Monday, July 21, 2008

Will Russian laws close the pipeline?

The advent of a well-funded Russian league, reforms to that nation's labor laws and the decision of 21-year-old Alexander Radulov to leave Nashville and return to play in his homeland likely will discourage NHL franchises from investing future high picks in Russian players.
"It's only going to get worse in the minds of (NHL) general managers," one NHL agent said. "They are going to be more reluctant to take (Russian players) early because they're not sure if they will be able to come over."
Another good piece from the Columbus daily.

Nikita Filatov was picked sixth overall by the Blue Jackets because the team did its research into how easy it would be to get him to play in North America this season. Filatov has always expressed a desire to do so, regardless of where he plays, and the fact he was drafted by the OHL's Sudbury Wolves could mean we see him there next season.

The IIHF, however, has suspended him from international competition for the time being. The KHL is kicking up a fuss without much of a case, and new laws are specifying that he would have to buy himself out of a contract that may or may not exist.

In other words, as "easy" as Filatov is to bring over, there are still few guarantees.

There's been a lot of talk about the KHL's ability (or lack thereof) to poach established players from the NHL, but perhaps the greatest threat comes from the fact that homegrown talent is becoming increasingly difficult to bring to North America.

Evgeni Malkin comes to mind.

This is what drafting from the top five overseas nations has looked like the past 18 years:

No. of players picked

(Keep in mind that the number of picks in the entry draft has decreased from 290 to 211 over the past few years.)

And that nosedive in Russians drafted was before these KHL-inspired changes to labour laws:
Recent changes to Russian employment regulations will make it increasingly difficult for players under contract to leave. An NHL agent said that a new law will require a departing player to repay two-thirds of his salary under his Russian contract. The agent said the KHL is pressuring teenagers to sign long-term deals.
Even if Filatov jumps through the hoops and ends up in a Blue Jackets uniform, he could be the last of a dying breed.

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At 7:54 p.m., July 21, 2008, Blogger saskhab said...

This comment has been removed by the author.

At 7:56 p.m., July 21, 2008, Blogger saskhab said...

Meanwhile, the Czechs and Slovaks, who have the worst paying pro leagues of major hockey countries, are just not developing many good players anymore.

What about other countries whose players fall under the RSL/KHL umbrella? Belarus, Latvia, Ukraine, Khazakstan... Not a ton of numbers, obviously, but it's interesting to see the trends there.

I'm curious as to the fight the KHL is willing to put up with for Montreal draft pick Maxim Trunev, who is supposedly coming over to play in Portland (WHL) this year after going 3rd overall in the CHL Import Draft. I'm not even sure about his contract situation in Russia, though like Filatov, he's been wanting to come over to North America ASAP.

At 9:50 p.m., July 21, 2008, Anonymous Anonymous said...

An NHL agent said that a new law will require a departing player to repay two-thirds of his salary under his Russian contract. The agent said the KHL is pressuring teenagers to sign long-term deals.

Figures. If you can't convince them to stay honestly, bludgeoning can be an effective tool.

At 9:59 p.m., July 21, 2008, Blogger J. Michael Neal said...

I can see requiring someone to pay back 2/3 of money they have already received for services not rendered. If a player is under contract with a team, I can see damages imposed if he plays with someone else, or an injunction to prevent him from playing.

There is no way that a US (or, I suspect, a Canadian) court is going to allow any sort of enforcement of a requirement to pay 2/3 of the money that remains unpaid on a contract. It won't happen; it'll get tossed out on its ear. Any Russian player who comes over here and has any sort of half decent financial advisers helping him protect his assets isn't going to have to worry about that requirement.

As I said in another thread, though, the rationale for the suit against Evgeni Malkin being dismissed from a US court was not coercion, but rather a provision of Russian labor law. From the tone of this article, my guess is that that provision has been changed for hockey players. What would happen now in the case of a Russian club trying to get an injunction in such a situation is not as clear.

At 10:42 p.m., July 21, 2008, Blogger danae said...

that nosedive in Russians drafted was before these KHL-inspired changes to labour laws

Also contributing to the decline of European players drafted are the post-lockout rules regarding their rights. Teams must now sign them within two years, same as North American prospects. (I don't believe it applies where there's no transfer agreement in place, eg. Russia.) Previously, a team could hold onto a European player's rights until he was 31, plenty of time to develop into an NHLer. It's no longer advantageous to take a European over a North American of similar ability.

At 11:18 p.m., July 21, 2008, Anonymous Anonymous said...

It's no longer advantageous to take a European over a North American of similar ability.

There's the silver lining to all this.

At 6:51 a.m., July 22, 2008, Anonymous George Malik said...

In sone senses, and most certainly in the case of coercing/threatening younger players in order to lock them up to long-term, binding contracts, it is entirely possible that the pipeline of prospects from Russia to the NHL will all but dry up, but I'm finding it hard to wrap my head around the concept that the KHL will ever be the equal competitor to the NHL for elite talent that it wishes to be.

The Russian papers have been rife with polemics from the Russian hockey columnists who claim that the KHL will be the NHL's equal, but I just don't see it happening for a simple reason--the NHL's proven that, unless you're tapping from a base of talent that's both international and comes from a strong developmental background, you're not the best league in the world.

The KHL can go ahead and believe that it's going to have a monopoly on the Russian-born talent that rises through the ranks of the crippled post-Soviet developmental ranks, but, aside from the players who would be AHL'ers without the CBA's de-facto AHL veteran per-player cap of around $100,000 and the few misfits (like Ray Emery) and players who decide to "head home" (like Danny Markov and Darius Kasparitis, who's Lithuanian, FTR)...The KHL will basically be drawing from a talent base that produces very few goaltenders and very few elite players...

And those elite players want to play in the best league in the world, not the KHL, and will find a way to get there and stay there.

Evgeni Malkin signed a long-term deal with the Penguins earlier this month. Pavel Datsyuk's built a house in Metro Detroit. Alex Ovechkin's got a lifetime deal with the Capitals. Filatov wants to be a Columbus Blue Jacket, which is saying something in itself about the lure of the NHL.

As Freddie Brathwaite told the Hockey News recently, all the money in the world can't change the fact that North Americans heading to Russia, use of a car and apartment included, will play in a country where, outside of Moscow and St. Petersburg, you might as well hire yourself a translator, the quality of off-ice life isn't the same as it is in North America, and in a league that now spans the easternmost shores of the Baltic and the Russo-Chinese border on the Amur river, Aeroflot is still Aeroflot.

At 9:17 a.m., July 22, 2008, Anonymous Anonymous said...

[the quality of off-ice life isn't the same as it is in North America]

That's true, but a lot of young players are homesick. If they will be paid the same or more money, a lot of them, not all, will leave back to Mother Russia. I didn't realize that until I read the interview with Cap's Alex Semin.

At 9:39 a.m., July 22, 2008, Blogger FAUX RUMORS said...

1) So the bottom line is that we'll see fewer second tier Russians in the NHL, but probably still get the top stars. Few fans will perceive that enough to reduce interest/attendance (the real bottom line)
2) Few top notch North Americans will flee the NHL any time soon if what Brathwaite says is true about the quality of life, etc. Therefore the KHL at this time is NOT a NHL rival, but a significant annoyance

At 10:38 a.m., July 22, 2008, Anonymous Anonymous said...

I don't see any problem with Russian labour law. If you're under a contract why would you be able to leave without compensation?

The real problem is these fantom deals like Filatov's where term is over but according to Medvedev deal is still binding????

The way Russians/KHL are acting these days bring back memories from communist times. Players have to basically defect to get out of there.

At 11:17 a.m., July 22, 2008, Blogger saskhab said...

Convincing NHL stars to end their career in their league? Signing young prospects to binding professional contracts before the NHL can get their hands on them? A great disparity between the have and have-not markets? Playing before audiences the NHL has ignored?

The WHA comparisons never end.

Of course, no one seems to complain in baseball circles over the fact that the MLB doesn't have all the best players in the world, with Japan hogging it's own talent for the most part and having to pay extravaggent transfer fees to bring their stars over.

Both leagues can co-exist... that's the example that is given. I just don't think the NHL is ready to accept that arrangement, and the KHL is simply fighting fire with fire.

At 3:36 p.m., July 22, 2008, Blogger J. Michael Neal said...

I don't see any problem with Russian labour law. If you're under a contract why would you be able to leave without compensation?

No one, outside the NHL itself, is saying that there shouldn't be compensation for players that leave in the middle of a contract. What I am saying, at least, is that North American courts aren't going to enforce a Russian labor law written like this. Under American law, damages awarded have to be commensurate with the damages actually suffered.

There is a concept of "liquidated damages." What this states is that a clause in a contract that specifies the damages that can be claimed for breach of contract is only enforceable to the extent that that the damages were reasonable and foreseeable at the time that the contract was signed. I find it highly unlikely that an American court is going to hold that damages of 2/3 of contract money that hasn't been paid yet was reasonably foreseeable.

Now, the Russians may have more luck getting an injunction preventing such a player from playing for a North American team than they were with Evgeni Malkin, since it appears that the law that that case turned on has been changed. Based upon the limited information I have, I wouldn't say that it is a slam dunk, but it's certainly possible. There are a couple of things that a court may look at skeptically.

At 12:39 a.m., July 23, 2008, Blogger A.S said...

The relationships between NHL and KHL need to be regulated and this is obvious. But the key point for those [who inspired KHL creation and is backing it up at the moment] in Russia is to stop one way flow of players and eventually turn the tide.
I'm Russian and I can clearly see how the things are changing nowadays. Yes, Radulov is overpaid at Ufa but this is not considered as something unusual here since you always have to pay 'to enter the market'. Salaries offered here are tempting also because of the taxes that are just 13 percent for all and it surely makes even an average deal look prettier.
As for the off-ice life it's not that bad as it may seem. I'm living in St. Petersburg and I can compare the standards of the US where I was and the standards of modern Russia. Life is very comfortable here for the rich. Jagr playing for Omsk during the lockout (Omsk is far from St. Pete's or Moscow in terms of quality of life) was really satisfied with everything he had 'off-ice' so it's not the problem anymore.

At 11:07 a.m., July 23, 2008, Anonymous Anonymous said...

In the Filatov case the bottom line is can you enforce a contract that has not been signed?

Filatov claims that they came to him back in April and offered him "big money", $50,000 a month salary to sign that contract and he refused to sign it.


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