KHL Expansion Part VIII

[Barclay Donaldson]

Still, you do not get my point.

Of course, when a team decides to join the KHL, there must be financing. That is fine. But, why to make barriers for clubs if they wish to join the KHL? That is a problem that European hockey federations "invent" barriers for clubs who are interested in joining the KHL. That is a key reason why the expansion is so slow. And politics is another reason.

The same federations who are not able to agree on a simple deal with the NHL on transfers. Why should I believe them that their decision on hindering the KHL´s expansion is beneficial for European club development?

Your main issue is financing. I do not see it as the most crucial issue. I named much more important issues above.

If a Finnish citizen thinks that Jokerit´s financing is illegal, it is his duty to report it to the police.

I get your point. Certain associations are blocking a transcontinental league. They're preventing a league from standing up to the big bad NHL you dislike so much. No league will ever be able to compete with the NHL. The KHL will never have the stability or quality the NHL has and will have. There's too many problems with ownership, player development, and TV revenue that will never be solved. A transcontinental league won't be able to compete with the NHL either. Any attempt to do so is futile. When the US economy tanked in 08, the league didn't get turned upside down. The KHL was hurt so bad by the ruble that Gazprom had to step in. And they're supposedly the NHL's closest competition.

And I'm not saying Jokerit's financing is illegal. I'm saying they're one of the most valuable clubs in the league and are still losing a ton of money and it's unsustainable. That's not a good sign and the reason why no other people will join. There's been interest in KHL Europe expansion for years, but once ownership groups crunch the numbers they're out.

They should put up barriers, it will prevent stupid people from losing a ton of money and not benefiting the country at all. Jokerit isn't helping keep Finnish talent like it was designed to, like your argument presumes. Eeli Tolvanen, Vesalainen, Rasanen just left for the AHL a few days ago, Korpisalo left before Jokerit joined the KHL but my point remains. Crowns won't be able to keep top Swedish talent. A German team wouldn't either. Bratislava certainly hasn't kept the top Slovak talent. Russian teams certainly haven't kept the best Russian players. Heck, even Radulov, who left under a clout, still came back. Put the resources into improving the domestic leagues and accept that you'll lose your best players to the NHL. That's what happens when there's so much money in a stable league that everyone wants to play in so much more than everywhere else. No one will ever catch up, or even come close.

 

[ForumNamePending]

There was a serious interest in getting Sparta Prague and AIK Stockholm in the past. Both clubs could be top teams in the West, even better than Jokerit. For those, who do not know, Jokerit is among top 3 valuable teams of the league, if not #1. Kurri is a KHL BoD member, so he has a vote in the governing body of the European hockey.

Now, look at both Sparta & AIK. Sparta´s owner has made the club irrelevant in the Czech Republic, fans hate what he has done to the club. AIK Stockholm is still in the 2nd tier, who knows if the club will promote ever. On a good way now, we will see.

Instead of their current situation, they could be the leading clubs in Europe while playing the KHL.

Sparta, despite apparently having a poor season on the ice, still had the highest attendance in the Czech Rep., and the 9th highest attendance in all of Europe. How exactly are they irrelevant? If they are irrelevant what does it say about most of the teams in the KHL?

I would think AIK's main issue is that they have not just sucked, but sucked REAL bad, for 3+ decades. How exactly does moving to the KHL correct the 30+ years of sucking? If AIK, like their crosstown rival Djurgarden, spent the better part of the past 30+ years being good to great, they, like Djurgarden, would probably be one of the best supported hockey clubs in Sweden. But even if AIK did spend the past 30+ years being good to great, and being one of the best supported clubs in Sweden, they, like Djurgarden, still wouldn't be able to sustain themselves in the KHL without someone(s) willing to spend an indefinite amount of money over an indefinite period of time to prop the whole thing up.

Finally, why is Jokerit held up as some amazing KHL success story? They have apparently lost ~50 million EUR since joining the KHL, have won only two playoff series in 5 years, and this season the average attendance was lower than it was in any of their last 3 seasons in the Finnish league. This is what Sparta, AIK, or any other club, should be striving for?... And for what, so a few Czechs and Swedes *might* stick around for an extra season or two before leaving for the NHL?

Let's talk about this when it happens, because it feels really close to a discussion we had on this board almost 10 years ago, at which point you said "a Swedish team is guaranteed to join soon" with teams from multiple other countries guaranteed.

Seriously, iirc from older threads, by now wasn't the KHL suppose to have 30+ teams (with $50 million payrolls), with about half those clubs located in Russia/former SU and the other half spread throughout the rest of Europe?

 

[SoundAndFury]

You can say firmly, the way it was created originally, the KHL is a failed project already. Now it's sort of transforming into this "what can we actually do" part where every European team has either quit or is dying and the Asian market is much more of a focus albeit there is no success there either. Still thinking about KHL as of something that has "European Superleague" ambitions is just being stuck in time. Unless KHL transforms itself somehow into the self-sustainable league while improving their product you can stick a fork into all these speculations about reputable European teams joining.

 

[Jussi]

When looking at transfer rules, the relationship the KHL vs Europe is equal. The KHL honours players contracts with European clubs and vice-versa.

Except for the fact that every player now has a KHL out-clause in their contracts, guaranteeing them either a cheap or a free exit from their current contract. Some Liiga bosses have already said that it's financially more beneficial for them to develop their juniors/players so that they'd be drafted and signed by an NHL club rather than lose them for nothing to a KHL club. Every agent wants them for their clients and for example Liiga clubs can't prevent them due to fears of the Liiga Players Association lawyering up with calls of attempts to restrict player movement.

 

[Jabs102501]

Soo.... judging by the recent news KHL is going to Tashkent.

Fun fact. I believe Arthur Kaliyev was born in Tashkent, at least that's what EP says

 

[Caser]

Fun fact. I believe Arthur Kaliyev was born in Tashkent, at least that's what EP says

Yeah, he was born there, but moved to NA with his parents when he was like 1 year old. 'Kaliyev' is a Kazakh surname though, which is no surprise, as Tashkent was quite a multicultural city in Soviet times with notable Russian, Ukrainian, Tatar, Korean and Kazakh diasporas.

 

[TheWhiskeyThief]

The EU court rulings against the speed skating governing body a year ago suggest that any suspensions of teams or players by any EU based hickey governing body for a team to join the KHL would be a restraint of trade.

The KHL’s problem is that that they don’t know whether to scratch their watch of wind their keister.

Are they a glorified Russian league or are they a continental league? The continental aspect is in countries(Jokerit aside) where the GDP per capita makes it hard to have either good gate receipts or TV contracts.

But if you could put teams in London, Paris Milan, Hamburg, Copenhagen and Madrid, you could expand your TV footprint in a meaningful way, doesn’t impact the domestic leagues dramatically.

But the KHL has to get to their hard cap for investors to have an environment where they can project a path to profitability. Even a $12mm cap is probably double what Slovan can budget for. Then they have to figure out the size of the league and the schedule format.

For countries with well established domestic leagues, a possibility would be more of a blended structure between CHL & domestic leagues. CHL would be split into 2 conferences round robin, rather than this glorified training camp. The domestic league round robin with non CHL qualifiers playing an extended promotion/relegation league.

But the one thing the CHL should do is have the group play go to the IIHF WM format and have the games at hosted sites so fans can plan their trips around it well in advance.

 

[Milos Krasic]

Uzbekistan and Kazakhstan were detention centers. So the lucky people who survived or their government oppressors are Russian.

 

[Jussi]

The EU court rulings against the speed skating governing body a year ago suggest that any suspensions of teams or players by any EU based hickey governing body for a team to join the KHL would be a restraint of trade.

The KHL’s problem is that that they don’t know whether to scratch their watch of wind their keister.

Are they a glorified Russian league or are they a continental league? The continental aspect is in countries(Jokerit aside) where the GDP per capita makes it hard to have either good gate receipts or TV contracts.

But if you could put teams in London, Paris Milan, Hamburg, Copenhagen and Madrid, you could expand your TV footprint in a meaningful way, doesn’t impact the domestic leagues dramatically.

But the KHL has to get to their hard cap for investors to have an environment where they can project a path to profitability. Even a $12mm cap is probably double what Slovan can budget for. Then they have to figure out the size of the league and the schedule format.

For countries with well established domestic leagues, a possibility would be more of a blended structure between CHL & domestic leagues. CHL would be split into 2 conferences round robin, rather than this glorified training camp. The domestic league round robin with non CHL qualifiers playing an extended promotion/relegation league.

But the one thing the CHL should do is have the group play go to the IIHF WM format and have the games at hosted sites so fans can plan their trips around it well in advance.

Therein lies the problem. If they drop the salary cap low enough for teams to make profit, then the top players salaries drop so much that other European leagues are suddenly more competitive. And when you add that they can offer shorter schedules and shorter travel and a safe environment for the family, the KHL lure decreases more and more.

 

[TheWhiskeyThief]

$12mm salary cap is more than enough money to put together a 22 man squad.

 

[vorky]

$12mm salary cap is more than enough money to put together a 22 man squad.

And that is still 3-times more than the rest of Europe. Therefore I say the SHL will have a problem when the KHL expands with multiple clubs from bigger cities as you said earlier. Or, European leagues will have to increase their payrolls which I cannot imagine.

 

[Jonimaus]

And that is still 3-times more than the rest of Europe. Therefore I say the SHL will have a problem when the KHL expands with multiple clubs from bigger cities as you said earlier. Or, European leagues will have to increase their payrolls which I cannot imagine.

Which are those cities, and when will it happen?

 

[Caser]

Uzbekistan and Kazakhstan were detention centers. So the lucky people who survived or their government oppressors are Russian.

Kazakhstan was, Uzbekistan wasn't, you're confusing something here. In case of Tashkent the diasporas are from the times when it was a major Soviet industrial center, particularly it was a major center for Soviet aircraft, heavy vehicle and textile industries.

 

[Barclay Donaldson]

And that is still 3-times more than the rest of Europe. Therefore I say the SHL will have a problem when the KHL expands with multiple clubs from bigger cities as you said earlier. Or, European leagues will have to increase their payrolls which I cannot imagine.

They've been losing teams left and right. Atlant, Novokuznetsk, Spartak had to take a year off, Poprad, Praha, Medvescak, Donbass, Lada, and Yugra all died during the past few years. They're not going to expand to Europe, everyone has learned their lesson already. Especially since no one has joined in the decade or so there's been these continued claims of imminent expansion.

They've also been saying since the 2012 NHL Lockout that in a few years the KHL will be a 60 team league with 30 in Europe. There's Bratislava and Jokerit. And they're both getting bankrolled. No one wants to through money into a pit and never see it again, that's why the KHL expansion in Europe is over. Get over it.

 

[vorky]

They've been losing teams left and right. Atlant, Novokuznetsk, Spartak had to take a year off, Poprad, Praha, Medvescak, Donbass, Lada, and Yugra all died during the past few years. They're not going to expand to Europe, everyone has learned their lesson already. Especially since no one has joined in the decade or so there's been these continued claims of imminent expansion.

They've also been saying since the 2012 NHL Lockout that in a few years the KHL will be a 60 team league with 30 in Europe. There's Bratislava and Jokerit. And they're both getting bankrolled. No one wants to through money into a pit and never see it again, that's why the KHL expansion in Europe is over. Get over it.

I will remind you again what we have heard from some people since 2008. It is as follows: the KHL will cease to exist within a few years.

So, why should we believe you now?

 

[Barclay Donaldson]

I will remind you again what we have heard from some people since 2008. It is as follows: the KHL will cease to exist within a few years.

So, why should we believe you now?

I'm not saying the KHL will cease to exist. Nowhere have I said that. I don't think any reputable sources have said that either. All that's been said is that the teams are bankrolled by the big Russian companies that sponsor them since they make no money, save for some of the big teams like CKA and CSKA. They were right, and teams like Lada were cut out.

What I am saying is that no one wants to own a team that can't make money. That's not politics, that's basic economics. Jokerit's owner even said he's not passing this down to his son because it's a burden. They're the most valuable team and they're tens of millions of dollars in the hole. What does that say about the rest of the league? Do you think European teams want to join a league where even the most financially healthy team is losing money hand over fist? You'd be insane if you think that any European groups who are rumored to be interested still are after they crunch the numbers.

The KHL wouldn't exist if all but a handful of teams were bankrolled by government owned companies.

 

[Exarz]

They've been losing teams left and right. Atlant, Novokuznetsk, Spartak had to take a year off, Poprad, Praha, Medvescak, Donbass, Lada, and Yugra all died during the past few years. They're not going to expand to Europe, everyone has learned their lesson already. Especially since no one has joined in the decade or so there's been these continued claims of imminent expansion.

Well IIRC, the plan was to move Poprad to Prague anyways since it was "the same club". And is it really fair comparing Donbass when the war broke out? They were even in the building phase of a new 12,000 arena and would for sure still be in the league if it wasn't for what happened.

They've also been saying since the 2012 NHL Lockout that in a few years the KHL will be a 60 team league with 30 in Europe. There's Bratislava and Jokerit. And they're both getting bankrolled. No one wants to through money into a pit and never see it again, that's why the KHL expansion in Europe is over. Get over it.

Those are also two different eras under two different KHL leaderships. Medvedev's mind (who came with the "60 team proposal") was basically just to throw money everywhere when they had the money to do so. Chernyshenko is at least more business oriented for the league, aiming to increase revenue and make teams less dependent on external finances.

I don't think the KHL and its model will ever be sustainable and is for sure dependent on state corporations/regional government/oligarch money but that's how it will always be, no matter if they were to decrease the KHL to a 12 team league.

And no, I wouldn't say that the Western expansion is over, it has just shifted to the market penetration of more exotic hockey markets, like France and the United Kingdom

 

[Barclay Donaldson]

Well IIRC, the plan was to move Poprad to Prague anyways since it was "the same club". And is it really fair comparing Donbass when the war broke out? They were even in the building phase of a new 12,000 arena and would for sure still be in the league if it wasn't for what happened.

I concede that Donbass was a borderline one. I considered Donbass do be barely fair enough considering that when they resumed play, they moved over to the Ukrainian league rather than staying in the KHL. I know there's violence in the region and they play somewhere near Donetsk but away from the frontline, but I'm harsh, what can I say. Poprad to Praha was included since it was a completely different organization and still folded.

I don't think the KHL and its model will ever be sustainable and is for sure dependent on state corporations/regional government/oligarch money but that's how it will always be, no matter if they were to decrease the KHL to a 12 team league.

And no, I wouldn't say that the Western expansion is over, it has just shifted to the market penetration of more exotic hockey markets, like France and the United Kingdom

A London KHL team was "confirmed" in 2016 to play at the O2 Arena. O2 Arena denied it, saying that it's the busiest arena in the world and didn't even have enough open dates throughout the year let alone hockey season. There's not another suitable arena in London and there isn't one in the books. As for the EIHL, there's only two stadiums with 9,000 seats and no teams with attendance over 5,000. So count out the UK.

One French team got 19,000 in like 2013 and it blew up interest like the German national team playing in front of more than 77,000 at Veltins. No French team averages more than a few thousand per game. One time events aren't indicative of average attendance, they're outliers. If they do join and become an exotic market like you say they will, they'll fail within a few years.

And the league and teams being financially unsustainable is just another nail in the coffin that any legitimate business person (which is the only person you really want in control of a European team rather than another bunch of gang members) won't join.

 

[Jussi]

And no, I wouldn't say that the Western expansion is over, it has just shifted to the market penetration of more exotic hockey markets, like France and the United Kingdom

Yeah I think that's pretty much dead after last year's events.

 

[Exarz]

I concede that Donbass was a borderline one. I considered Donbass do be barely fair enough considering that when they resumed play, they moved over to the Ukrainian league rather than staying in the KHL. I know there's violence in the region and they play somewhere near Donetsk but away from the frontline, but I'm harsh, what can I say. Poprad to Praha was included since it was a completely different organization and still folded.



A London KHL team was "confirmed" in 2016 to play at the O2 Arena. O2 Arena denied it, saying that it's the busiest arena in the world and didn't even have enough open dates throughout the year let alone hockey season. There's not another suitable arena in London and there isn't one in the books. As for the EIHL, there's only two stadiums with 9,000 seats and no teams with attendance over 5,000. So count out the UK.

One French team got 19,000 in like 2013 and it blew up interest like the German national team playing in front of more than 77,000 at Veltins. No French team averages more than a few thousand per game. One time events aren't indicative of average attendance, they're outliers. If they do join and become an exotic market like you say they will, they'll fail within a few years.

And the league and teams being financially unsustainable is just another nail in the coffin that any legitimate business person (which is the only person you really want in control of a European team rather than another bunch of gang members) won't join.

I'm not saying against you on the points you make, just stating facts from the league's statements. I'm not fond of the whole exotic expansion at all, it's just a huge sunk cost and the league won't benefit anything from it (unlike potentially getting an established, well-branded team that can attract both good players and revenue). But it is really just evidence of that there no longer really is interest from established clubs to join the KHL right now, which is fair enough. The league is in its early stage of its new strategic seven year plan and it will be interesting to evaluate how well things have gone once it is complete, but I believe that the league will contract even more teams and more or less be a complete Russian league

 

[Barclay Donaldson]

I'm not saying against you on the points you make, just stating facts from the league's statements. I'm not fond of the whole exotic expansion at all, it's just a huge sunk cost and the league won't benefit anything from it (unlike potentially getting an established, well-branded team that can attract both good players and revenue). But it is really just evidence of that there no longer really is interest from established clubs to join the KHL right now, which is fair enough. The league is in its early stage of its new strategic seven year plan and it will be interesting to evaluate how well things have gone once it is complete, but I believe that the league will contract even more teams and more or less be a complete Russian league

I saw some mention of the 2023 plan. You think it means more contraction? Lada and Yugra were good candidates to kill off, I can think of many more. Or do you think this plans means to improve revenues to prevent killing off more teams?

 

[TheWhiskeyThief]

So Tashkent & Bishkek it is.

How does Ulan Bator not have a team yet?

 

[vorky]

@Exarz understands the KHL´s plans very well.

@Barclay Donaldson is not aware of all details of the KHL Development Strategy. And, he wants to discuss it? Like really?

@Exarz is very correct with the statement that today´s KHL is a totally different league than the KHL under Medvedev. But, why should we make differences over time if we can blame the KHL as we wish?

To reply to @Barclay Donaldson. No, the KHL does not need clubs like the CHL clubs who do not have enough money to travel to Kazakhstan for ONE game per season. Such teams will never join the KHL because they are useless.

 

[Exarz]

I saw some mention of the 2023 plan. You think it means more contraction? Lada and Yugra were good candidates to kill off, I can think of many more. Or do you think this plans means to improve revenues to prevent killing off more teams?

IIRC, the league's goal is to have a 24 team league. Teams like Vityaz, Neftekhimik and Severstal will most likely be contracted sooner or later as they don't really provide any long-term commitment to the league (small markets, small arenas etc.). Although it's sad, I neither see Dinamo Riga nor Slovan play a long-term role in the KHL as they are rather underfinanced and talks about their economic situation and funding pops up every season. Sure, they solve it in the short run, but how interesting are the teams/markets in the long run for the league? As of now, I am also uncertain about Jokerit's future when their KHL contract expires 2022, there are more negative opinions now about the KHL here in Helsinki than it was previously...

I think you need to have a decent insight in how the Russian market works in order to understand how the league's running. It wasn't until Chernyshenko took over that they barely put any effort in marketing teams properly, as teams do in North America and Europe – and this is what they want to develop with the league's core teams. I believe the league somewhere has a list of teams they want to keep and help develop these teams with a proper business model so they can add value to its brands and be less dependent. Jokerit and SKA St. Petersburg are the frontrunners marketing- and business-wise in the league and IIRC, they are also set to help the rest of the teams with their marketing strategies.

Post scriptum: One of the most crucial parts business-wise is for the teams to improve their arenas. A lot of the current teams have until recently or still play in old Soviet arenas, but it's changing now with several new arenas coming, most with a capacity of around 12000.

 

[vorky]

Great summary by @Exarz. I agree.

I will just add a few words.

We still remember the 2014 year, when Russia was hit by sanctions. All Western media outlets proclaimed how the KHL will collapse within a few years. Then, when the KHL started with the contraction, the same media claimed how the KHL is weak and will collapse soon.

The opposite is true. The league is stronger and stronger every year. As you correctly said, the league will help the clubs to be independent. Of course, people do not believe it, but it is their problem. I will just give one example. When Chernyshenko came to the office in 2014-2015, the KHL audience were men over 45-50 years. His goal was to have a younger audience with kids because they bring more money to the clubs. Now, within 4 years, the KHL audience is young families with kids, men and women around 30-35 years. So, you can do your own evaluation of his job. Now, Chernyshenko´s aim is to transform clubs into healthy business entities with the growing potential. A part of that strategy is to expand in the West and in the East as well. And the contraction of useless clubs.

I would not worry about Jokerit. The club is just fine.