Loonie Economics in the N.H.L.
By JEFF Z. KLEIN and LEW SERVISS
The New York Times
Published: January 27, 2008
A decade ago, the N.H.L.’s Canadian franchises were the league’s economic weak links, with two teams leaving for the United States and at least half the remaining six close to insolvency.
Now the skate is on the other foot. The Canadian clubs are worth more on average than the league’s American clubs, according to estimates by Forbes magazine. And two Canadian teams are being sought for purchase by billionaires — not to move them to the American Sun Belt, but because they are so lucrative where they are in Canada.
The turnaround is largely because of the weakened United States dollar, which was worth about $1.50 Canadian throughout the 1990s and well into the 2000s, but is now at par. The increased relative value of the loonie, and the salary cap instituted in 2005 after the N.H.L. lockout, effectively increased the values of Canadian teams by nearly half.
The rank of the average Canadian team in Forbes’s annual N.H.L. franchise valuation estimates was 21st
among the league’s 30 teams in 2001. It was 13th last year, and is 11th this year.
“The exchange rate and the salary cap have both kept down costs for Canadian teams, because salaries are
paid in U.S. dollars,” said Drew Dorweiler of the Montreal valuation and accounting firm Wise, Blackman.
“That has led to a big and relatively sudden boost for Canadian teams.”
According to Michael Rapkoch, the president of Sports Value Consulting, a Dallas company that advises
professional franchises, “In Canada, the fan base will always fill the arenas and get you big television ratings.” That level of interest, he said, enables Vancouver, Calgary, Edmonton and Ottawa to draw large audiences on club-owned pay-per-view channels and even for special showings in movie theaters.
All this has led to big purchase bids. The Russian-Canadian steel magnate Alex Shnaider offered a reported
$1.75 billion to buy the Toronto Maple Leafs and their properties earlier this month. Also this month, Daryl Katz, the chairman of one of North America’s largest drugstore chains, offered $188 million to buy his hometown Edmonton Oilers, a team that 10 years ago was hours from moving to Houston.
The new financial strength of Canadian teams is a far cry from the days when the Quebec Nordiques moved
to Colorado and the Winnipeg Jets to Phoenix, and the N.H.L. instituted subsidies to Canadian teams to
make up for currency differences.
Last year, the Nashville Predators came close to moving to Hamilton, Ontario. Dorweiler said that the next
time an American Sun Belt team is in financial trouble, the talk may not be of a move to Kansas City or
Seattle. “A place like Hamilton or Winnipeg is now a very viable option,” he said.
A Neely in Training
Milan Lucic, the Boston Bruins’ punishing rookie left wing, was 8 when Cam Neely, the Bruins’ punishing
right wing, played his last game for Boston in 1996.
Lucic, now a 6-foot-4, 220-pound 19-year-old, has enough offensive flair to go with his crash-and-bang instincts to remind many of a young Neely.
“He thinks about being physical first and foremost,” said Neely, a Hall of Famer and now a Bruins vice president, “and that’s the path that I had when I played.”
Lucic, the Vancouver-born son of Serbian immigrants, is third among rookies in hits (the Rangers’ Brandon Dubinsky leads) and has gotten into nine fights. He has only five goals and six assists, but Lucic (pronounced LOO-cheech) has shown enough potential to be chosen for the Young Stars game during the All-Star weekend.
He has also had the luxury of participating in a power-forward master class on the ice with Neely. They have worked on “coming down the wall, protecting the puck, driving to the net,” Lucic said, adding, “He’s been good with getting me to relax and play my game.”
No Crosby, Extra Malkin
It is a Pittsburgh Penguins tradition — when a star goes down, another steps forward.
A decade ago, it was Jaromir Jagr picking it up for Mario Lemieux. These days, it is Evgeni Malkin holding the fort while Sidney Crosby takes six to eight weeks to recover from a high ankle sprain.
At 21, Malkin is a year older than Crosby and has a Calder Trophy as rookie of the year, an honor that eluded Crosby. The Penguins had won 9 of 10 games before Crosby was injured Jan. 18 and had climbed the Atlantic Division standings to challenge the Devils for first place.
In the first two games after Crosby was sidelined, Malkin had an empty-net goal in a 2-0 victory over Montreal and two goals and an assist in a 6-5 shootout loss to the Washington Capitals
The Capitals star Alex Ovechkin, who eclipsed Crosby for the Calder in the 2005-6 season, also had two goals and an assist. But he was the one left sprawled on the ice when he tried to put a hit on Malkin behind the Washington net.
Penguins Coach Michel Therrien said that Malkin was the team’s leader offensively and that “he wants to bring his teammates to another level with the loss of Sid.”
Clash of Philosophies
Last week’s biggest showdown in the N.H.L. was on Wednesday in Anaheim, where the defending Stanley Cup champion Ducks played host to the team that is currently in first place over all, the Detroit Red Wings.
It was a clash of two big rivals — the Ducks were the league’s second-hottest team over the previous month, after Detroit, and of course they beat the Wings in last season’s playoff semifinal, four games to two.
But it was also a clash of philosophies. The Ducks, whose roster is overwhelmingly Canadian and American, lead the league in fights this season and did so last season. Detroit, most of its key players European, has had the fewest fights over the last two seasons.
On Wednesday, the Red Wings jumped to a 2-0 lead on goals by Brian Rafalski and Valtteri Filppula, then held on to win, 2-1. They even fought the Ducks twice.
“It’s like you want to show who’s the bigger, better team,” Detroit forward Johan Franzen said afterward. “We stood up good. It was a lot of fun.”