from Will Hobson of The Washington Post,

It’s been a bad year for the loonie, Canada’s gold coin currency with a light-hearted name owed to the aquatic bird inscribed on its side. And that could be bad news for the NHL, and for efforts to bring an expansion club back to Quebec.

For much of the last 20 years, the NHL’s financial strength has correlated with the loonie. When the loonie drops, this hurts the bottom lines of the NHL’s seven Canadian teams because their revenue gets paid in loonies but have to pay their players in U.S. dollars. But a dropping loonie also hurts the NHL as a whole, because the league gets an estimated 30 to 35 percent of its overall revenue from Canada.

Canada’s oil-dependent economy is in a months-long slump, and it has resulted in a drop in value for the loonie, which traded close to par with the American dollar as recently as 2013. As of Friday, one Canadian loonie was worth about $0.75 American. To put the impact of that drop into perspective, the NHL is in the midst of a 12-year, $5.2 billion broadcasting deal with Rogers Communications paid in Canadian currency. In 2013, $5.2 billion Canadian was worth about $5.2 billion American. Today, that same amount of Canadian money is worth about $3.9 billion in the U.S.

So far, the impact of dropping loonie value has been most clearly apparent in the NHL’s salary cap, which is closely tied to revenue. Last fall, when the loonie was trading at 88 cents American, NHL officials predicted raising the cap by $5 million, from $69 million to $74 million. That didn’t happen. The NHL settled on a $71.4 million cap, a bump of $2.4 million, the smallest increase since 2005.

In a series of written statements, NHL and team representatives downplayed the potential impact of a plunging loonie because, they said, things have changed since the late 1990s and early 2000s, when long-running loonie struggles helped push NHL clubs to leave Winnipeg and Quebec. Others in the league acknowledge, however, that there is only so much the NHL can do to minimize the impact, particularly if the loonie continues to drop.

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