As the CAD Falls So Does Jays' Profitability

Among the many challenges of operating the only MLB franchise outside the US, currency exchange is top priority for the Toronto Blue Jays. As team president and CEO Mark Shapiro pointed out, the team takes in Canadian dollars (CAD) in ticket, merchandise, concession, and sponsorship revenue. However, player salaries and other expenses such as operating the team’s minor league system in Dunedin, FL are paid in US dollars (USD). In addition, the current revenue sharing model in MLB requires all teams to contribute 31% of their net local revenue which is combined and equally distributed to every team. The current exchange rate is 1 CAD for every .77 USD.

For arguments sake let’s assume that the Blue Jays generated $25M CAD in revenue in 2015. Under the revenue sharing model, the team would be required to pay $7.75M CAD (or just over $10M USD). However at the current exchange rate, the Blue Jays would actually have to pay more than $12.9M, or 51.6% of their total revenue. Almost certainly, addressing this issue by working with the commissioner’s office will be one of Shaprio’s top priorities in his first year with the organization.