Tuesday, May 20, 2008

The Continental Hockey League™
A new super league: The KHL

The Continental Hockey League (KHL) sounds a bit like a Midwest circuit of another era, but as of the end of the 2007-08 season, the KHL is what we're to call the Russian Super League.

Why the name change?

This is the brainchild of Alexander Ivanovich Medvedev, a Russian oil baron and the vice-president of Gazprom, who has his heart set on creating a hockey league that can rival the NHL. But rather than take the best teams in Europe — let's say Jokerit and HC Davos — or creating new teams, what's happened so far is a modest expansion of the Super League and a new name.

The RSL had 20 teams last season, but for 2008-09, there'll be 24, with three teams from Belarus, Kazakhstan and Latvia, as well as a Russian club that was playing in a lower division, all joining the fray.

This is what the league will look like next season, as per Google Maps.

(In addition, the creation of the Continental Hockey League coincides with the start of the Champions League tournament, a high-profile new event to be played among the top 12 teams in Europe for the first time this fall. Here's hoping that'll be picked up on television in North America.)

Medvedev's goal is to expand the KHL to 30 teams by the following season, using gobs of money to lure foreign teams from competing leagues like the Swedish Elitserien. Frölunda, one of Sweden's richest and most successful teams, and Färjestad have been targeted already.

Medvedev has said teams from Austria, Finland and Germany have also shown interest in the KHL.

Färjestad's club director Hakan Loob apparently recently travelled to Russia to discuss the specifics of a switch with KHL representatives. And the new league has a Swedish agent, Leif Nilsson, on board to work with the KHL.

Russian PM Vladimir Putin, a big hockey fan, is also apparently supportive of the move. Investment in hockey, and salaries, has consistently risen as oil and gas prices rise, as many of the former RSL's ownership groups are energy-based mega-companies.

Players in Russia are already paid more than in Europe's other top leagues, and it's really only the RSL's current import rules (a limit of four per team) and social factors that have kept more players from playing there.

It's expected the league will incorporate an entry draft, as well as a salary floor and cap, likely between $10- and $25-million. For more on the structure and rules of the KHL, see this wiki.

Two NHLers who have already signed on with the KHL are Chris Simon and John Grahame, a pair that have, admittedly, seen better days. I think the fact they chose to forgo even a cursory look at playing elsewhere means the payday was considerable, however, and I'd bet there are many more NHLers about to be targeted.

There have also been rumours circulating amongst NHL players that Jaromir Jagr was offered a $12-million contract by Dynamo Moscow.

The real drain, however, could come from Europeans who choose to stay on that side of the Atlantic as the level of competition in the KHL improves. The New York Times noted Sunday that Sweden's top two scorers in 2007-08, Mattias Weinhandl and Tony Martensson, have both been scooped up by the new league.

There are other troubling signs for the NHL as well:
North American player agents say that there has been almost no movement from Europe to the N.H.L. of late — a reflection of the weak dollar, the collapse of the international transfer agreement between the International Ice Hockey Federation and the N.H.L., and the rise of Russian domestic hockey. Some agents say that the number of European players going to the N.H.L. in coming seasons will dwindle to a handful.
That sounds like legitimate competition for some useful talent.

More teams in Europe's top league means the need for more top talent, and it's certainly plausible more Simon and Grahame types follow the money at the end of their careers. Down the line, the pull of playing in a more desirable country like Sweden could also have an impact.

What this league will need more than anything is a move toward a more North American model of revenue generation, as the RSL always relied heavily on sponsorship subsidies to fund teams and it wasn't uncommon to see clubs lose considerable amounts of cash. Ticket prices and gate revenue, the bread and butter of the NHL, are low in Europe (and Russia in particular), and television has a long, long way to go.

There's also the question of how the minnows compete with the big boys, especially when many rinks in the former Soviet Union are nowhere near the sports complexes we see in Canada and the U.S.

Still, something's happening overseas, and it's worth keeping an eye on. I imagine I'll be doing so throughout the off-season.

If there are any experts on Russian hockey willing to discuss the KHL, please drop me a line.
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16 Comments:

At 8:52 AM, May 20, 2008, Blogger FAUX RUMORS said...

1) IF, and that's a great BIG IF, the KHL can incorporate significant numbers of non-Russian cities/teams AND elevate their salary cap to NHL levels then it could compete for some NHL-caliber talent
2) Up until now, with a few exceptions thrown in, the KHL/Euro leagues have attracted players who were never good enough to play here(Weinhandl, etc), or guys who's best days are behind them(Simon/Grahame, etc)
3) The dollar won't be low forever, and their could be a collapse of the high oil prices at some point. If this league is being funded largely by this monolithic enterprise it could easily collapse as fast as it starts
4) Additionally their is tremendous amounts of corruption/organized crime associated with these oil barons/owners. If players thought that NHL owners were unscrupulous, watch out! LOL

 
At 9:17 AM, May 20, 2008, Anonymous Anonymous said...

Putin is Prime Minister now, and another Medvedev is the President

 
At 9:20 AM, May 20, 2008, Blogger FAUX RUMORS said...

1) As they say, 'New boss, same as the old boss'. Putin still is the power broker in Russia despite the change in title!

 
At 9:31 AM, May 20, 2008, Blogger DCThrowback said...

Great comment by Faux Rumors. Point #3 is especially relevant. Commodity prices and not exactly known for their inflexibility.

 
At 9:47 AM, May 20, 2008, Anonymous Bob.C said...

Wow this reeks of scandal. Can't wait to see how it turns out. Wonder what the trip out to Amur Khabarovsk is like?

 
At 11:01 AM, May 20, 2008, Blogger DMG said...

Man, those guys on the Amur Khabarovsk team are going to be logging a lot of hours on their road trips...

 
At 2:22 PM, May 20, 2008, Blogger PRC. said...

James, most of the arenas in Russia are actually pretty new - built since 2000. There are a couple of exceptions, but these are the more 'historic' teams like CSKA and Dynamo Moscow. (Just think about the Super Series that took place last summer in Salavat Yalaev Ufa - the arena wasn't even finished when Russia hosted their first game!)

The Russian Federation (I'm not sure if this was pre-Fetisov or not - Dave King mentions Fetisov's influence in his book, p. 40, so maybe ask Eric about it?) actually put in place a program to modernize the sports facilities in the country (this may or may not have had something to do with the Sochi bid), and many of these new facilities are a result.

 
At 2:51 PM, May 20, 2008, Anonymous Anonymous said...

Good points by Faux Rumors.
I'd add:
1) Recall the NHLers going over to play in the RSL during the lockout and getting stiffed out of their paycheques.
2)Recall the Canadians going over there during the lockout and discovering that Russia is basically a medieval country. It doesn't take much of a leap to suggest Western Europeans might feel the same way.
3) The language barrier for North Americans and Western Europeans would be significant. Nobody learns Russia in school like Euros mostly all learn English. The former Eastern Bloc countries would fare better, since their languages are at least from the same linguistic branch.
4) If some Russian oligarch wants to pay Jagr $12 million to float around the ice all winter, more power to him. Call me when Yashin or Malkin reverse-defect back to the Motherland.

 
At 2:54 PM, May 20, 2008, Anonymous Anonymous said...

Yep, Khabarovsk is like flying from New York to Moscow and back, if not longer... It's a madness... Mogilny was from Khabarovsk.

 
At 4:08 PM, May 20, 2008, Blogger rananda said...

responses to faux rumors:

1) the rsl has already been competing with the nhl for talent. why would incorporating non-russian cities/teams make this any more easier. no non-russian city has even close to the money that the big russian teams have. the salaries for the best players in ger, swiss, fin, swe, and cze are not close to what they are on certain rsl teams.

2) while this has certainly been the prevalent, and most convenient, perception, it is simply not accurate. though you qualify your statement with "a few exceptions," i think there's more than a few. zinovjev and morozov are obv the biggest examples. these two are first-line nhl players that make more in russia, their home country, playing less games, than they would in the nhl. it's easy to suggest that morozov sucked in the nhl, but that's not true either. he was, along with ryan malone, the best player on the pens in 03-04 before the lockout. the morozov that stayed in russia for the 05-06 was even better than the one that left. kovalchuk gets all the glory in the gold medal game on sunday, but morozov and zinovjev were far better than him all tournament long. add in a bunch of younger russians (perezhogin, chubarov, kiril koltsov, emilin, pavel vorobiev artyukhin, afanesenkov) and even a good canadian (mark giordano) left the nhl to make more in russia. these players arent all-stars, but theyre all useful nhlers, and there are more than a few.

3) who knows what's going to happen. who would have ever thought oil prices would rise as high as quickly as they did. but most experts predict that gazprom will over take exxon mobil as the largerst company in the world, and as gazprom goes, so goes the russian economy, and so goes russian salaries.

4) this is more 1990's stuff than now. the russian teams are mostly run by huge, state-backed corporations, not that different than the nhl. the record of nhl owners being involved in crimes has not been recently. ask rigas, or kumar, or the ducks owner.

 
At 4:14 PM, May 20, 2008, Blogger S - Rho said...

This is kind of exciting for me... I may be living in Kazakhstan for the next two years, so being exposed to all different kinds of hockey would be great. That's if I'm close to Astana.

I really wonder how this experiment is going to go, especially considering the vast geographic divide between teams...

 
At 4:39 PM, May 20, 2008, Anonymous Firehead said...

I think the obvious parallel here is the Champions League of Football. Watch tomorrow and see if there is much difference between a Russian Oligarch funding a team (Chelsea) versus a traditional American corporation (Manchester United.)

I think you'll find these are highly successful examples of ownership, and that both types of ownership have poor examples as well (Hearts of the SPL, Liverpool.)

The RSL was beginning to compete for talent in the past few year: Yashin has returned, Malkin was held back, and various potential depth NHLers, North American and European, have chosen Russia over the NHL.

Eventually, I think the talent competition will come from Champions League riches (see Football) and with this competition will come the NHL's desire to get a piece of the action. For me, this is all good for the entertainment value of hockey.

 
At 6:22 PM, May 20, 2008, Blogger J. Michael Neal said...

There are some problems here. Faux Rumors mentioned some of them. His second point, obviously, is the one under discussion.

There are a couple of others, though. The travel was mentioned. It isn't just getting to and from Khaborovsk. The Kharlamov Division's travel schedule is going to be brutal. Riga, Yaroslavl, Togliatti, Omsk, Novosibirsk, and Khaborovsk? I hope you like sitting in airplanes, because you're going to be doing a lot of it.

Related to this is that I suspect this league is going to have some serious competitive balance issues. A lot of these cities are not only a long way from anywhere, they are also in the middle of nowhere. If I were making professional hockey player money, I could see living in Moscow, or St. Petersburg, or some of the cities not too far from there. I'm trying to figure out how much you would have to pay me to live in Chelyabinsk for six months out of the year. The answer is: a lot, and I'm currently unemployed. What do you think Mrs. Pronger would think about the shopping in Magnitogorsk?

If this league starts to draft players, rather than signing them as free agents, the drain of talent away from the NHL will dry up. The enthusiasm of playing for rookie money on the back side of the Urals will, I suspect, be lacking.

In the end, I think that there will be some good teams in the European part of the league, and maybe a few stars signing to play for big checks in some of the other cities. The depth players are going to much prefer either the NHL, or a team in their home country, if they can make it in those leagues.

 
At 9:10 PM, May 21, 2008, Anonymous harryhockey said...

I hope they get buttman fired, beating him at his own bs game. He'll be kissing up to them to try and get the NHL involved. It's not going to be his butt in the planes like the players might have to be. I hope the NHL owners get hurt in the pocket, so he can get kicked to the curb.

 
At 2:20 PM, May 22, 2008, Anonymous Anonymous said...

Neal, have you ever been to the "back side of Urals"? I will give you Khabarovsk, but both Omsk and Novosibirsk are pretty good cities. Novosibirsk is one of scientific centers of Russia. Add the difference in cost of living and you don't need to pay too much to convince a person to live there. Add difference in taxes (13% flat income tax in Russia) and the offer looks even more enticing. Especially, say, for a third-fourth line young player that would be either at NHL league minimum or on a two-way contract.

Unless NHL manages to renegotiate the transfer agreement, it is heading the way soccer operates - you have to pay for each player up front, before his salary kicks in.

 
At 9:42 AM, May 23, 2008, Anonymous Anonymous said...

Ilya Kovalchuk was asked by eg.ru in the past couple of weeks if he would consider playing in the new KHL and he said he wouldn't play in Russia again even if they offered him $20 million a season. While the salaries can compete with the NHL, the overall lifestyle still lags behind. Especially for someone who has experienced the NHL lifestyle in North America. They have to carry their own bags, and unload their equipment (which Kovalchuk is stilled pissed about.)

I don't think you'll have to worry much about the established stars leaving, but more about convincing draft picks to come over on entry level contracts.

 

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