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Does dollar rise benefit TFC?


Guest Jeffery S.

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Guest Jeffery S.

Just curious if this could be at all quantifiable.

If MLSE did their budget for this season in the fall, how much has the dollar shifted upwards since then, and what would that mean in terms of savings or reduction of expenditure for the club? Would it mean that MLSE will be even more solvent this year, paying less CDN than foreseen in salaries?

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Guest Can. in UK

I seem to remember an article in the Montreal Gazette on this topic. I think it stated that either the Expos/Canadiens (can't remember which) was $1,000,000 better or worse off for every 1 cent change on the Canadian dollar... so I would imagine it does make a pretty big difference.

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I would imagine that MLSE would hedge themselve in the financial markets in respect of the dollar falling. So any fall would likely not impact them in the short term.

That being said, they probably only benefit in case of a rise for the reasons stated above (many expenses in US dollers).

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quote:Originally posted by coppercanuck

hhhmmm This isn't you typical Canadian export product. The higher dollar means that the "value" of the revenue (tickets, jersies, etc.) will be higher when compaeto those US$ salaries. Please correct me if I'm wrong, I'm just a simple engineer!

That is correct. Basically, Canadian sports teams take revenue in Canadian dollars, but their costs for players salaries are US dollars. So, this is one of a few industries that beenfits from the rising value of the Canadian dollar.

A better question might be. Are USL players paid in Cnd dollars or US dollars? If its in Cnd dollars, then what happens to those USL players who made the jump to MLS? I would assume that their USL contract got torn up and re-written? and if that is the case, then why does someone have to pay a transfer fee for that. I always thought that in soccer a transfer was akin to a trade on North American sports where by the acquiring team gives up rights to other players in exchange instead of cash and the contract doesn't stays in tact. Maybe the deal for Sutton was something more of a gentlemens type of agreement rather than an actual soccer transfer.

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quote:Originally posted by Jeffrey S.

Just curious if this could be at all quantifiable.

Sure, e.g. if Toronto's salaries are $2.5M US, and the USD has depreciated 1% vs. the CAD, then TFC is better off in CAD terms by about $25k/year going forward.

You'd see bigger effects to the bottom line as aforementioned in the NHL, where revenues and expenses are both much higher.

Not really big money, but it's better than a kick in the pants. ;)

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Guest Jeffery S.

Thanks, though I think it makes sense they would insure or hedge against excessive fluctuations.

On the other hand, if I understand correctly, a player making 30 grand US and being paid after converting into Canadian dollars, would be getting less in each successive paycheck as long as the CDN buck was rising.

So that the Canadian player, originally benefitting from the stronger US dollar, would in fact be getting smaller paychecks and saving his club money. And this would especially be the case with Canadian players, or non-US, as the Americans would perhaps be getting paid into their US accounts exactly what their contacts stipulated.

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