The Canadian dollar is rising towards another all-time high and seems unlikely to dip below par. The US political/economic crisis virtually assures that the dollar will remain strong. The stronger Canadian economy and high commodity prices probably means the Bank of Canada will raise interest rates, putting a floor underneath the dollar. The C$ is becoming a mini-reserve currency in time of crisis. Some economists believe the dollar will exceed US$1.10 this year and may reach US$1.15 before it has a self-correcting impact on the Canadian economy (i.e. manufacturers can't handle loss of export markets).
Blah, blah, blah.
In essence, baseball talent is becoming cheaper. Most of the Jays expenses, except for the stadium and local marketing, are in US dollars. All baseball salaries (including scouts, some head office people, maybe even AA) are in US dollars. Stadium and national TV revenues are in Canadian dollars. And the Jays attendance is up over 3,000 per game. They are still at the low end of MLB attendance, but not quite so dismal as in the past.
Some there is this juxtaposition - weak US$, crappy US economy, flat attendance, some teams in full salary dump mode, versus the Jays with a nice currency advantage, a very low payroll, and a unique discount on the cost of talent. And of course, baseball has no salary cap.
Yes, I understand that the currency may recede, even fall below par, though that can be hedged. And the cost of hedging against current costs may offset some of the current advantage.
So, how does this affect the Jays thinking for the next six months, taking us through the trade deadline and free agency.
To me, it says the Jays should be using this economic clout - and Beeston said Rogers is ready to be a bigger spender.
It should look at exploiting salary dumps to take on talent that can bridge the team until some of our hotter prospects from New Hampshire on down reach the majors and establish themselves.
It should look at dealing prospects like Cooper who don't necessarily suit our ambitions, packaging them for an upgrade that could include taking on a Rivera-like salary with one or two years to go.
And it should offer high end money to the best free agents like Jose Reyes who can fit into the longer-term picture.
I've been critical of Rogers' spending. Now with the currency advantage, the likely addition of a second wildcard team, etc, there is no reason to act like a lame small market owner.
