite the ever-rising loonie, the Canadian dollar's good fortune doesn't change the reality that owning an NHL club is still an expensive venture.
But the surging dollar is also giving the hockey club a certain amount of manoeuvrability financially, Gillett told The Canadian Press in a recent interview.
The Canadian dollar was hovering around US$0.62 when Gillett bought the Canadiens and the Bell Centre facility in 2001. At the time, observers had questioned the wisdom of buying a franchise when all the expenses were in American dollars while revenues were coming in weaker Canadian funds.
The Canadian dollar is currently worth about US$1.07.
"The economics of an awful lot of businesses have been affected by the change in the exchange rate, and the export business is more difficult today," Gillett said.
"On the other hand for those of us who have expenses in U.S. dollars, we now have an advantage. We had a 38 per cent disadvantage six-years ago and now we have a seven per cent premium, so that's a pretty big swing."
Gillett said that despite the rising value of the loonie, the NHL's salary cap will keep the team's payroll in check.
But a stronger dollar allows the hockey club to spend aggressively and continue to build with younger players and supplement with free agents.
"No matter what happens with the exchange rate, up or down, we're going to spend aggressively toward the cap," he said.
"It is certainly a better economic environment today than it was six years ago, there's no doubt about it. It makes it easier. But it is still a very difficult business when you have your player payroll at 54 or 55 per cent of your total revenue."
Gillett says the Canadiens have other financial difficulties, in particular property taxes on their home arena that their owner says total more than the 29 other NHL franchises pay combined.
The hockey franchise is contesting the City of Montreal over the evaluation of the building in court.
Gillett also says the Canadiens have to pay a share of their revenues to 11 small-market franchises to help them with their bottom line.
But Gillett says he doesn't think players will ask to earn salaries in the stronger currency. The current collective bargaining agreement is valid for another 4???? years and the question has not arisen yet.
Gillett says he's confident NHL commissioner Gary Bettman would deal with the issue if it did come up.