Sanctions and the KHL

[kaiser matias]

I'm writing a paper that looks at how the crisis and sanctions have affected the league so far, and am wondering if anyone here has anything constructive to add. While I don't want to sound like I'm asking for people to do my work for me, I just want to see if there are any details I've missed.

The paper essentially is looking at how the sanctions have affected Russia through the lens of the KHL. So it will see that even though the league wants to go more into Europe, its facing difficulties (not just from the sanctions I know, but I don't see them, or the current conflict, helping). And the financial difficulties that spring up, while not directly due to all that, is going to be noted. Finally I want to mention the players themselves, and look at any perceived difficulties in recruiting European/North Americans to the KHL this year, as opposed to previous years, and how the current decrease in value of the ruble has affected things.

Anyone willing to provide anything more, or clarify why something should or should not be included, would be most appreciative. As would any media articles, be they English, Russian, Croatian, whatever. I would use anything, so long as its reputable.

Click to read more...

 

[loppa*]

I have not come across anything, which is probably a sign that they don't affect the KHL much.

 

[Exarz]

Isn't it the main reason why Gazprom hasn't been given money to the clubs?

 

[vorky]

Dont know if this helps you. It is interview with Medvedev, boss of KHL.

- there is different among league and clubs. KHL as league has no problems, because all revenues (sponsors, tv rights etc) belongs to league not clubs. No revenue sharing.

- league has "reserve/emergency fund" to help its clubs. At least five clubs will pay 20% luxury tax after season which will be used in this fund. It is the tax for clubs which exceed salary cap (1,1 mld rubles)
- according to Medvedev, there are problems in clubs but will be solved, no Spartak case.

- Special case is Salavat Yulaev Ufa and its sponsor Fond Ural (sponsor VHL as well). It is Bashneft case if you want to google. All will be OK as Medvedev said.

 

[vorky]

Isn't it the main reason why Gazprom hasn't been given money to the clubs?

What do you mean? As I know GazpromNeft is sponsor of SKA and Avangard.

 

[Yakushev72]

Isn't it the main reason why Gazprom hasn't been given money to the clubs?

There are no sanctions that affect Gazprom. The EU has insisted that no sanctions be levied against the natural gas industry in Russia because the EU economies are so heavily dependent on Russia for their natural gas supplies. If the winter is cold, the dependency will be even greater. Some sanctions affect Rosneft, but again, the EU is very reluctant to embargo supplies that they badly need. And its very easy to just sell oil on the world market and hide its origins.

 

[Exarz]

Oh, I thought it was Gazprom itself that sponsored the clubs with a lot of money and, for example, that is the reason a few clubs struggle because they never got those money?

- league has "reserve/emergency fund" to help its clubs. At least five clubs will pay 20% luxury tax after season which will be used in this fund. It is the tax for clubs which exceed salary cap (1,1 mld rubles)
- according to Medvedev, there are problems in clubs but will be solved, no Spartak case.

Phew, that's a relief..

 

[Medo]

Oh, I thought it was Gazprom itself that sponsored the clubs with a lot of money and, for example, that is the reason a few clubs struggle because they never got those money?

MedveÅ¡čak is sponsored by PPD, a company that distributes Gazprom's products to Croatian market. I don't know if Gazprom is sponsoring the club directly as well but PPD's adds are on our ice and there are many promo actions with PPD brand and not Gazprom. Charities, donations for every scored goal and similar actions.

Other 3 main sponsors are from Denmark (Carlsberg), Germany (Lidl) and domestic Podravka.

 

[Jussi]

I have not come across anything, which is probably a sign that they don't affect the KHL much.

You haven't been paying much attention then. Sanctions have increased the downturn in Russian economy, the ruble is as record lows and while clubs dependent on Gazprom sponsorship haven't been affected that much (except maybe Riga), the clubs that get their funding from regional governments have had problems paying salaries on time. Some Russian site reported just recently that UFA might have big issues as wehl but that is dues to a criminal investigation regarding the main source of funding/ownership and not sanctions.

 

[BlueBratislava]

According to the official statement of Maros Krajci, the GM, Slovan Bratislava has a decent amount of sponsorship money coming from companies that conduct business with RF and the sanctions have made it harder for them to operate in some spheres of economy. This then affected the amount, and timeliness of money coming to Slovan which affected the "Accounts Payable" of the club. Here is the official list of sponsors, none of them are located in RF.
http://www.hcslovan.sk/en/partneri-klubu/

 

[kaiser matias]

There are no sanctions that affect Gazprom. The EU has insisted that no sanctions be levied against the natural gas industry in Russia because the EU economies are so heavily dependent on Russia for their natural gas supplies. If the winter is cold, the dependency will be even greater. Some sanctions affect Rosneft, but again, the EU is very reluctant to embargo supplies that they badly need. And its very easy to just sell oil on the world market and hide its origins.

Gazprom has had sanctions leveled against it to some degree:

Sweeping new US and EU sanctions target Russia's banks and oil companies

Even more draconian measures were imposed on the Russian energy industry, where the US and Europe are attempting to shut down important new exploration projects in Siberia and the Arctic by barring foreign oil companies from providing any equipment, technology or assistance to deepwater, offshore, or shale projects.

The bans will prevent previously active companies such as Exxon and Shell from dealing with five of the largest Russian oil producers and pipeline operators: Gazprom, Gazprom Neft, LukOil, Surgutneftegas, and Rosneft.

Granted Gazprom Neft has challenged the EU ban:

Russia's Gazprom Neft says challenges EU sanctions in court

Gazprom Neft, the oil arm of Russia's state gas giant Gazprom, said on Tuesday it has challenged in a European Union court the bloc's sanctions against it, imposed as part of wider restrictions on Russia over Ukraine.

And thanks to everyone who's provided information so far. To clarify what I'm trying to do a little more, I want to use the KHL as an example to see how, if at all, the sanctions have affected Russian society; if the KHL hasn't seen any effects, then that will be mentioned as well.

The class itself is about Russia's foreign policy, so I am going to heavily lean towards looking at the KHL and its various rumoured expansion plans, and how it's been used as a vehicle to promote Russia and Russian interests. And then how this has kind of been sidelined due to what's gone on this year. I'd also note the heavy government involvement in ownership groups, and how even Jokerit was bought by guys close to Putin. And that Donetsk had to leave directly because of the fighting, stuff like that.

 

[Yakushev72]

Gazprom has had sanctions leveled against it to some degree:

Sweeping new US and EU sanctions target Russia's banks and oil companies



Granted Gazprom Neft has challenged the EU ban:

Russia's Gazprom Neft says challenges EU sanctions in court




And thanks to everyone who's provided information so far. To clarify what I'm trying to do a little more, I want to use the KHL as an example to see how, if at all, the sanctions have affected Russian society; if the KHL hasn't seen any effects, then that will be mentioned as well.

The class itself is about Russia's foreign policy, so I am going to heavily lean towards looking at the KHL and its various rumoured expansion plans, and how it's been used as a vehicle to promote Russia and Russian interests. And then how this has kind of been sidelined due to what's gone on this year. I'd also note the heavy government involvement in ownership groups, and how even Jokerit was bought by guys close to Putin. And that Donetsk had to leave directly because of the fighting, stuff like that.

Banks, yes, and oil companies to a very limited degree, but no measures are being proposed or enforced against the gas industry. They are trying to hurt Russia without hurting themselves too much, and that is hard to do in the energy sphere.

 

[Urbanskog]

I'd also note the heavy government involvement in ownership groups, and how even Jokerit was bought by guys close to Putin.

Harry Harkimo, a Finnish businessman owns 51% of the team.

 

[Atas2000]

You haven't been paying much attention then. Sanctions have increased the downturn in Russian economy, the ruble is as record lows and while clubs dependent on Gazprom sponsorship haven't been affected that much (except maybe Riga), the clubs that get their funding from regional governments have had problems paying salaries on time. Some Russian site reported just recently that UFA might have big issues as wehl but that is dues to a criminal investigation regarding the main source of funding/ownership and not sanctions.

All you bring up here has zero connection to the sanctions [Mod]. Give it some effort and read about the case in Ufa.

 

[Peter25]

Russia will supply China with more gas than it currently supplies EU starting 2020. That will give Gazprom a far better negotiating position and it will have some effect on the KHL as well (due to increased revenues).

 

[Jussi]

Russia will supply China with more gas than it currently supplies EU starting 2020. That will give Gazprom a far better negotiating position and it will have some effect on the KHL as well (due to increased revenues).

That's 6 years away. Plus there's there's the World Cup in 2018 which will eat up a lot of money from hockey sponsorship.

 

[WeAre]

That's 6 years away. Plus there's there's the World Cup in 2018 which will eat up a lot of money from hockey sponsorship.

Wow, WC in 2016 and 2018.

 

[Yakushev72]

That's 6 years away. Plus there's there's the World Cup in 2018 which will eat up a lot of money from hockey sponsorship.

In fact, its unlikely that sanctions will ever be severe enough to affect the KHL or other peripheral holdings of Gazprom and others. The fact is, Europe has no other source of large quantities of natural gas than Russia. Again, the objective is to enact sanctions sufficient to satisfy the United States that the EU is meeting treaty obligations and supporting the US position without actually damaging EU economies and causing pain and suffering among the populace. That is extremely hard to do if the EU imposes sanctions that really hurt Russia.

 

[Jussi]

Wow, WC in 2016 and 2018.

Different sports. Plus there's still question marks floating around the 2016 one.

 

[Jussi]

In fact, its unlikely that sanctions will ever be severe enough to affect the KHL or other peripheral holdings of Gazprom and others. The fact is, Europe has no other source of large quantities of natural gas than Russia. Again, the objective is to enact sanctions sufficient to satisfy the United States that the EU is meeting treaty obligations and supporting the US position without actually damaging EU economies and causing pain and suffering among the populace. That is extremely hard to do if the EU imposes sanctions that really hurt Russia.

It's got nothing to do with "treaty obligations", the desire to place sanctions is strong but economic ties/reasons are shackling some countries a bit more than they like to admit in public.

It's not the sanctions on Gazprom that would effect but other financial sectors. If Russia's debt gets downgraded again, they'd be one step away from major crisis.

 

[Yakushev72]

It's got nothing to do with "treaty obligations", the desire to place sanctions is strong but economic ties/reasons are shackling some countries a bit more than they like to admit in public.

It's not the sanctions on Gazprom that would effect but other financial sectors. If Russia's debt gets downgraded again, they'd be one step away from major crisis.

But who gets hurt by that? Russia buys a huge quantity of goods and services from the EU, but exports very little other than gas, oil, and vodka to the West. There is almost no trade that exists between the United States and Russia other than the purchase of raw agricultural products and the export of vodka. There is no risk to the United States in levying sanctions, but the EU would pay a substantial price for the loss of Russian investment. And more severe sanctions would force Russia to move its bank assets from Europe to Qatar, Malaysia, Hong Kong and other Asian markets.

 

[maxim84]

Uuu... I saw vodka is mentioned now...how to put a off-topic question but connected with this discussion so it doesn't get deleted by mods... but here goes:
If eu starts sanctions against russia on vodka imports, over wich brand would europeans (and a small number of russian players in western europe) cry the most? Basically wich russian vodka is the best

 

[Yakushev72]

Uuu... I saw vodka is mentioned now...how to put a off-topic question but connected with this discussion so it doesn't get deleted by mods... but here goes:
If eu starts sanctions against russia on vodka imports, over wich brand would europeans (and a small number of russian players in western europe) cry the most? Basically wich russian vodka is the best

Among the export brands that are 100% Russian, I would probably suggest that Russian Standard might be the brand that would be missed most. RS has a wide range of products from high-end premium to dirt-cheap, but all pretty good quality. I think it sells very well in America and throughout Europe. One of my favorites is Five Lakes from the Omsk Region, which is sold for export, but I think very limited.