KHL business aspects discussion

[mkev400]

If those numbers are correct, Datsyuk took a hefty pay cut in order to return home. Pretty sure his "outstanding salary obligation", which Arizona acquired to make the salary cap floor, was somewhere close to 8 million USD... So in that sense, SKA got a good deal on a superstar, regardless if he was coming home anyway...

 

[Acallabeth]

If those numbers are correct, Datsyuk took a hefty pay cut in order to return home. Pretty sure his "outstanding salary obligation", which Arizona acquired to make the salary cap floor, was somewhere close to 8 million USD... So in that sense, SKA got a good deal on a superstar, regardless if he was coming home anyway...

Datsyuk's salary for the last year of his contract was $5.5M pre taxes. Even if the taxes would be 30% (no idea how much you can deduct in Michigan), it would still put him below the post-taxes $4.5M in SKA.

Also, with 10 points in 12 games on the most loaded team in the KHL, Pavel's not playing like a superstar so far.

 

[hansomreiste]

Mozyakin is not even in top five. Damn, I love this guy more and more. I don't like going too emotional for professional athletes who make millions of dollars and picturing them as saints but anyways, Mozyakin is so cool. He does everything he can do in Russia yet is still low-key. Now that's what I call charisma.

 

[mkev400]

Datsyuk's salary for the last year of his contract was $5.5M pre taxes. Even if the taxes would be 30% (no idea how much you can deduct in Michigan), it would still put him below the post-taxes $4.5M in SKA.

Also, with 10 points in 12 games on the most loaded team in the KHL, Pavel's not playing like a superstar so far.

I confused the actual salary with his 7.5 Million USD cap hit, that Arizona aquired... Silly me...

 

[vorky]

Russian media reported yesterday that Transneft wants to sell its share in the KHL (11,76%) again. The company wanted to sell the share back in 2013, because Russian government ordered the company to sell non-core assets, Lev Praha and Rosneft (CSKA owner) were interested, but the deal did not happen (dont know the reason). The reason for selling the share is that the KHL asset is non-.core, Transneft is not involved in any league´s club. Alexander Medvedev, KHL First President, said to RSport yesterday that Transneft offered its share to all other KHL shareholders but nobody showed an interest.

As sportmanagement.ru reported back in 2013, there were 6 companies and 10 clubs who co-founded the KHL in 2008. Every company had share 11,76%, every club 2,94%. The authorised capital of the KHL was 850 millions Rubles, every company hold 100 millions Rubles, every club 25 millions Rubles. Co-founders as a whole invested to the KHL over 100 millions USD for first 5 years.


KHL co-founders:

- Transneft, Tatneft, Amurmetall, Interros, Magnitogorsk Iron and Steel Works (MMK), Gazprom-export

- Torpedo N.Novgorod, Spartak Moscow, Sibir Novosibirsk, Severstal Cherepovets, Dynamo Moscow, Dinamo Riga, Dinamo Minsk, Ak Bars Kazan, Metallurg Magnitogorsk, SKA St.Petersburg


Tatneft owns the club Ak Bars Kazan, MMK owns Metallurg Magnitogorsk and Gazprom-export owns SKA.



http://www.sportmanagement.ru/articles.php?id=6341

 

[hansomreiste]

So vorky, what does the fact that Transneft wants to sell their shares mean? Could you explain like I'm five? Why does it matter for the league? For what reason exactly? Is it good or is it bad? Do we need to have an idea about this? I can't judge how important this development is so wanted to ask. Thank you.

 

[vorky]

So vorky, what does the fact that Transneft wants to sell their shares mean? Could you explain like I'm five? Why does it matter for the league? For what reason exactly? Is it good or is it bad? Do we need to have an idea about this? I can't judge how important this development is so wanted to ask. Thank you.

I started to follow KHL really closely five or six years ago, so I dont know all details from the time (2008) when KHL was established.

If I know it was Medvedev´s idea (Gazprom) to create paneuropean hockey league (btw Fetisov and Chernyshenko tried it to do before 2008, but it did not happen). If we look at other cofounders - Tatneft, Transneft - both are involved in gas/oil bussiness like Gazprom. So it happened that Transneft became KHL cofounder. Transneft is state owned company and Russian goverment ordered them to sell non-core (gas) assets. Dont know why government decided so, maybe some Russian poster knows the answer. Transneft wanted to sell it in 2013, now trying again. So nothing new here.

What does it mean for the league? If the deal happens, then there will be new shareholder/s. If the new shareholder is some company involved in KHL club/s (for example Rosneft), then bussiness remains within the league. If new shareholder/s is outside KHL clubs, then it is good for league because new entity is involved (new money in the hockey bussiness). From financial point of view, according to Chernyshenko, KHL is in best shape ever and wants to grow. Generally speaking, the change of sharedolder/s should have no (negative) impact on KHL bussiness.

Of course I can be wrong.

Btw, I dont know how accurate the list of shareholders is now in 2016, because Spartak (shareholder) left KHL a few seasons ago. Did Spartak sell the share?? To whom? Or kept the share? Similar question is with Interrros (the holding included NorilsNikel who was CSKA sponsor before Rosneft). Did they sell the share to Rosneft? I dont know because I dont have newest data.

When speaking about bussiness. Russia says completes Bashneft sale to Rosneft for $5.3 billion. Source. Bashneft is SY Ufa sponsor. What does it mean for the club? Rosneft can sponsor both clubs (like Gazprom has been doing with SKA, Omsk and maybe others).

 

[ybnvs]

Jon Blum (Admirals) is a personal friend of mine. He has not been paid in full for his season last year nor his bonuses per his performance. The KHL is behind on their payment to him for this season, too, and Blum admitted to me he's lacking incentive to continue playing his best because the league does not care about it's players or living up to it's deals. He's currently out for a few weeks with an injury (sustained after he scored a SO goal, the goalie tripped him into the boards rendering a broken elbow and torn ligaments). He's still without pay for the majority of this season.

What a horrible league to play for. But what other choices does he have?

 

[Alexander the Gr8]

Jon Blum (Admirals) is a personal friend of mine. He has not been paid in full for his season last year nor his bonuses per his performance. The KHL is behind on their payment to him for this season, too, and Blum admitted to me he's lacking incentive to continue playing his best because the league does not care about it's players or living up to it's deals. He's currently out for a few weeks with an injury (sustained after he scored a SO goal, the goalie tripped him into the boards rendering a broken elbow and torn ligaments). He's still without pay for the majority of this season.

What a horrible league to play for. But what other choices does he have?

That's one of the things I don't like about the KHL. In order to be competitive, a team like Admiral must recruit good players without having enough to pay them. Obviously a rich team like SKA has no problem paying their players.

 

[hansomreiste]

Jon Blum (Admirals) is a personal friend of mine. He has not been paid in full for his season last year nor his bonuses per his performance. The KHL is behind on their payment to him for this season, too, and Blum admitted to me he's lacking incentive to continue playing his best because the league does not care about it's players or living up to it's deals. He's currently out for a few weeks with an injury (sustained after he scored a SO goal, the goalie tripped him into the boards rendering a broken elbow and torn ligaments). He's still without pay for the majority of this season.

What a horrible league to play for. But what other choices does he have?

Elaborate please.

 

[SoundAndFury]

What a horrible league to play for. But what other choices does he have?

Pack his bags and leave rather than sign an extension in March?

 

[ybnvs]

That's one of the things I don't like about the KHL. In order to be competitive, a team like Admiral must recruit good players without having enough to pay them. Obviously a rich team like SKA has no problem paying their players.

"...without having enough to pay them..."

Quoted in and out of context for posterity.

Elaborate please.

That's why it's posed as a question.
I'll ask another way, how does he get paid for the services he provides? How does the KHL improve upon it's quality to uphold their end of every deal to players?

Pack his bags and leave rather than sign an extension in March?

Well, I wonder if he'll get paid? He also signed a 2 year deal prior to the start of this season.

 

[Acallabeth]

I'll ask another way, how does he get paid for the services he provides?

With money

How does the KHL improve upon it's quality to uphold their end of every deal to players?

Gradually.

 

[Alexander the Gr8]

"...without having enough to pay them..."

Quoted in and out of context for posterity.

This is my interpretation. I see no other reason why a team wouldn't pay all its dues to a player.

 

[SoundAndFury]

He also signed a 2 year deal prior to the start of this season.

Well that's exactly my point. Why did he sign that extension if he's so unhappy about playing for Admiral? It doesn't make sense in context of what you are saying. Nobody thinks "oh it's all so bad here I want to leave" and signs an extension with the very same team at the same time. It's not like he didn't have offers elsewhere after last season.

 

[malkinfan]

Wiz also just signed there, likely had many options around Europe, likely called Blum up to see if its a good organization to be a part of. Maybe there is some delay in payments, but given the signings etc and other points brought up in the thread, does not seem logical that there is a big problem there. Wiz is a pretty high profile guy, I have my doubts that he would head into the middle of a crap storm.

 

[Acallabeth]

Blum himself isn't the first NA player to sign with Admiral, David Booth has played 2 years with them, I'm sure he gave Jon an advice.
I guess Admiral has restructured their debts to the players and is paying behind the original plan, hadn't that happened, their management would be suspended and Blum should have gone to arbitrary comitee to solve the problem.

 

[vorky]

Sibir belongs to best growing KHL clubs at social media this season. Some (positive) extreme are numbers for October. Sibir grew by 10 681 followers on Twitter during October. Now, two days later Sibir collected another 2 897 followers. Sibir has 95 243 followers now and can be 4th KHL club with 100k followers.

 

[vorky]

Dmitry Chernyshenko interview

We have been preparing options of KHL development for next couple of seasons, these options will be part of long term (seven) KHL Development Strategy. There are various scenarios in new KHL Development Strategy – including the optimalization of number of clubs in the league (according to sport principle). I admit that KHL might reduce number of clubs if KHL Board of Directors approves it.

KHL President Dmitry Chernyshenko was interviewed by RSport agency, the article was published today. Here are key notes of the interview. Written by @vorkywh24.

- Chernyshenko became KHL President in November 2014. He and his team have stabilised the league from financial point of view. The league introduced the model of revenue sharing (there was non under Medvedev). The league shared 243 millions rubles with clubs for last season, plans to share at least similar sum for current season. Authorised capital has increased under Chernyshenko.

- The league has been preparing new 7 years Development Strategy. One option is reduction of clubs in the league if needed. The league and their clubs dont want to reduce number of games (if less clubs) of regular season in future. KHL has 870 regular season games now. KHL will consider expansion plans in new Strategy (if KHL wants to expand or not. If yes, so how).

- Medvescak has paid their debts according to plan. KHL will lift suspention of club´s President Gojanovic.

- London, Milan, Paris rumors. These clubs has not officially applied, so Chernyshenko cannot comment it. So just rumors now.

- Chernyshenko admits that some clubs have financial problems, especially Novokuznetsk, but he is sure that all clubs will finish the season as planned.

- Chernyshenko believes that Kunlun will fix attendance problems. The club should finish Marketing and Communication Strategy of club soon.

 

[Ronjames]

Dmitry Chernyshenko interview

Спасибо больше!

I can read some Russian but it takes me quite a while to read a newspaper article.

Is there an extent to what the revenue sharing model is like? (% wise)

 

[vorky]

Спасибо больше!

I can read some Russian but it takes me quite a while to read a newspaper article.

Is there an extent to what the revenue sharing model is like? (% wise)

You are welcome! I try to do my best to inform about KHL correctly.

KHL has two ways of income/revenue - it is sponsorship deals (Sogas, Mastercard, Coca Cola etc) and selling tv rights to broadcasters. KHL takes all money from sponsorship deals, no sharing with clubs. Revenue from tv rights is shared with clubs, see a model below, KHL keeps 20% of this tv money and shares rest with clubs (based on results on ice or demand from tv broadcasters, your team will get more money if there is bigger demand from broadcasters, it is some motivation aspect for clubs to develop)



KHL did not share any money with clubs under Medvedev as President (2008-Nov 2014). Chernyshenko introduced this model as stated above and the KHL shared 114M rubles for 14/15 season and 243M rubles for 15/16, plans to share at least as much money as in 15/16 for current season, so 243M rubles.

Readthis article (the table) to know structure in % of KHL budget (spending/income).

Feel free to ask if you need anything to explain.

 

[vorky]

I googled and find some informations about KHL revenue sharing.

KHL shared 114 millions rubles for 14/15 season

- SKA´s share was 15,2 millions rubles (cca 222k euro according to ruble/euro exhange rate on 19 Nov 2016, but it is not correct to count it according to today´s rate)

- CSKA´s 10,6 millions rubles (cca 155k euro)
- Ak Bars 8,7 millions rubles (cca 127k euro)
- Dinamo Riga 3,5 millions rubles (cca 51k euro)


KHL shared cca 243 millions rubles for 15/16 season

- CSKôs share was 32 millions rubles (cca 467k euro)
- Magnitka 25 millions rubles (the sum is expectation of Magnitka, not confirmed) - cca 365k euro

I would welcome more details on topic if anybody knows.

For comparison CHL prize money for 14/15 season and 15/16 season. Majority of clubs got 20-30k euro/season.

 

[vorky]

source

 

[Ronjames]

Как интересно увидеть!)

Я был студент по обмену в Питере в феврале до июля... Так - Кхл мне интересуют)

So they shared 3.7M US in total!?! That seems pitifully low for 29 teams. But I guess it is a number which they hope to keep growing.

 

[Alessandro Seren Rosso]

So they shared 3.7M US in total!?! That seems pitifully low for 29 teams. But I guess it is a number which they hope to keep growing.

It's low money, but it's growing year after year.
BTW KHL is a singular-case word