RSL budget

Discussion in 'The Business of Hockey' started by Habsaku, Sep 6, 2005.

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  1. Habsaku

    Habsaku Registered User

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    Anyone has the payrolls for Russian clubs? I'm interested in knowing if they can actually compete money wise with the NHL.
     
  2. wilka91*

    wilka91* Registered User

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    Well the problem is that there is no real "system" there. If a team spends several million dollars, it means the club is losing money, and a lot of it. But when you team's owner is billionaire Roman Abramovich, who really cares how much you spend on a player. But I don't really know what the budgets are, except that there are hUUUUUUUUUUUUge gaps between the top teams like Avangard, Magnitogorsk, Kazan and teams from the bottom of the standings. There are no salary caps, no CBA, no players association ...
     
  3. GSC2k2*

    GSC2k2* Guest

    Based on "reports" (which everyone around here is only too happy to accept at face value), everyone's payroll is eleventeen billion million shmillion floopillion shmshsmshsmsillion dollars (US).
     
  4. Captain Ron

    Captain Ron Registered User

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    Wow that's alot. I am surprised more guys are not signing in Russia. :)
     
  5. wilka91*

    wilka91* Registered User

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    oh come on, who would wanna live there? :shakehead
     
  6. GSC2k2*

    GSC2k2* Guest

    Oh, it's coming, it's coming. I just heard Avandsgard just signed the Coca-Cola polar bear to a sixty year deal at $350 million per year to play right wing for them. Yeah, it's a lot, but hey - Abramovich is a BILLIONAIRE!!!!!!!!!
     
  7. Captain Ron

    Captain Ron Registered User

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    Yeah I heard that the Coca-Cola polar bear is huge and has a wicked slapshot. But I have also heard he doesn't play defense. :shakehead
     
  8. Hockeystatic

    Hockeystatic Registered User

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    The problem the RSL faces is their revenues aren't even close to the NHL revenues. Their payroll can be inflated and paid by rich people on the short term but it's not something that can happen on the long term.
     
  9. SoundsGood

    SoundsGood Registered User

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    Maybe but still... you don't want get caught your head down when he is comming in for a big hit.
    *wonders if he would sign for 500k of coca cola.*
     
  10. Captain Ron

    Captain Ron Registered User

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    You kind of reminded me of a funny scenario that my dad and I came up with years ago. When our teams goaltending was especially bad we would say they should hire "Hugh Mungus". A 1,000 pound man who is so big that he takes up the entire net. He doesn't even have to move to make the save. :)
     
  11. Den

    Den Registered User

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    According to Bettman/Velichkin the "budgets" are between 14 and 45 mil. I can only guess the payrol should be about 2/3 of this. Factor in a much lower tax.
     
  12. Den

    Den Registered User

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    Why? If that's the policy of a country to subsidise sports heavily while it attempts to build a system, why would it stop suddenly?

    Most teams in Russia are sponsored by rich companies and not by individual rich billionaires. Most of those companies have enormous regional interests and involvement: Tataneft ( practically identical to Tatarstan's administration), Sibneft, Cherepovec or Magnitogorsk steelworks. So the money flow will stop either if there is a total collapse of the Russian economy or if the policy of the country changes as a whole, and not if Abramovitch decided to cut oxygen. In fact he can't since he isn't even the largest shareholder in Sibneft.

    The money in Russian hockey is probably not much more than the money in the US swimming program which brings in 0 revenue and nobody sees a problem with that...
     
  13. Hockeystatic

    Hockeystatic Registered User

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    Most sports team in North America used to be sponsored by rich companies as well. The problem is that over time (I'm not saying tomorrow, it could be 20 years), there will be better investment opportunities for those companies. In a capitalist system, this means that the investors get a better rate of return by investing elsewhere, and this motivates their investment decisions. Sooner or later, there will be changes that happen and the investors will want to see money back from their investment, and if the spendings exceeed the revenues, then the league could crash.
     
  14. dbbourn

    dbbourn Registered User

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    Too bad it would be tough to get some pads on good old Hugh Mungus... within the new regulations of course. Regardless, my ideal goalie is 4 feet tall and 6 feet wide.
     
  15. TORRUS

    TORRUS Registered User

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    Andrei Medvedev...
     
  16. Den

    Den Registered User

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    Yeah, yeah... But Russia is far from a normal functioning capitalist economy. In modern Russia the best way to "invest" is to merge with authorities. The crucial thing to understand here is that hockey in Russia is a social project and not a business.

    Illustration #1. Ak Bars. Tatneft is a huge oil producer that is mostly government owned. Its manegement are all loyal to the local authorities while the republic of Tatarstan basically lives off Tatneft. Social development of Tatarstan is one of oficcial goals of Tatneft. Shall Tatneft abandon their social projects (and Ak Bars is just one of them - this year Tatneft donated probably 50 times that of Ak Bars payroll into various construction projects in the rebuplic) the current Tatarstan authorities will lose the next election, the Tatneft manegment gets fired, and who wants this? So Tatneft builds a new 12000 seater for Ak Bars, basically rebuilds Kazan for its 1000 anniversary, participates in the subway in Kazan and so on.

    Illustration #2: Metallurg. The team is the favorite baby of the Metallurg Steelworks. Here it is not about investment at all. You can just put a thick equality sign between Metallurg Steelworks prestige and Metallurg hockey club, or between the Steelworks and the club for that matter. The best equivalent would be a football team at an American university. They took care of the team when the times where bad and when the times are good. It their face, and unless the Ural mountains crumble down, or the Steelworks itself, the cash will be flowing.

    Illustration #3. Avangard. Sibneft is to Omsk what Tatneft is to Kazan. The big difference is that Sibneft is a mostly private company with several shareholders (Abramovich is just one of them). However, if you, as a private company, want to be secure in modern Russia (to get contracts, tax breaks, or to avoid an arbitrary break up as Yukos) you gotta give. So, consider its sponsorship of Avangard as one of its several insurance payments.

    These are fundumental reasons that will keep cash flowing into sports as long as Russia is what it is now. May be Russia will change one day, but that's a different story....
     
  17. SJeasy

    SJeasy Registered User

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    Den,

    Thank you for the explanation of the socioeconomic system of Russia and the sentiments behind it. For North Americans, it can be hard to understand.

    It is different. The common sense behind it is that if the public is seriously disenchanted with the system, the public will change it. It is working for Russia and I commend the Russians for having developed so far from what went before. The difference here seems to be marketing and the value we place on it. The other difference is that of necessity, the public mindedness of business oligarchies far outweighs similar sentiments of our own multinationals.
     
  18. Habsaku

    Habsaku Registered User

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    If the payrolls really are between 14 and 45 million, why are there any Russians in the NHL, especially if 3-4 million is 6 million as people keep saying. Those payrolls would make the RSL a richer league then the NHL with its 39M cap.
     
  19. SuperUnknown

    SuperUnknown Registered User

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    There was a thread during the lockout where payrolls and revenues in the RSL were discussed. If my memory serves well, most payrolls were under $10M (US$) in the RSL, with Kazan having the highest payroll at about $30M (US$).

    Revenues for all teams weren't stellar either, with a majority of teams getting less than $10M in revenues.
     
  20. Flukeshot

    Flukeshot Hextall Activate!

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    $14m to $45m is not the payroll, rather Den quotes it as being the budget. Which means that the actual team payrolls are likely between just less than $10m and just over $30m. You have to place operating costs into those budgets.

    So the reason that more Russians (and other players as well) don't stay in Russia more often is because there really are only 3-4 teams (Russian posters please correct me if I'm wrong) that actually can have payrolls up to and over $30m. I doubt that many teams actually go for that number. Instead opting to pay one or two players big money.

    I'd be interested to know what players have the highest contracts in the RSL.
     
  21. Den

    Den Registered User

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    Lokomotiv, Dynamo, Avangard, Ak Bars, Khimik, Lada and Metallurg M probably have comparable budgets. Boris Mikhailov recently called them a "Super-league" within the Superleague. CSKA, HK MVD, Neftekhimik, Salavat and Metallurg NK aren'r poor either, but not as rich as the Super 7. It looks like Vitjaz will be getting more money and so will SKA. Spartak and Molot seem to struggle all the time.

    Again I don't know how much out of this reported 14-45 mil is the payroll. It looks like RSL will be able to compete with the NHL for average players, krafts, nikolishins, tverdovskys and rachuneks, but I don't see a serious competition for the superstars in the several coming years.

    It is believed that Sushinsky is on the highest contract, but it's likely that Datsyuk will take over.
     
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