By Joshua Clipperton
Max Domi is poised to begin his first season with the Chicago Blackhawks after previously playing for the Montreal Canadiens.
His dad, longtime enforcer Tie Domi, suited up for both the Toronto Maple Leafs and New York Rangers.
The family will have donned jerseys for four of the NHL’s Original Six teams once the 2022-23 schedule gets underway.
The younger Domi understands the league’s move to include corporate sponsor patches on its sweaters beginning this season — especially as the game continues to recover from the COVID-19 pandemic’s crushing economic fallout.
On some level, however, it also doesn’t sit right.
“It’s a catch-22, especially when you have a jersey like that,” the winger said of the NHL’s classic, storied threads. “You don’t want to mess with those too much.
“It’s tough, but we’ve got to make some money back any way we can.”
The NHL’s board of governors approved the plan to include sponsor patches on the front of jerseys last year. The NBA started selling jersey sponsorships in 2017-18, adding more than US$150 million in revenue to the league’s coffers on an annual basis.
Deputy commissioner Bill Daly said at last week’s NHL/NHLPA player media tour outside Las Vegas he expects roughly half his league’s 32 teams will have jersey patches this season — they will measure roughly nine centimetres by 7.5 centimetres — not because some can’t sell the space, but because the clubs can’t yet sell it for what it’s deemed to be worth.
“They’re going to be smart about it and make sure they get fair value for the real estate they’re giving up,” said Daly, who declined to put a dollar figure on what ads will mean to the league short-term.
“Over time, it’s going to be a significant source of revenue.”
NHL commissioner Gary Bettman had previously said the league would have to be dragged “kicking and screaming” for sponsor logos on jerseys to become a reality.
What it took was a pandemic.
“Just a matter of time, particularly with COVID,” said Richard Powers, an associate professor at the University of Toronto’s Rotman School of Management. “COVID saw reduction in revenues, they’re looking for other forms of income. This was inevitable.
“They started off at a slow pace. I don’t think we’re going to see ads like in NASCAR for a long time.”
The Canadiens were the first Original Six team to unveil a jersey sponsorship last week when Nick Suzuki was introduced as the 31st captain in franchise history — with an RBC patch opposite the “C” stitched on his chest.
The response from fans after seeing a corporate logo on the front of the team’s classic red, white and blue sweater was mixed at best, while Greenpeace Quebec criticized the club for inking a deal with what a spokesperson called, “The worst bank in Canada, the one that contributes the most to climate change.”
In terms of esthetics, Suzuki said he doesn’t mind the RBC logo.
“Just the way things are going in this generation,” he said. “I know people like the pure jersey. I would like that too. But it’s how it is.
“It’s where the NHL is going.”
The Leafs earlier this week unveiled their jersey sponsor patch — the Dairy Farmers of Ontario’s “Milk” logo.
The NHL added corporate sponsors to helmets ahead of the 2020-21 season, largely to help make pandemic-impacted business partners whole.
“You knew something like that was coming,” Leafs captain John Tavares said of jersey patches. “We saw the helmet ads come in, which I think probably makes it a little bit easier to see.”
Vancouver Canucks head coach Bruce Boudreau, who played in the NHL when rink board advertisements were first being introduced, said he thinks a solitary sponsor logo on jerseys is just the beginning.
“If they’ve got the right colours, everything’s good,” he said, before adding of the Leafs’ sponsor: “Milk for kids — that’s a pretty good message, right?”
“We started to wear (ads) on helmets,” Calgary Flames head coach Darryl Sutter said. “You know jerseys is the next one.”
But Powers said the RBC blowback is an example of how teams will have to navigate this new arena of advertising.
“Their choices will be based on a risk-reward template and identifying those potential risks, and the likelihood that somebody is going to speak up,” he said. “Who would have imagined RBC getting controversy from that? But maybe (animal rights advocacy group) PETA comes in and says, ‘Listen, we can’t have milk on there because cows are being mistreated.’
“There’s risks with every decision.”
Players continue to owe NHL owners money as part of an extension to the collective bargaining agreement that helped get the league back up and running in the summer of 2020.
In short, the more hockey-related revenue — jerseys ads are now part of that pot — the sooner that cash gets recouped.
“It’s growing the brand,” Philadelphia Flyers winger Cam Atkinson said. “But I also love having that clean-cut jersey … the stickers on helmets, too. It still gets a little silly in my opinion, but I get it. Companies want to grow their brand on the best stage in the world, so I go back and forth.
“But I also like a clean-cut look.”
That’s now a thing of the past.
“I don’t think fans will be too upset,” Powers said. “I think they’ll appreciate it, particularly if this is the alternative to raising ticket prices.
“And maybe teams can keep the beer at $18 a pop.”
-With files from Gemma Karstens-Smith in Whistler, B.C., and Donna Spencer in Calgary.
This report by The Canadian Press was first published Sept. 23, 2022.
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What the latest Bank of Canada rate hike means for inflation, consumers
By Tara Deschamps
The Bank of Canada hiked its key policy rate by half a percentage point to 4.25 per cent — the highest it’s been since January 2008 — on Wednesday in its final rate decision of a year that has been marked by stubbornly high inflation and rapidly increasing interest rates.
The bank, which has made a steady succession of large hikes over the course of the year, is widely believed to be nearing an end to the increases.
In announcing the rate hike Wednesday, the bank said it will consider whether the rate “needs to rise further to bring supply and demand back into balance and return inflation to target.”
Here’s a look at what the rate means, how analysts are interpreting it and what it could mean for consumers.
What is the key policy rate and what does it do?
The key policy rate, also known as the target for the overnight rate, is how much interest the Bank of Canada wants commercial banks to charge when lending each other money overnight to settle daily balances.
Knowing how much it costs to lend money, or deposit it with the central bank, helps set the interest rates charged on things like loans and mortgages.
Lowering the rate generally makes borrowing money more affordable, while raising it makes such activities more expensive.
Why is the bank using the rate to target inflation?
Inflation is a measure of how much prices of goods and services are rising or falling. High inflation is a sign of an economy that’s overheating.
Canada’s annual inflation rate reached a peak of 8.1 per cent in June, the highest level in four decades.
It has eased since then, reaching 6.9 per cent in September, but didn’t budge in October. And shoppers have seen higher prices for common expenses like groceries. Grocery prices have been rising at the fastest pace in decades and were 11 per cent higher in October than they were a year ago.
Economists and the central bank want to see a further easing, which is why interest rates have been rising so quickly in the hope of cooling consumer spending patterns.
“Inflation is still too high and short-term inflation expectations remain elevated,” the bank said in its announcement. “The longer that consumers and businesses expect inflation to be above the target, the greater the risk that elevated inflation becomes entrenched.”
What does this mean for my mortgage?
Mortgage rates tend to increase or decrease in tandem with interest rates.
When Canadians buy homes there are two kinds of mortgages they can select — fixed rate or variable. Fixed-rate mortgages allow borrowers to lock in the interest rate they will pay for a set amount of time, while variable-rate mortgages can fluctuate.
Allison Van Rooijen, vice-president of consumer credit at Meridian Credit Unit, estimates the rate hike Wednesday will bump payments on a $450,000 variable-rate mortgage on a 25-year amortization up another $130 or so every month. Since the beginning of 2022, rising rates have amounted to roughly $1,000 more per month since the beginning of 2022.
“Because of the high cost of housing in Canada and years of low borrowing rates, Canadians are carrying record-levels of debt on mortgages and lines of credit, so it’s really important that people go through their expenses and look to scale back discretionary spending where they can,” she said in an email.
She recommends people double down on efforts to pay off debt with higher interest rates as much as possible and if they are running into trouble making payments, discuss whether switching to another format of mortgage is right for them.
Does this mean interest rates will stop rising soon?
Shortly after the announcement, many economists predicted the bank isn’t done with hikes yet, even though the language in the statement signalled the possibility of holding steady at 4.25 per cent.
BMO Capital Markets chief economist Douglas Porter said a further hike of about 25 basis points is likely still to come because he’s concerned about the “stickiness of underlying inflation.”
James Orlando of TD Economics agreed. He expects the bank will deliver its final rate hike for the foreseeable future in January, bringing the measure to 4.5 per cent.
“We don’t think the Bank of Canada is done yet, but it is quickly approaching the end of its hiking cycle,” he wrote in a note to investors.
“As all Canadians know, the rapid rate hikes over 2022 have caused a dramatic adjustment in the real estate market, and we are starting to see this in consumer spending data. We expect this to continue to weigh on the economy over 2023 as the lagged effects of past hikes filter through.”
This report by The Canadian Press was first published Dec. 7, 2022.
Experts raise concerns as Nigeria limits cash withdrawals
By Chinedu Asadu in Abuja
ABUJA, Nigeria (AP) — Experts on Wednesday raised concerns over a new policy announced by the Central Bank of Nigeria that heavily limits withdrawals of money in a push for a cashless economy.
The monetary policy, which applies to ATMs, banks and cash back from purchases, follows the launch of the West African nation’s newly designed currency notes to control the money supply.
The central bank limited weekly over-the-counter cash withdrawals to 100,000 naira ($225) for individuals and 500,000 naira ($1,124) for corporations, with a processing fee required to access more.
When the policy takes effect in Jan. 9, ATMs will no longer dispense Nigeria’s high denominations of 1,000 naira ($2.25) and 500 naira ($1.10) while withdrawals from ATMs and point-of-sale terminals also will be limited to 20,000 naira ($45) daily.
“In compelling circumstances, not exceeding once a month, where cash withdrawals above the prescribed limits are required for legitimate purposes, such cash withdrawals shall not exceed 5,000,000 naira ($11,236) and 10,000,000 naira ($22,471) for individuals and corporations, respectively,” said Haruna Mustafa, the bank’s director of banking supervision.
Policymakers say the withdrawal limits and recent monetary initiatives from the central bank would bring more people into the banking system and curb currency hoarding, illicit flows and inflation.
But analysts worry that with digital payments often unreliable in Nigeria, the initiative could hurt daily transactions that people and businesses make.
“The policy is intended to cause discomfort, to move you from cash to cashless because they (the central bank) have said they want to make it uncomfortable and expensive for you to hold cash,” economic analyst Kalu Aja said.
“That is a positive for the CBN (because) the more discomforting they are able to achieve, the more people can move,” Aja said.
In Nigeria, the majority of people work in the informal sector — mainly activities outside of the legal framework and government regulation such as farming, street and market trade, and public transport. The economy is heavily dependent on this sector, and cash is usually preferred for transactions because many lack bank accounts.
Only 45% of adults in Nigeria have accounts with regulated financial institutions, according to the World Bank. In the absence of bank accounts, point-of-sale terminals have emerged as one of the fastest-growing areas of financial inclusion in the country.
Through the withdrawal limits, the central bank is “directly attacking” such agency banking services and “people will essentially begin to hoard their money,” said Tunde Ajileye, a partner at Lagos–based SBM Intelligence firm.
“It is not going to drive people to start to try doing electronic transactions. On the contrary, it is going to move people away from the financial institutions,” he said.
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