Over the last several years, the NHL's salary cap has been increasingly very steadily, about 8.5 percent per season on average. This was a result of a number of conditions coming together at once.

The league started doing more marquee events like outdoor games that brought in a lot of money from sponsors, and it also signed new television deals that likewise significantly increased revenues. Further, lots more people started going to games, especially because cornerstone franchises spent the last several years improving.

But most important of all was the fact that the Canadian dollar spent a lot of the time from 2006 to present doing pretty well in comparison with its American counterpart.

Apart from a pretty steep crash toward the end of the recession (when everyone was doing badly), the value of a Canadian dollar typically spent the last several years in the 95 U.S. cents range or so, and even occasionally cleared $1 U.S. dollar. This has been very, very good for the league, its teams, and its players. Everyone is getting paid, to the point that even a lockout didn't really do much to close tap that dispenses the hot and cold running hockey-related revenue.

But earlier this season, Gary Bettman came out and said that the cap might only rise to as much as $73 million — up 5.8 percent from the current $69 million — and that would constitute the smallest cap increase seen since 2010. Moreover, it should be noted that the $69 million salary cap seen this season was actually up a little bit from what the revenues actually dictated (closer to $68 million) and what the NHLPA therefore wanted. This was due to concerns over the amount of escrow they've had to pay.

The problem with the league's $73 million estimate was also a best-case scenario:

"Our best guess, and it’s got some variation in it, is that if the Canadian stays where it is now for the rest of the season, which is about 88 cents, that the cap for next season would be approximately $73 million," Bettman said in announcing the league's expectation. "That’s a guess, it’s subject to variation, and it also assumes that the Canadian dollar stays where it is now."

A lot of projections from economists, even at the time, were that the NHL was being overly optimistic with that 88 cents valuation. And the Canadian dollar definitively did not “stay where it [was then].” It has, in fact, crashed. Earlier this week, the Bank of Canada cut interest rates, and, well, here's the result. It crashed from a little less than 83 cents to the U.S. dollar — already well below the NHL's hopeful projections — to a little more than 81 cents. This may not seem like a huge decline, but when you're raking in millions and millions of dollars in revenues every month in Canadian dollars, the deficit adds up quickly. That's a lot of money lost because the league does business in U.S. dollars even as close to a quarter of the league collects money in Canadian ones.

How closely tied are cap increases to the value of the Canadian dollar? Have a look (but please keep in mind the NHLPA used to use its 5 percent cap escalator regularly):

Season % increase from previous year CAD$ value (previous June) 2006-07 12.8 $0.898 2007-08 14.3 $0.938 2008-09 12.7 $0.985 2009-10 0.2 $0.889 2010-11 4.6 $0.963 2011-12 8.2 $1.034 2012-13 (lockout) 9.2* $0.973 2013-14 7.2** $0.969 2014-15 7.3 $0.923

*using the $70.2 million prorated cap for lockout year

**using the actual $60 million cap for lockout year

Things haven't been this bad in terms of the value of the Canadian dollar since early 2009, and the cap increased just $100,000 the next season. The only other time it was less than 92 cents on the U.S. dollar was when the cap was at just $39 million (remember those days?), so any increase was going to be huge.

(It should be noted here that the minuscule increase seen in 2009-10, which I'd imagine was driven by the use of the player's elective cap escalator, came because the Canadian dollar started the season in the 85 cents range before plummeting as low as 79 cents late in the regular season. In this way, the league is actually kind of lucky to have caught the decline now, a little after the midway point of the regular season, rather than, say, a few months ago. That would have caused Road Warrior-type havoc; only those brutal enough to pillage would survive, and ordinary men would be battered and smashed.)

There's also the chance that the NHLPA could bail teams out and use its escalator once again to raise the cap by five percent, though the likelihood of their doing so seems remote because of how much they've paid in escrow of late.

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