KHL business aspects discussion

[Acallabeth]

Lokomotiv will invest the funds gained from selling Gavrikov into HD broadcasting equipment, looking to increase the TV demand.

 

[Rigafan]

I don't really read Russian so I would like to ask.

Do we know any new news on Soviet Wings? Krylya Soveto

I remember, it must be 3 years or maybe 4 back. They owner? started complaining that he was told the soviet wings would be saved because they are a special team, there would be money and they would come to the KHL. But he said nothing is happening... obviously nothing still is I assume?

 

[SoundAndFury]

Nothing. And I don't think anybody's interested in another Moscow team.

 

[Acallabeth]

Lukas Kaspar confirms that Dynamo owes him 2-month payment and bonuses. Obviously we need more historic teams like that in the KHL.

 

[Rigafan]

Nothing. And I don't think anybody's interested in another Moscow team.

I thought that might be the case

 

[vorky]

KHL Vice-President Alexey Krasnov will attend European Hockey Business Forum (Nov 11) in Sweden. Bill Daly will be there as well. Krasnov will talk about KHL´s new strategy, new hockey markets etc. So nothing new for KHL fans, but very interesting information for European club hockey officials.

 

[vorky]

If that is not publicly known, is there any speculation about it or do you have an educated guess, how much it could be? I remember reading an article, some years ago, that on that year SKA (for example) got less than 200.000€ in tv-money. So how much could it be today?

In Finland financial statements are public and because of that, finnish journalist found out, how much the tv-deal of Liiga was worth. Do we have swedish users here? And are viasats financial statements public in Sweden and if, can it be found out, how much they paid for the KHL tv-rights?

I will reply you here, because previous discussion started at expansion thread.

I can sum up all official statements of the league regarding TV revenue sharing model.

Sergey Dobrokhvalov, KHL VP for marketing, said in January 2016 (before Kunlun Red Star joined): "Chinese broadcasters are willing to pay several millions USD. It will not double our TV deals, but it will be significant increase." I guess he was talking about one season´s income from China. From following statements we know that Chinese TV deal brings more and more money every following season. I do not know what is a lenght of the Chinese deal.

KHL did not share revenues with clubs during Medvedev era. Chernyshenko introduced a revenue sharing model, but ONLY TV money are shared, not income from league´s sponsors.

KHL revenue sharing model works as follows

KHL shared 114 million Rubles for 14/15 season, 243 million for 15/16 and planned at least 240 million for last season (financial results of the season are not done yet).

League´s income for last season (planned)
- 49% from sponsorhip deals
- 28% from TV deals
- 13% from KHL TV channels
- 5% from teams as participating fee and fines (luxury tax not counted)
- 5% other commercial revenues (like merchendising & gamecenter etc)

League´s costs for last season (planned)
- 37% for running KHL, MHL, Women league
- 16% for operational costs
- 11% for payments to clubs
- 18% for costs to secure TV deals (making TV signal to Russia & abroad)
- 18% for costs to secure sponsorship deals (ads on boards etc), special projects and campaigns

KHL earns some money from TV deals, this money are used to secure TV deals (so make a TV signal, very expensive) and 80% of the rest of the money are paid to clubs via revenue sharing model, 20% are keeped by the league.

Total revenues of ALL clubs for last season were as follows: 50 billion Rubles (26 billion from state companies & municipalities, 17 billion from private companies, 7 billion as commercial revenues of clubs)

Total costs of ALL clubs for last season were as follows: 52 billion Rubles (29 billion for travelling, front office etc, 23 billion for players salaries)

I hope I helped you a bit.

 

[Toro2017]

I hope I helped you a bit.

Yes. This certainly gives a bigger picture of it all. But when you write, that KHL planned to share at least 240 million rubles last year, does that sum also include all the tv-money (viasat among others)? Because in all it would make some 3,5 milion euros for then 29 clubs, right? So in average clubs received about 120.000 euros from KHL last year? If China brings millions more, this year (but will not double the revenue). Can we assume, that money shared by KHL to the clubs can (in maximum) rise to somewhere around 6 million euros? That divided by 27 clubs would give each in average some 220.000 euros, from the league this year?

 

[vorky]

Yes. This certainly gives a bigger picture of it all. But when you write, that KHL planned to share at least 240 million rubles last year, does that sum also include all the tv-money (viasat among others)? Because in all it would make some 3,5 milion euros for then 29 clubs, right? So in average clubs received about 120.000 euros from KHL last year? If China brings millions more, this year (but will not double the revenue). Can we assume, that money shared by KHL to the clubs can (in maximum) rise to somewhere around 6 million euros? That divided by 27 clubs would give each in average some 220.000 euros, from the league this year?

I can not say if you are right or not.

If I understand it, 15/16 season did not include Chinese deal, because Kunlun was not in the league at the time. Yes, Gagarin Cup Final 2016 was broadcasted in China, if I remember, but the deal was rather small, just testing of the market.

Seasons 14/15 to 16/17 were crisis years. No significant increase of TV revenues.

Starting with 17/18 we can expect some increase (new Viasat deal, new Viasat Baltic deal, new TV deal in Central Europe - it is a result of a new policy of the Lagardere).

 

[Rigafan]

League clubs to share $6m windfall

http://en.khl.ru/news/2017/09/15/359080.html

The KHL began the distribution scheme in the 2014-15 season, deciding that the proceeds obtained from the sale of television rights should be shared among the member clubs. At the end of the 2016-17 season, the clubs participating in the KHL Championship will receive approximately 252m rubles (around $4.38m, and subject to Russian Sales Tax), a figure 10% higher than projected.

For the 2014-15 season, the windfall for the clubs totaled 114m rubles ($2m), rising to 243m rubles ($4.22m) for the 2015-16 season, showing an increase for the third consecutive season. This is the result of the League's having sealed a new agreement for the sale of international TV rights, in addition to having optimized costs in TV production and broadcasting.

Income is distributed among the clubs according to three criteria. Participation in the Championship (40% of the total), by which each club receives 3m rubles; TV demand (30% of the total), from which clubs will receive between 538,000 rubles ($9,350) and 8.3m rubles ($144,000); sporting performance (30% of the total), based on the on-ice success of the team during the 2016-17 KHL regular season and playoffs. These funds are allocated thus:

- 15% - to be shared equally between all clubs participating in playoffs (2m rubles);
- 4,5% - to the winner of the regular championship (10m rubles);
- 3% - to the team finishing second in the playoffs (6.6m rubles);

 

[vorky]

A trend is good, 114m, 243m & 352m rubles. If my math is correct, it is 300% increase for last 3 seasons. Take into consideration that the league will have 24 teams instead of 27(29). So same (at least) money for less clubs.

It is interesting to compare the KHL & the CHL.

The KHL shared above $6m last season, worst team got $104k and the best $700k. To compare it with the CHL, 4 KHL teams (lets add Avto to the list, who is a bit above the sum) got less than 100k EUR ($119k). These four teams were Novokuznetsk, Yugra, Severstal & Lada + Avtomobilist. Novokuznetsk is not in the KHL anymore, and lets hope Yugra, Severstal & Lada will follow them.

The CHL shared 1,5m EUR ($1,7m) last season, it is 0% increase for last 3 seasons. The worst team got 9k EUR, but lets not count Yunost, Kosice & Nitra here. If no those 3, then lowest prize money was 20k EUR ($24k) - 9 teams. The champion earned 143k EUR ($171k) and runner up 103k EUR ($123k). Only these two teams got more than 100k EUR ($119k), another 6 got 50k EUR ($59k) and more.

The CHL plans to increase total prize money to 3,5m EUR ($4,2m) by 2022, it is 230% (planned) increase for last 8 years. The champion will get 720k EUR ($860k) by 2022.

Just facts.

 

[Rigafan]

A trend is good, 114m, 243m & 352m rubles. If my math is correct, it is 300% increase for last 3 seasons. Take into consideration that the league will have 24 teams instead of 27(29). So same (at least) money for less clubs.

It is interesting to compare the KHL & the CHL.

The KHL shared above $6m last season, worst team got $104k and the best $700k. To compare it with the CHL, 4 KHL teams (lets add Avto to the list, who is a bit above the sum) got less than 100k EUR ($119k). These four teams were Novokuznetsk, Yugra, Severstal & Lada + Avtomobilist. Novokuznetsk is not in the KHL anymore, and lets hope Yugra, Severstal & Lada will follow them.

The CHL shared 1,5m EUR ($1,7m) last season, it is 0% increase for last 3 seasons. The worst team got 9k EUR, but lets not count Yunost, Kosice & Nitra here. If no those 3, then lowest prize money was 20k EUR ($24k) - 9 teams. The champion earned 143k EUR ($171k) and runner up 103k EUR ($123k). Only these two teams got more than 100k EUR ($119k), another 6 got 50k EUR ($59k) and more.

The CHL plans to increase total prize money to 3,5m EUR ($4,2m) by 2022, it is 230% (planned) increase for last 8 years. The champion will get 720k EUR ($860k) by 2022.

Just facts.

and following on from news yesterday we have:

Chernyshenko Our main product is the game, on TV and in the Stadiums

http://en.khl.ru/news/2017/09/16/359156.html

“The main news story of the day is our decision to approve the profit-share payments to the clubs. The accepted sum is 352m rubles (over $6m), but the two departed clubs have outstanding debts with the League. In their case, we will be withholding payment, giving us a revised amount of 331m rubles ($5.74m). In the first season of the scheme we paid the clubs 114m ($2m), then it was 243m rubles ($4.22m), and it has now surpassed 350m. I would love us to keep this momentum. Our main source of funds is the sale of TV rights, so our main focus is on raising the quality of the League's main product. To achieve this, we need the players to perform well, we need to attract fans to the arenas, and we need the stadium lighting to meet the standards demanded by broadcasters. We are influencing these factors in various ways, not least via our income redistribution scheme. The aim of the KHL is to aid the development of hockey, not to enrich shareholders, and that is why we distribute these funds among the clubs.â€ÂÂ

“In addition, the Board of Directors decided that out of the aforementioned 331m rubles we would distribute 100m ($1.73m) according to attendance at home matches. By doing this, we encourage our clubs to increase the capacity and the occupancy of the arenas. Speaking of attendance, the first week's figures were encouraging – nearly 260,000 for 39 games - but then there was a decline. We will not be indifferent toward clubs whose attendances are dropping, and we will work closely with them to ensure hockey remains competitive in the presence of many alternative leisure activities.â€ÂÂ

“Another important point: Metallurg Novokuznetsk will spend this season playing in the VHL, but as a member of the 2016-17 KHL Championship the club will also get its allocation of funds from the profit-share and TV rights. The Board of Directors has recommended that these funds be used by the club in nurturing young players. At the previous meeting of the Board it was decided that clubs which had failed to pay their debts to players and coaches by the 1st of July would be fined a sum equivalent to 20% of that outstanding debt. Previously in the League we witnessed the unacceptable phenomenon of clubs carrying over debts into a new season, and typically, a total of one-and-a-half billion rubles ($26m) of debt passed from year to year. Yet we began this Championship almost debt-free, thanks to our timely intervention. Today, the Board of Directors decided to amend the Regulations so that any club which was late by two or more months in paying wages to its players or coaches would be fined. At the moment, only Slovan is experiencing problems, owing around 30m rubles (approx. $520,000), but the club has submitted a written guarantee that it will pay its debts on or before the 30th of September.â€ÂÂ

“Another important point: Metallurg Novokuznetsk will spend this season playing in the VHL, but as a member of the 2016-17 KHL Championship the club will also get its allocation of funds from the profit-share and TV rights. The Board of Directors has recommended that these funds be used by the club in nurturing young players. At the previous meeting of the Board it was decided that clubs which had failed to pay their debts to players and coaches by the 1st of July would be fined a sum equivalent to 20% of that outstanding debt. Previously in the League we witnessed the unacceptable phenomenon of clubs carrying over debts into a new season, and typically, a total of one-and-a-half billion rubles ($26m) of debt passed from year to year. Yet we began this Championship almost debt-free, thanks to our timely intervention. Today, the Board of Directors decided to amend the Regulations so that any club which was late by two or more months in paying wages to its players or coaches would be fined. At the moment, only Slovan is experiencing problems, owing around 30m rubles (approx. $520,000), but the club has submitted a written guarantee that it will pay its debts on or before the 30th of eptember.â€ÂÂ

These some of the main points but quite a lot on the article.

 

[Jussi]

A trend is good, 114m, 243m & 352m rubles. If my math is correct, it is 300% increase for last 3 seasons. Take into consideration that the league will have 24 teams instead of 27(29). So same (at least) money for less clubs.

It is interesting to compare the KHL & the CHL.

The KHL shared above $6m last season, worst team got $104k and the best $700k. To compare it with the CHL, 4 KHL teams (lets add Avto to the list, who is a bit above the sum) got less than 100k EUR ($119k). These four teams were Novokuznetsk, Yugra, Severstal & Lada + Avtomobilist. Novokuznetsk is not in the KHL anymore, and lets hope Yugra, Severstal & Lada will follow them.

The CHL shared 1,5m EUR ($1,7m) last season, it is 0% increase for last 3 seasons. The worst team got 9k EUR, but lets not count Yunost, Kosice & Nitra here. If no those 3, then lowest prize money was 20k EUR ($24k) - 9 teams. The champion earned 143k EUR ($171k) and runner up 103k EUR ($123k). Only these two teams got more than 100k EUR ($119k), another 6 got 50k EUR ($59k) and more.

The CHL plans to increase total prize money to 3,5m EUR ($4,2m) by 2022, it is 230% (planned) increase for last 8 years. The champion will get 720k EUR ($860k) by 2022.

Just facts.

It is completely useless. One is a league, the other a tournament. It's the equivalent of comparing the NHL and World Championships.

 

[vorky]

It is completely useless. One is a league, the other a tournament. It's the equivalent of comparing the NHL and World Chmapionships.

Lets look what they say ...

If they are or want to be "Europe´s greatest ice hockey competition", then they have to proof it in financial department as well. Or avoid such statements ...

 

[Jussi]

Lets look what they say ...

If they are or want to be "Europe´s greatest ice hockey competition", then they have to proof it in financial department as well. Or avoid such statements ...

Competition = tournament. Do you have trouble with reading comprehension? UCL wasn't the financial juggernaut is it now immediately either.These things take time.

 

[vorky]

Competition = tournament. Do you have trouble with reading comprehension? UCL wasn't the financial juggernaut is it now immediately either.These things take time.

Everyone with a little knowledge of hockey knows what they mean by "Europen´s greatest ice hockey competition" For you, to understand it, it means that the CHL is or wants to be the better product (on ice, financially, prestige, etc) than all national hockey leagues in Europe, including the KHL.

Your comparison with UCL & CHL - this to happen you need a) better players in the CHL than in all European leagues. No problem if SHL clubs play the CHL, they use the same players. The problem is that the KHL, who has the best players in Europe, is not in the CHL b) you need to invest to the product, which European clubs or the CHL will not do, because they do not have money

Money will not come if you will not do both, a) and b), things. It is only your dream or propaganda from you.

 

[SoundAndFury]

Well KHL has little to do with Europe nowadays really.

 

[Rigafan]

Well KHL has little to do with Europe nowadays really.

Other than it being Europe's, current, biggest and richest league?

 

[Jonimaus]

Other than it being Europe's, current, biggest and richest league?

When teams seem to fold or leave due to money issues more or less every year, and a ton of teams only stay afloat due to "donations", is it really the richest? If so, I really hope the SHL never gets that "rich".

 

[Rigafan]

When teams seem to fold or leave due to money issues more or less every year, and a ton of teams only stay afloat due to "donations", is it really the richest? If so, I really hope the SHL never gets that "rich".

True maybe its not the richest in the most traditional sense, but nobody else has the money the Russians do to fund their teams without relying on sponsors - as honest as it is or not.

 

[SoundAndFury]

Other than it being Europe's, current, biggest and richest league?

..which has 1 European impact team based outside of Russia.

 

[Jussi]

Everyone with a little knowledge of hockey knows what they mean by "Europen´s greatest ice hockey competition" For you, to understand it, it means that the CHL is or wants to be the better product (on ice, financially, prestige, etc) than all national hockey leagues in Europe, including the KHL.

Your comparison with UCL & CHL - this to happen you need a) better players in the CHL than in all European leagues. No problem if SHL clubs play the CHL, they use the same players. The problem is that the KHL, who has the best players in Europe, is not in the CHL b) you need to invest to the product, which European clubs or the CHL will not do, because they do not have money

Money will not come if you will not do both, a) and b), things. It is only your dream or propaganda from you.

No, it doesn't It means they want to be the best Competition/tournament for European clubs. You really should stop putting words into other people's mouth or try to speak on behalf of them. You're already guilty of the former on numerous occasions by accusing people of being something without providing any evidence to back it up.

European clubs invest into the CHL as much as they can because they expect somethin in return for their investment. Because that's the whole point of investing, getting something (ie. profit) in return. And we all know Russians are not getting any of that with their investment on KHL.

 

[vorky]

No, it doesn't It means they want to be the best Competition/tournament for European clubs. You really should stop putting words into other people's mouth or try to speak on behalf of them. You're already guilty of the former on numerous occasions by accusing people of being something without providing any evidence to back it up.

European clubs invest into the CHL as much as they can because they expect somethin in return for their investment. Because that's the whole point of investing, getting something (ie. profit) in return. And we all know Russians are not getting any of that with their investment on KHL.

Name items the CHL or their clubs have invested in.

 

[Jussi]

Name items the CHL or their clubs have invested in.

Look up "founding members".

 

[vorky]

Look up "founding members".

How has the fund been used? How does it develop club´s infrastructure, TV coverage, marketing, etc? Can not wait for a reply. To give you an example, money from TV revenues which are distributed to the KHL teams, have to be used for items like infrastructure, marketing, TV coverage etc. Plus the KHL teams are obligated to develop all this items season by season. Is the same happening in the CHL?