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Tuesday, February 4, 2014

The Toronto Blue Jays Could Be Facing Yet Another Challenge For Payroll

Toronto is the only team in the MLB not in the USA.  With that comes foreign currency.  For the years of 1990 - 2007, the Canadian Dollar was hovering around the 70 cents mark for the duration.  The last economic crash in the USA - had the dollar at par for the better part of the last 7 years, including once reaching $1.1o for every George Washington bill in America.  The average for the exchange rate has been in the mid 90 cents range.  The loonie has been in a nosedive since 2014 kicked in - and now it is around 90 cents for every US Dollar.  If it goes down much more, it will be just another challenge the Jays will face in a vaunted AL East Division.

Toronto is the only team in the MLB not in the USA. With that comes foreign currency. For the years of 1990 – 2007, the Canadian Dollar was hovering around the 70 cents mark for the duration. The last economic crash in the USA – had the dollar at near par for the better part of the last 7 years, including once reaching $1.10 over every George Washington bill in America. The average for the exchange rate has been in the mid 90 cents range since 2008. The loonie has been in a nosedive since 2014 kicked in – and now it is around 90 cents for every US Dollar. If it goes down much more, it will be just another challenge the Jays will face in a vaunted AL East Division.


Hunter Stokes (Chief Writer): 


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It was a big reason the Montreal Expos are no longer in the MLB anymore.  It also affected the only Canadian franchise left for that same stretch.


I am talking of course about the Canadian Dollar.


Luckily for Toronto, the last 6 years have been decent for the exchange rate.


The mark has fluctuated predominantly between .94 -.99 cents per US Dollar from 2008 – 2014.


This is even more crucial for the Blue Jays considering they reside in a tough AL East with payroll powerhouses Boston and New York.


The Montreal Expos out forth 12 winning seasons out of 15 from 1979 - 1994 before the economics of the game decimated the organization - to the point they weren't viable in Canada anymore.  Montreal was forced to move to Washington.  A lot of the problems with the club originated from a failed downtown stadium project (along with a brutal scandal behind the OIympic Stadium Ballpark), but a huge reason was also the team taking in Canadian revenue - while paying out in US funds.

The Montreal Expos out forth 12 winning seasons out of 15 from 1979 – 1994 before the economics of the game decimated the organization – to the point they weren’t viable in Canada anymore. Montreal was forced to move to Washington. A lot of the problems with the club originated from a failed downtown stadium project (along with a brutal scandal behind the OIympic Stadium Ballpark), but a huge reason was also the team taking in Canadian revenue – while paying out in US funds. The franchise had to firesale talent to stay afloat from 1995 – 2004, including trying to weather an all-time low 62 cents exchange rate.


As of this AM, the dollar has been hovering around  90 cents right now.


This is very problematic because Toronto receives Canadian Dollars for their team revenue – while they have to pay their ballplayers in Us Greenbacks.


Financial forecasters have pegged that the dollar could go as low as 80 cents in the near future.  This is bad news for Toronto.


2013 was supposed to be the re-birth of the once proud franchise.  While the team battled weird injuries and lackluster play for a 74 – 88 record, the fans did make it count at the turnstiles.


The Blue Jays had the biggest attendance jump in the MLB from 2012 – 2013.  However this trend will not continue if the Jays struggle in 2014.


Going back to the dollar again.  It once toiled down at an all time record low of 62 cents near the millennium, which would be absolutely catastrophic right now.


From 1990 – 2007, the dollar routinely stuck near the 70 cents mark.  Pro sports saw several teams leave Canada for this very reason.


The NHL saw franchises in Quebec and Winnipeg head for Southern pastures in USA soil, and the NBA swooped up the Vancouver Grizzlies because the team could sustain enough cash flow.


The Montreal Expos may have survived if they were able to acquire a downtown stadium, and if the currency hadn’t of teetered in the wrong direction.


Expansion also will always have to tabled in Canada based on this very fact.  Vancouver has perhaps the best venue in North America, not to have a baseball team playing there – despite being capable of hosting a club.


NHL Hockey actually had to go so far as institute a money currency conversion fund from the USA clubs – to supplement the Canadian teams remaining.


This spells bad news for the Toronto Blue Jays long-term.  Just imagine their current payroll standing at $125 MIL – adding another $25 MIL just because of the dollar rate into US cash.


It would be very similar to paying a Luxury Threshold Tax Penalty for the New York Yankees.


Toronto may also lose its ability to add payroll due to this fact, and may have to start trading a few players.


Hopefully Rogers Communications (who owns the team – and also the national network TV rights) had the foresight to stockpile an endowment fund when the dollar was almost at par.


If the Jays stashed several hundred million dollars away into a US account, the franchise would be status quo.


2013 would filled with utter disappointments, and it would be a shame if Toronto can’t compete in the long run based on this recent failure.


Since the 1994 lockout (and when the organization had won back to back World Series in 1992 and 1993) the Blue Jays and Royals are the only 2 teams not to make the playoffs.


The MLB may even have to look at more payroll disparity for the new CBA when it expires after the 2016 season.  Our friends north of the border just hope the dollar doesn’t plummet this much more before this.


The Blue Jays won back to back World Series in 1992 and 1993, however once the Yankees jumped their payroll massively, and Boston soon followed, the team has mired in a 20 year playoff drought.  Only in the last year has the franchise spent over $100 MIL on Team Payroll.  with a 2014 budget forecast for $125 MIL, this franchise can not see a massive dip in the Canadian Dollar.  Unfortunately their plan to compete this campaign fell of its mark - when injuries plagued the team, and their Veterans played to a lackluster caliber.  This club still has a chance for the 2014 season, when the Yankees reset their spending.  Toronto and Kansas City are the only 2 teams in the MLB not to qualify for the playoffs since 1994.

The Blue Jays won back to back World Series in 1992 and 1993, however once the Yankees jumped their payroll massively, and Boston soon followed, the team has mired in a 20 year playoff drought. Only in the last year has the franchise spent over $100 MIL on Team Payroll. with a 2014 budget forecast for $125 MIL, this franchise can not see a massive dip in the Canadian Dollar. Unfortunately their plan to compete in 2013 fell off its mark – when injuries plagued the team, and their Veterans played to a lackluster caliber. This club still has a chance for the 2014 season. Toronto and Kansas City are the only 2 teams in the MLB not to qualify for the playoffs since 1994. Hopefully their ownership purchased more US currency when the rate was more favorable to help combat this downturn.


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A big thank-you goes out to Our ‘Chief WriterHunter Stokes for preparing today’s featured article.  Hunter is a Baseball Writer for MLB reports.


Hunter grew up in Lynchburg, Virginia and played baseball with Sheldon Bream (Sid Bream‘s son) at Liberty University in the NCAA.


His favorite player is Brian Wilson (how could you guess?), and he hates when people can’t think outside the box!


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Tagged: 1992 World Series, 1993 World Series, 2016 CBA, @MLBreports on twitter, AL East, boston red sox, Canadian Dollar, kansas city royals, montreal expos, nba, new york yankees, nhl, olympic stadium, quebec, rogers center, toronto blue Jays payroll 2014, US dollar, vancouver grizzlies, washington nationals

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