KHL Expansion Part VIII

[Barclay Donaldson]

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

As of 2012, the KHL had plans to be a 60 team league, with upwards of 30 teams in Europe. That clearly didn’t happen. As far as I’m concerned, they’re not very good at making good plans.

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

Why would a new stadium change their finances. Attendance isn’t very good though, half the league has under 7,000 per game, with a lot under 4,000. I don’t think if they’re selling out now then they will with new arenas. Plus, tickets are so cheap it can’t be a viable revenue source. Jokerit has a nice arena with 10,000 people per game last year and they still lost in the region of 15 million.

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.

Well, there’s no Western teams who have joined. There’s no European owners who have been consistently showing up. It’s almost like something puts every single one off, despite guarantees that teams will be there. Oh yeah, that’s right, none of the teams make money and nearly every Russian team is bankrolled because it’s either mob owned or a rich owner giving back to the community.

 

[vorky]

The KHL has never had a plan for a 60 team league, with upwards of 30 teams in Europe. If you believe your words, I see no reason for detailed discussion anymore. It would be a waste of time.

 

[Exarz]

Why would a new stadium change their finances. Attendance isn’t very good though, half the league has under 7,000 per game, with a lot under 4,000. I don’t think if they’re selling out now then they will with new arenas. Plus, tickets are so cheap it can’t be a viable revenue source. Jokerit has a nice arena with 10,000 people per game last year and they still lost in the region of 15 million.

- Dinamo Minsk went from below 4000 to averaging between around 10400-14300 depending on the season, being one of the best attended clubs in Europe
- CSKA Moscow went from below 4000, having close to 8500 this season when they switched to a new arena
- Spartak Moscow had around 3500 in their old barn, they're in par with CSKA attendance-wise at around 8500 as well.
- Dynamo Moscow has averaged around 9000 (If I remember it correctly) since they got their new arena this season
- Barys Astana saw an attendance boom of a few thousands compared to their old arena

And I don't think it's completely fair to just look at the numbers. Most of the old arenas have a capacity of 5500, but their attendance percentage-wise is above 90% and will with no doubt reach at least 8000 with a new arena.

As I said in my previous post, you need to understand the Russian market in order to understand the business. Russia's economy outside St. Petersburg and Moscow is not comparable to the European or North American counterparts. You can't have the same ticket prices as European clubs when the GDP per capita is much, much lower. But as I stated earlier, they want to make teams less dependent on government/corporate money, and in order to do that you need to start somewhere. I never said that teams can be completely independent money-wise, that's not possible at all with the high payrolls (although they will decrease but it's still impossible).

And regarding Jokerit, sure this season's attendance has been lower but the attendance has always been around the 10k mark. Jokerit's losses are for sure a problem and the team's revenue has decreased since they switched league. That, plus a budget of around €10m (you can add a few million Euros due to taxation as well) and travel expenses make things add up. It's not a rather sustainable business but they're not in debt since the minority owners cover the expenses.

 

[Barclay Donaldson]

The KHL has never had a plan for a 60 team league, with upwards of 30 teams in Europe. If you believe your words, I see no reason for detailed discussion anymore. It would be a waste of time.

KHL Pres calls for 64-team unified European league

And a quick google search presents this.

KHL expanding to China in 2016-17, South Korea could be next - TheHockeyNews
"For years, the KHL has been looking to grow and expand in an attempt to compete with the NHL and become a worldwide league. In 2012, former league president Alexander Medvedev mentioned the potential for the league to expand to 64 teams. Medvedev was replaced by Dmitry Chernyshenko in November 2014."

The KHL has never had a plan for a 60 team league? If you believe your words, I see no reason for detailed discussion anymore. It would be a waste of time.

 

[vorky]

KHL Pres calls for 64-team unified European league

And a quick google search presents this.

KHL expanding to China in 2016-17, South Korea could be next - TheHockeyNews
"For years, the KHL has been looking to grow and expand in an attempt to compete with the NHL and become a worldwide league. In 2012, former league president Alexander Medvedev mentioned the potential for the league to expand to 64 teams. Medvedev was replaced by Dmitry Chernyshenko in November 2014."

The KHL has never had a plan for a 60 team league? If you believe your words, I see no reason for detailed discussion anymore. It would be a waste of time.

Now you showed how you do not understand the KHL. If you understood the league and Medvedev, you would know why he said it. It was not a detailed plan for expansion, but just a proposal for a united league in Eurasia, with leading Russian, European and Asian teams. The number of teams was irrelevant. The proposal of Europeans was the parallel competition a la UEFA CL. That is all. It is your misunderstanding of the Medvedev´s words. End of story.

 

[Jussi]

And regarding Jokerit, sure this season's attendance has been lower but the attendance has always been around the 10k mark. Jokerit's losses are for sure a problem and the team's revenue has decreased since they switched league. That, plus a budget of around €10m (you can add a few million Euros due to taxation as well) and travel expenses make things add up. It's not a rather sustainable business but they're not in debt since the minority owners cover the expenses.

Plus this year was probably a record on the number of free tickets handed out via various sources and 2 for 1, 3 for 2 4 for 2 ticket campaigns. An issue which hasn't gone down well among the season ticket buyers, especially during the playoffs. I wouldn't be surprised if the attendance keeps dropping next season, that this sort of behavior increases.

 

[Exarz]

Plus this year was probably a record on the number of free tickets handed out via various sources and 2 for 1, 3 for 2 4 for 2 ticket campaigns. An issue which under hasn't gone down well among the season ticket buyers, especially during the playoffs. I wouldn't be surprised if the attendance keeps dropping next season, that this sort of behavior increases.

Yeah I’m one of those not renewing my season ticket, management has been a disaster this season. It was fun paying for a renewed playoff card when I could’ve gotten three tickets* for free in the exact same section

Edit:
* For the three playoff games

 

[TheWhiskeyThief]

Yeah I’m one of those not renewing my season ticket, management has been a disaster this season. It was fun paying for a renewed playoff card when I could’ve gotten three tickets for free in the exact same section

Papering the house with free tickets for anybody besides season ticket holders is a great way to kill the biz.

 

[Exarz]

I'll move it over here from the Jokerit thread

Apparently, the KHL has plans to put a team in Monaco in an arena constructed similar to the planned Helsinki Garden (being underground).

So, any truth in this statement or just some comment on steroids? Someone can correct me if I'm wrong but haven't it been talks about a team in Southern France?

Uutuuskirja ei säästele Hjallis Harkimoa, mutta presidentti Sauli Niinistöltä tulee vankka puoltolause

 

[Rcknrollkillnmachine]

I'll move it over here from the Jokerit thread

Apparently, the KHL has plans to put a team in Monaco in an arena constructed similar to the planned Helsinki Garden (being underground).

So, any truth in this statement or just some comment on steroids? Someone can correct me if I'm wrong but haven't it been talks about a team in Southern France?

Uutuuskirja ei säästele Hjallis Harkimoa, mutta presidentti Sauli Niinistöltä tulee vankka puoltolause

From what I have read east France is where hockey is popular but still this Monaco idea seems ridiculous in terms how they will attract fans particularly if the soccer team can’t fill its stadium.

But nothing surprises me with the KHL.

 

[TheWhiskeyThief]

Rouen draws pretty well, so does Bordeaux.

 

[hansomreiste]

How reliable are the sources about this, though? Even if it somehow comes to happen, I believe it will be used as some kind of a springboard to jump into the French market, similar to Lev Poprad. AS Monaco had the worst attendance out of all 20 teams in Ligue 1 in 2016-17 season where they were crowned the champions. Even some players of the team prefer living in nearby cities instead of renting or buying a flat in Monaco due to inflated prices. It makes absolutely zero sense to build something in Monaco. It is just where the rich keep their money. No culture, no fans, no passion, no interest... Monaco is probably much worse than anything in China or Uzbekistan.

Though I simply can't understand what KHL wants. They used to want around 30 to 32 teams. Then decided 24 is the best number and kicked out some teams. Now the rumours of newcomers from Asia, possibly to create the Far Eastern Division Chernyshenko has been wanting for quite a while. And this Monaco thing as well, which obviously shows their will to expand into European market. How do you accommodate 24 teams like that?

It would be so good to have a team from Germany, maybe Austria and Czechia. I really miss Lev Praha, that team was fantastic. Too bad KHL hockey is just not sustainable without oligarch money, especially when it is a given that there will be a SKA-CSKA conference final pretty much every year.

 

[Jussi]

How reliable are the sources about this, though? Even if it somehow comes to happen, I believe it will be used as some kind of a springboard to jump into the French market, similar to Lev Poprad. AS Monaco had the worst attendance out of all 20 teams in Ligue 1 in 2016-17 season where they were crowned the champions. Even some players of the team prefer living in nearby cities instead of renting or buying a flat in Monaco due to inflated prices. It makes absolutely zero sense to build something in Monaco. It is just where the rich keep their money. No culture, no fans, no passion, no interest... Monaco is probably much worse than anything in China or Uzbekistan.

Though I simply can't understand what KHL wants. They used to want around 30 to 32 teams. Then decided 24 is the best number and kicked out some teams. Now the rumours of newcomers from Asia, possibly to create the Far Eastern Division Chernyshenko has been wanting for quite a while. And this Monaco thing as well, which obviously shows their will to expand into European market. How do you accommodate 24 teams like that?

It would be so good to have a team from Germany, maybe Austria and Czechia. I really miss Lev Praha, that team was fantastic. Too bad KHL hockey is just not sustainable without oligarch money, especially when it is a given that there will be a SKA-CSKA conference final pretty much every year.

As mentioned in the Jokerit thread, Lempinen has a good reputation: Jokerit 2018-2019 - I Am, We Are! I haven't seen the exact quote for the Monaco thing though.

 

[Toro2017]

Now the rumours of newcomers from Asia, possibly to create the Far Eastern Division Chernyshenko has been wanting for quite a while. And this Monaco thing as well, which obviously shows their will to expand into European market. How do you accommodate 24 teams like that?

Someone in jatkoaika.com already made somekind of draft of the possible future, with the current expansion rumors. Ofcourse some teams needs to make way, if they want 24 teams and those expansion teams (second from China, Taskent, Germany and Monaco).

West Conference
Euro division:
Monaco
Hamburg
Slovan Bratislava
Dinamo Riga

West Russian division:
Jokerit
Dinamo Minsk
SKA
Lokomotiv Jaroslav

Central Conference
Capital division:
ZSKA
S.Moscow
D.Moscow
AK Bars Kazan

Ural division:
Magnitogorsk
Jekaterinburg
UFA
Tsheljabinsk

Pacific Conference
Far-East division:
Barys Astana
Avangard Omsk
Taskent
Sibir

Asian Division:
Kunlun
Shanghai
Admiral Vladivostok / Tokio
Amur Habarovsk / Soul

So in this model Sochi, Vitjaz, Torpedo and Neftehimik would go. If Japan and/or South Korea would come in, then Admiral and/or Amur would also go. Could it be like this, in the foreseeable future?

 

[Toro2017]

As mentioned in the Jokerit thread, Lempinen has a good reputation: Jokerit 2018-2019 - I Am, We Are! I haven't seen the exact quote for the Monaco thing though.

It was mentioned in helsingin sanomat.

Uutta tietoa on se, että Monacoon on hankkeilla KHL-seura, jolle suunnitellaan kotiareenaa Helsinki Gardenin piirustuksia noudatellen.

--> New information (in the book) was that there is plans for team in Monaco, to which there is a plan to build a home arena following the plans of Helsinki Garden (hockey arena planned in Helsinki).

 

[hansomreiste]

Vityaz and Neftekhimik maybe but I can't see Torpedo and Sochi leaving, to be honest. Well, maybe even Sochi to a degree, but there is no way Torpedo is going out. They will have their new arena in next couple of years and they hail from one of the most developed cities of Russia. A Russian-based international league without a team from Nizhny Novgorod but with one from Monaco sounds... displeasing, to say the least. Other than that, the idea of three conferences is intriguing. Again, I strongly believe Monaco will be a springboard but still it sounds so stupid.

 

[Toro2017]

Vityaz and Neftekhimik maybe but I can't see Torpedo and Sochi leaving, to be honest. Well, maybe even Sochi to a degree, but there is no way Torpedo is going out. They will have their new arena in next couple of years and they hail from one of the most developed cities of Russia. A Russian-based international league without a team from Nizhny Novgorod but with one from Monaco sounds... displeasing, to say the least.

Well, if they get the teams from Germany and France, then maybe they would be ready to give up on Slovakia and/or Latvia.

Other than that, the idea of three conferences is intriguing.

They have been talking about it, because they would want cut travelling cost and in that model teams from "Central" Conference would play against everyone, in the regular season, but teams from "West" and "Pacific" would not play against each other in regular season, and probably not even in playoffs, unless teams from both those conference would go all the way to the Gagarin cup finals.

 

[GindyDraws]

My one issue is... what would they use for a "Pacific" conference? Obviously, they got the Amur/Vladivostok/Beijing trio set up, but what else could they incorporate? There's no suitable arena in Ulaanbaatar or any of Mongolia, but they could add another team in Kazakhstan (like in Almaty), and maybe add another in China, although I am not sure about expanding upon the Chinese hockey endeavor just yet.

My one biggest fear is them panicking and promoting Metallurg Novokuznetsk back to the KHL just to fill this new divisional model. Being demoted to the Supreme Hockey League where they could actually compete at a level of experience (and thus allow for players to actually stay in their program) and maybe finally become something was the best thing the team has had in decades. Becoming a punching bag once more where nobody will stay will only bring back all the problems Kuznya had during the KHL tenure.

 

[vorky]

Someone in jatkoaika.com already made somekind of draft of the possible future, with the current expansion rumors. Ofcourse some teams needs to make way, if they want 24 teams and those expansion teams (second from China, Taskent, Germany and Monaco).

West Conference
Euro division:
Monaco
Hamburg
Slovan Bratislava
Dinamo Riga

West Russian division:
Jokerit
Dinamo Minsk
SKA
Lokomotiv Jaroslav

Central Conference
Capital division:
ZSKA
S.Moscow
D.Moscow
AK Bars Kazan

Ural division:
Magnitogorsk
Jekaterinburg
UFA
Tsheljabinsk

Pacific Conference
Far-East division:
Barys Astana
Avangard Omsk
Taskent
Sibir

Asian Division:
Kunlun
Shanghai
Admiral Vladivostok / Tokio
Amur Habarovsk / Soul

So in this model Sochi, Vitjaz, Torpedo and Neftehimik would go. If Japan and/or South Korea would come in, then Admiral and/or Amur would also go. Could it be like this, in the foreseeable future?

A very wrong draft. It must be done by someone who has no clue about the KHL.

 

[Toro2017]

A very wrong draft. It must be done by someone who has no clue about the KHL.

So what kind of draft would you make from the rumors that there is now. We know for sure that KHL wants teams from Germany and France (ofcourse we dont know, if they are going to get them). We also know, that they want to expand further to Asia. KHL has told us, that they want only 24 teams and possible divide those teams to 3 conference (and possible to 6 division).

 

[vorky]

So what kind of draft would you make from the rumors that there is now. We know for sure that KHL wants teams from Germany and France (ofcourse we dont know, if they are going to get them). We also know, that they want to expand further to Asia. KHL has told us, that they want only 24 teams and possible divide those teams to 3 conference (and possible to 6 division).

I will tell you what is the problem here

The KHL Board of Directors has never decided the league will be divided into 3 conferences. It is just ONE of many considered options. You need to know that a special commission will consider various options for the divisional model soon. So, no final decision has been done yet, even though the media have presented it as facts in some cases.

It is wrong to think Sochi, Admiral, Amur and Torpedo "would go." You need to know that Chernyshenko proposed Admiral as a team for leaving at the latest KHL BoD meeting. The Board decided to keep Admiral.

We will see.

 

[Toro2017]

I will tell you what is the problem here

Well it seems that you did not understand the post, you quoted. It was about possible future. So pure speculations. We know that KHL wants to expand to Germany and France (right?). Also towards Asia (right?). We also know that KHL would prefer to be competiton for 24 teams (right?). You do understand that if KHL wants to have teams from Germany, France and second team from China and at the same time not to increase the numbers of teams, that some teams needs to go? 25+3 is not 24 (right?). So which teams would you think might have to go, if KHL gets those three new teams and wants to keep the numbers of teams in KHL at 24 (or 25)? Very simple question. If you are (for some reason) unable to speculate on the future, then dont waste the times of those that are ready to speculate.

Since we dont have any facts of possible expansion, only the desires/dreams of KHL (France, Germany and Asia), I dont know what else there is to talk about in this thread than speculate on the future.

 

[vorky]

So which teams would you think might have to go

Definitely not Sochi, Admiral, Amur and Torpedo. If you named Severstal, Vityaz, Neftekhimik, I would say nothing.

It was never said that the KHL will have 24 clubs forever. Of course, the KHL will expand if the expansion benefits the league financially and sports-wise. If the expansion happens in 2020 or 2025 or 2030 is another question, which can not be replied now.

As you correctly said, we do not have inside information regarding the expansion. But we can conclude that the interest comes from many countries because the league considers the launch of the Far-East Division and the Western European Division.

Those who do not know, German corporate SAP signed the deal with the KHL. Their HQ is located near Mannheim.

 

[Jussi]

SAP Sports Sponsorships

SAP is more about promoting it's analytic software programs than "owning" teams.

 

[hansomreiste]

SAP Sports Sponsorships

SAP is more about promoting it's analytic software programs than "owning" teams.

Honestly, they don't need to own the team. A reliable, long-term sponsorship deal goes a long way in securing an investor. SAP has a lot of business in sports so they may play an important role. Though as much as I'd love to see a German team in KHL, hopefully from the eastern part of the country like Berlin, I believe they (KHL) need local-like rivalries to make it interesting or simply go for very multicultural cities like Berlin, Hamburg, Köln etc. I'm sure many hockey fans will be interested in a good game between Jokerit and Hamburg BUT European fans need rivalries in the long run. Some kind of historical connection or a common past, you know. Since we can't add five teams from each league, I hope they'll chase after some Austrian and Czech clubs as well. Kinda lika dick-measuring contest between western Europeans of KHL. Would be cool.

I think the main headache for KHL for now is the fact that they are extremely unwilling to kick eastern teams, quite understandably. If you will expand without kicking some teams, then you definitely will have to get over 24 teams. Adding a few to western and then switching some western teams to eastern conference is unlikely to work as well - imagine how absurd it'd be for Loko and Moscow teams to play in western conference.

If they see the light for an expansion, I believe KHL will not be so keen on keeping the competition at 24 teams. As vorky said, as long as the clubs are decent enough to be in KHL, there can be even 28 or 29 of them. Nobody would complain. Regardless, we will probably not see an expansion till 2021/22 season. Still a long way to go.