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During the 2014-15 regular season, the first since it lost the national NHL broadcast rights to Rogers, CBC aired the Rogers-produced games mainly on Saturday nights. But under the terms of its deal (among other things, it maintains a regular Hockey Night in Canada presence on Saturday nights), Rogers collects all of the advertising revenue from games shown on CBC.

Mark Blinch/The Globe and Mail

Rogers Media isn't the only struggling partner in the NHL's $5.2-billion, 12-year Canadian broadcast deal. The league itself is hurting, too.

The contract with Rogers is paid in Canadian dollars, which sharply declined in value against the U.S. dollar after the deal was announced on Nov. 26, 2013. As a result, the NHL is taking a large hit in the contract's first season: One NHL governor, who spoke anonymously because league officials are forbidden to publicly discuss NHL business, said the currency hit for the 2014-2015 season was pegged at about 17 per cent, which, based on the annual average rights fee of $433-million, works out to a $73.61-million loss for the league.

This comes in addition to the revenue declines that all seven Canadian-based NHL teams are experiencing. They generate about 35 per cent of the league's revenue, which hit a record total of $3.66-billion (U.S.) for the 2013-14 season. The NHL tracks its revenue in U.S. dollars.

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When Rogers and the NHL first announced the deal, the Canadian dollar was worth 94 cents U.S. On Monday, after a week-long roller-coaster ride, the Canadian dollar closed at 81.71 cents U.S., an improvement from the March low of 78.2 cents.

Other than confirming the Rogers contract is paid in Canadian dollars with no allowances for currency fluctuations, NHL commissioner Gary Bettman declined to say how much the currency issue will cost the league this season. Outgoing Rogers Media president Keith Pelley said Rogers "does not discuss contracts in detail."

Another NHL governor said he could not confirm the claim of a 17-per-cent loss on the TV contract for this season. He said the extent of the loss should be revealed to the NHL's governors at their annual entry-draft meeting in late June.

Over the years, the NHL and its Canadian teams routinely hedged against currency fluctuations though trading. This was done mainly to protect teams against huge increases in their biggest costs – player salaries that are paid in U.S. dollars.

But more than one league insider is concerned the NHL's brass failed to protect itself in the Rogers deal, either by hedging or requiring that it must be paid in Canadian dollars at or near the rate that was in effect on the day it was signed. Bettman declined to say if any hedging was done to minimize losses on the Rogers deal.

A major loss on the Canadian TV deal for 2014-2015 will have an impact on the salary cap, currently $69-million (U.S.) per team this season. The cap is based on the league's total hockey-related revenue (HRR), so it's difficult to estimate the specific effect of the Rogers deal, but based on the league's own calculations, it could result in a $1.3-million (U.S.) drop per team in the cap for next season.

That is less than a 2-per-cent drop, but it makes a big difference to teams operating close to the cap. For example, last October, Peter Chiarelli, then the general manager of the Boston Bruins, traded defenceman Johnny Boychuk and his $3.37-million salary for draft picks on the eve of the season to create some much-needed cap flexibility. The loss of the veteran top-four defenceman weakened the Bruins, who just missed the playoffs, and Chiarelli was dismissed last week.

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The decline in the Rogers contract's value forced a re-evaluation by the league. Back in December, the NHL was suggesting the cap might rise to $73-million (U.S.) for the 2015-16 season, based on the expectation of an 88-cent Canadian dollar for the rest of this season and growth in HRR of about 4.5 per cent to more than $3.8-billion (U.S.). By March, the league revised its cap projection to $71.7-million based on an 82-cent dollar.

Since the Rogers deal is the largest single source of Canadian revenue for the league, and is a fixed amount unlike ticket sales, it was probably responsible for the subsequent drop in the cap projection.

Even worse, the NHL's estimates counted on the players exercising their collective-agreement right to bump the cap by 5 per cent, known as the escalator clause. In most years since the cap was introduced in 2005, the players have done so, but that was because the Canadian dollar was climbing and money in escrow was rarely clawed back.

If the players do not exercise the escalator, as is now expected, next season's salary cap would be $68.1-million (U.S.) based on the NHL's projections in March, which counted on the Canadian dollar staying at 80 cents.

The decline in the Canadian dollar and its effects on league revenues mean the players have to pay more of their salaries into the escrow account, which makes them reluctant to exercise the escalator clause. Under the collective agreement, funds in the escrow account are used in case the players' total incomes exceed the teams' share of revenues in the 50-50 split of HRR, which is calculated after each season ends.

Last season, the players lost 12 per cent of their annual salaries thanks to the shrinking Canuck buck. This season, they have already had 14 per cent of their wages withheld in escrow through the first half of the season, according to The New York Post, and that amount climbed to 16 per cent in the third quarter of the season.

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