Can KHL ever become profitable?Does the league even want to become profitable?

[Vicente]

Just look at the current season:

New teams Lev Prague and Slovan Bratislava alreay developed a real rivalry with great derbies. The two cities have a long rivalry that goes back to old Czchoslovak times => perfect idea by KHL.

Then off course a lot new fans were found in Czech Republic and Slovakia. The same goes for Ukraine with Donbass Donetsk.

With futher expansion more fans will be won.

 

[vorky]

Whatever form the discussion takes, and whatever the sources of revenue, its safe to say that most KHL franchises can sustain the current level of losses for a long time. It was always anticipated that those franchises that lacked the financial wherewithal might drop out somewhere down the road, but if the basic core is strong, the goal of creating a top-flight league will be sustained well into the future. Financial solvency is based on a combination of factors that go beyond mere gate receipts. There is television money, which is a huge part of the equation, and merchandizing, among others.

One of the biggest indicators of success for professional sports franchises is television viewing audience ratings. What KHL owners will look at, 8-10 years down the road, is whether the league has caught on with the public. Do viewer ratings suggest that a continously growing segment of the public is watching KHL games? Are there indications of growing rivalries based on city/regional affiliation? Are there "stars" emerging who have become fan favorities with a broad segment of traditional sports viewing? If the answers to those questions is no, then investment in the KHL will likely drop off, and the league may be in jeopardy. On the other hand, if the answer is yes in all or most cases, then investment will certainly increase, and outside sponsors will want to get in on the action.

I can agree.

I dont remember who said it, but it was someone from KHL´s HQ. When KHL started it was said that main goal of revenue is TV deals. Not money from tickets.

Why did KHL launch own tv channel? I would say to be able to produce more games live, in highest quality. Therefore we can see investments into TV equipment. That is a reason why Game center at league´s website is crappy comparing to NHL.

MONEY FROM (+ AUDIENCE)
TV deals >>>> internet streams on league´s site

Why does KHL try to conquer asian tv market? I would say to increase money from tv deals.

Why does KHL try to sell its products to US/CAN based broadcasters? NHL is no.1 here and always will be (in hockey). To get more money from tv deals, even not become no.1 in NA market.

If KHL signs more tv deals worldwide, it can lure more sponsors from all the globe (mainly from Asia). The big different among NHL and KHL is strategy. NHL gives all marketing and tv rights to club to sell them. Right? KHL is another story, league holds all tv rights (and revenue), around 70% of ads place in boards/ice. Club can market only its brand (therefore we see club´s beer etc). IMO it was good strategy in the beggining because leageu was better product that sole club. Lets say Sibir had no chance to get any tv/sponsorship money in 2008/9.. not attractive club. Now, after a few years it is possible for this club to aquire sponsorship/tv money. On the other hand, when does Sibir etc get more money? If league sell tv/sponsorship deals (and then share money) or a club? Yes, SKA would have no problem to sign a deal with big foreign companies. but what about small clubs? I believe that KHL will share revenue from tv and sponsor deals in near future. Go back to soccer example. If KHL got 1 billion USD from sponsorship/tv deals and share it with clubs, would it be enough? How much money does NHL share?

Yes, new arenas are under constrction, which is good. But I dont think that we will see increasing of tickets in near future (russian clubs). There are another more important source of money for KHL/clubs.

 

[Vicente]

Money from tv deals should be shared among all teams. Is that the case already? And whicht team gets what percentage?

If every team makes their own tv deal we have the same situation like in Spain soon where Real Madrid gained 1.5 bio for 10 years while teams like Getafe or Rayo Vallecano get 1% of this money...

 

[vorky]

Money from tv deals should be shared among all teams. Is that the case already? And whicht team gets what percentage?

If every team makes their own tv deal we have the same situation like in Spain soon where Real Madrid gained 1.5 bio for 10 years while teams like Getafe or Rayo Vallecano get 1% of this money...

KHL gets all money from tv deals/sponsorship (Megafon, Chevrolet, BP etc)

Club wants league to share it, discussion took place in december as I know. Maybe a few weeks ago as well. We will see next season, if something changes

 

[SoundAndFury]

NHL gives all marketing and tv rights to club to sell them. Right? <...> How much money does NHL share?

1. Wrong.
2. This season it's 300 millions and it depends on the size of HRR.

 

[Rumcajs]

Tough call For example, my team the Ottawa Senators needs to make the 2nd round of the playoffs to make a profit!

Also, a fanbase is needed. Just now 20 years after the creation of the Ottawa Senators a new generation of fans are around including myself.

 

[Yakushev72]

1. Wrong.
2. This season it's 300 millions and it depends on the size of HRR.

In the NHL, there are two kinds of television contracts: (1) Network contracts, that are broadcast nationally in Canada and the US, and negotiated by the league, the proceeds of which are distributed to all teams in the league through a revenue sharing arrangement; and (2) local TV contracts, negotiated by individual NHL clubs to be broadcast in local TV markets. If it were only network TV contracts, then some NHL franchises would almost never have their games televised for their fans to watch. In some NHL markets, the local TV contracts generate almost no revenue (advertisers are reluctant to sponsor games because of low viewer ratings), so most NHL teams are highly dependent on network contracts for money.

 

[airbus1094]

If the KHL expands more into Europe, then European networks will pay big money to broadcast KHL games. The Russian government will continue to finance clubs for at least the next 5 to 10 years (the same applies to KAZ, BLR, UKR). Until bigger stadiums are build, ticket prices go up, sponsorship go up and more broadcasting rights are sold, the teams in the KHL will not be profitable. This will take at least 10 years, probably more, but looking at the progress over the past 5 years, things look optimistic. (Note: The KHL itself has made money over the past several years, it is the clubs that are in red).

 

[vorky]

If the KHL expands more into Europe, then European networks will pay big money to broadcast KHL games. The Russian government will continue to finance clubs for at least the next 5 to 10 years (the same applies to KAZ, BLR, UKR). Until bigger stadiums are build, ticket prices go up, sponsorship go up and more broadcasting rights are sold, the teams in the KHL will not be profitable. This will take at least 10 years, probably more, but looking at the progress over the past 5 years, things look optimistic. (Note: The KHL itself has made money over the past several years, it is the clubs that are in red).

I am watching this is your 1st post here. I have only one word - GREAT!

I underline all you wrote.

 

[Vicente]

See it like this. 5 years ago KHL started to be the successor of Russian superleague, an all-Russian league with little attention elsewhere.

Now KHL has teams in 7 countries, that means six new markets. They were able to increase the number of teams from 24 to 26. Though some teams had financial problems at the start, most were able to have rosters at a very high level and to offer a good product. Marketing has improved significantly, not only by the league as a trademarke but also by several teams like SKA St. Petersburg.

Many teams have new stadiums while others who have old ones want to build new stadiums in the near future.

Real traditional matches have developed in KHL between several teams. The league has gained many more viewers and lots of respect even by NHL fans when many stars came to play here during the lockout and made positive comments about their experience here.

TV deals seem to have improved. At least KHL matches are now also available in countries like Germany and Austria who not even have a taem in the league. We don't even have NHL shown in German TV.

KHL-VHL-MHL/MHL B system has been introduced and improved by every season. There are also new stadiums, better marketing and trademarks.

All this in the future should lead to a situation where KHL/VHL/MHL can become profitable.

 

[airbus1094]

I was just looking at the attendance stats of other european competitions and they too have fairly low attendance (Swiss League average 6614, Germany average 6028, Sweden average 5751). How so those clubs make money? are their payrolls that much less than in the KHL?

 

[SoundAndFury]

I was just looking at the attendance stats of other european competitions and they too have fairly low attendance (Swiss League average 6614, Germany average 6028, Sweden average 5751). How so those clubs make money? are their payrolls that much less than in the KHL?

What do you mean by THAT much less? KHL's average attendance is not THAT much bigger. Obviously SKA's payroll is ~20 times bigger than most of these clubs in other leagues but it's 20 times bigger than Kuznya's so at the end your question kinda doesn't make sense because averages are not telling much in this case.

 

[airbus1094]

What do you mean by THAT much less? KHL's average attendance is not THAT much bigger. Obviously SKA's payroll is ~20 times bigger than most of these clubs in other leagues but it's 20 times bigger than Kuznya's so at the end your question kinda doesn't make sense because averages are not telling much in this case.

First of all I never said anything about the KHL having bigger attendance, please read what I wrote. More specifically whats the difference in payroll between say Riga and Redhawks, they have about the same attendance numbers.

 

[vorky]

I just found this infos about attendance,I think it belongs here.

 

[Vicente]

I can only speak for DEL but here tickets average price are around 20-30 euro.

For Cologne that means 10,000 x 25 x ca. 30 games = 7.5 mio. Euro through tickets. But then you have costs like arena rent and you have to pay for the arena staff. But it should be a lot more than most KHL earn through tickets.

And yes salaries in DEL and other European leagues are maybe 10% of KHL salary.

 

[Yakushev72]

See it like this. 5 years ago KHL started to be the successor of Russian superleague, an all-Russian league with little attention elsewhere.

Now KHL has teams in 7 countries, that means six new markets. They were able to increase the number of teams from 24 to 26. Though some teams had financial problems at the start, most were able to have rosters at a very high level and to offer a good product. Marketing has improved significantly, not only by the league as a trademarke but also by several teams like SKA St. Petersburg.

Many teams have new stadiums while others who have old ones want to build new stadiums in the near future.

Real traditional matches have developed in KHL between several teams. The league has gained many more viewers and lots of respect even by NHL fans when many stars came to play here during the lockout and made positive comments about their experience here.

TV deals seem to have improved. At least KHL matches are now also available in countries like Germany and Austria who not even have a taem in the league. We don't even have NHL shown in German TV.

KHL-VHL-MHL/MHL B system has been introduced and improved by every season. There are also new stadiums, better marketing and trademarks.

All this in the future should lead to a situation where KHL/VHL/MHL can become profitable.

Excellent analysis and chronology! At times progress seems slow, but when you look at it from the perspective you laid out, there has been a lot more progress than appears on the surface. IMO, the most important objective is for fans to go modern arenas and have a lot of fun with their buddies and/or their families. Having a fun experience will do more than anything else to cement the gains of the KHL.

 

[Jussi]

If the KHL expands more into Europe, then European networks will pay big money to broadcast KHL games. The Russian government will continue to finance clubs for at least the next 5 to 10 years (the same applies to KAZ, BLR, UKR). Until bigger stadiums are build, ticket prices go up, sponsorship go up and more broadcasting rights are sold, the teams in the KHL will not be profitable. This will take at least 10 years, probably more, but looking at the progress over the past 5 years, things look optimistic. (Note: The KHL itself has made money over the past several years, it is the clubs that are in red).

European networks only care about football, not hockey.

 

[BalticWarrior]

European networks only care about football, not hockey.

Jussi how come i always see your posts on KHL boards it`s always negativity or an obvious dislike for KHL?

 

[Vicente]

European networks only care about football, not hockey.

Not sure what you're talking about. That might be the case in Finland if you experience it there.

In Germany and Austria a lot of money is paid also for basketball, handball and ice hockey games. We have sports channels Eurosport and Sport 1 who compete for games aswell as ARD and ZDF. There are also Austrian-based channels Servus TV and laola1.tv (internet channel) who are available in Germany aswell.

Other popular sports regularly shown in TV are american football, volleyball, winter sports, tennis, motor sports etc etc

 

[Jussi]

Not sure what you're talking about. That might be the case in Finland if you experience it there.

In Germany and Austria a lot of money is paid also for basketball, handball and ice hockey games. We have sports channels Eurosport and Sport 1 who compete for games aswell as ARD and ZDF. There are also Austrian-based channels Servus TV and laola1.tv (internet channel) who are available in Germany aswell.

Other popular sports regularly shown in TV are american football, volleyball, winter sports, tennis, motor sports etc etc

Other German posters here have previously said (while discussing NHL rights in Germany) that the DEL tv deal isn't worth much, and the ratings pale in comparison to of course football but basketball, handball and biathlon. So I don't see them paying much for sports as "miniscule" as hockey is in public interest. Especially with Germany missing out on Olympics. Eurosport's coverage seems to be somewhat regional, they air stuff on some regions that others don't get. It hasn't been on public free cable here for over half a decade now but based on what I've read from people, they still air mostly ****** sports because they don't have the money for the big sports. I've read they've aired some WJC games but not necessarily live and the last time I saw men's World on that network was in 1997. So I don't see them paying big money for anything.

 

[Jussi]

Jussi how come i always see your posts on KHL boards it`s always negativity or an obvious dislike for KHL?

Some call it negativity, others realism. Far too many views here (or the board in general ) are not based on realism.

 

[Vicente]

Other German posters here have previously said (while discussing NHL rights in Germany) that the DEL tv deal isn't worth much, and the ratings pale in comparison to of course football but basketball, handball and biathlon. So I don't see them paying much for sports as "miniscule" as hockey is in public interest. Especially with Germany missing out on Olympics. Eurosport's coverage seems to be somewhat regional, they air stuff on some regions that others don't get. It hasn't been on public free cable here for over half a decade now but based on what I've read from people, they still air mostly ****** sports because they don't have the money for the big sports. I've read they've aired some WJC games but not necessarily live and the last time I saw men's World on that network was in 1997. So I don't see them paying big money for anything.

I didn't say there would be any BIG money involved like in football where the league gets half a billion a year but yes if there would be 1-4 German teams in KHL then at least their games would be shown in German tv and they would for sure have better viewer numbers than DEL matches. Don't forget that during DEL matches most German hockey fans are in the arenas themselves.

 

[Jussi]

I didn't say there would be any BIG money involved like in football where the league gets half a billion a year but yes if there would be 1-4 German teams in KHL then at least their games would be shown in German tv and they would for sure have better viewer numbers than DEL matches. Don't forget that during DEL matches most German hockey fans are in the arenas themselves.

What would make things different with KHL?

 

[Vicente]

What would make things different with KHL?

For an average DEL fan it is not interesting to see a game like Straubing-Ingolstadt when your own team plays at the same time.

KHL would be mostly on other dates and at other times. And off course these KHL teams would attract more viewers as KHL is more like UEFA Champions League in football than average DEL matches.

 

[vorky]

When does DEL clubs start their games? KHL´s games start at 19:00 or 19:30 local time during week, at 17:00 during weekends.