KHL Expansion Part VIII

[Barclay Donaldson]

@Barclay Donaldson
Check your facts.

Those are the facts. IIHF - European attendance ranking

DEL clubs have constantly been linked by pro-KHL/continental hockey people like yourself for well over a decade. None have joined. They're actually doing better by themselves than the KHL I might add. They have higher average attendance, despite paying far less in salary, and are financially solvent. These are facts. Shame how they are more popular and also don't need to be bankrolled by government-owned companies.

Russia and Eastern Europe is unlike the rest of Europe. If the business doesn't make money, and hockey leagues and teams at the end of the day are businesss, then the business closes up shop. Having government sugar daddies bankroll teams isn't a legitimate business practice.

 

[Barclay Donaldson]

Or could it be some DEL team that would be in financial troubles and russian money would be the last lifeline? Some people in Finland are talking that this was the case with Jokerit, or to be precise with their hockey arena (hartwall areena). It is rumored to have been in big financial troubles and russian money was the last lifeline and some people speculate that the same case was with Espoo Blues (which was finnish KHL candidate before Jokerit). So Jokerit got the lifeline and Espoo was left without it. Jokerit is still alive, but losing money heavily (+10 million euros per year) and Espoo Blues is buried.

I considered that, but I think it highly unlikely. No DEL team is in a big need for money now or in the long-term future. They closely regulate finances and licenses, especially since the incidents involving Hamburg Freezers and the original Frankfurt Lions. The only league financial complaint I can recollect is that they want more money for off-ice staff, I can only assume to attract higher quality in positions like general manager or scouts, and they think that coach and player salaries are acceptable. And in the highly unlikely scenario they need money, the team would dissolve instead, as is normal (non-Russian) business practice.

 

[TheWhiskeyThief]

Having government sugar daddies bankroll teams isn't a legitimate business practice.

Lots of Finnish & Swedish teams have government sponsorship. Kalpa, Karpat, SAIK Leksands & Mora off the top of my head. Not to the level of KHL teams, but still happens.

 

[Barclay Donaldson]

Lots of Finnish & Swedish teams have government sponsorship. Kalpa, Karpat, SAIK Leksands & Mora off the top of my head. Not to the level of KHL teams, but still happens.

I'm not sure about KalPa or any other Finnish team of government-owned companies sponsoring the teams. But if it is present, then the difference is that the government sponsorship is one of many stable sources of sponsorship income, rather the team leaning on it as the biggest sole source of revenue. Just taking KalPa as one example, I know Ponsse, Clas Ohlson, and Savon Sonomat have sponsored them for a long time and I'm fairly certain they still do. Keitele is a forestry company, Kuopion Energia is still a big sponsor, Laakonen is a car company, Terveystalo is healthcare, Jazura is some sort of Malaysian elevator company.

If it is present, then you're correct that it is not nearly as much as the KHL teams, but it's also much more legitimate since their sponsorship income is diversified.

 

[Jussi]

Or could it be some DEL team that would be in financial troubles and russian money would be the last lifeline? Some people in Finland are talking that this was the case with Jokerit, or to be precise with their hockey arena (hartwall areena). It is rumored to have been in big financial troubles and russian money was the last lifeline and some people speculate that the same case was with Espoo Blues (which was finnish KHL candidate before Jokerit). So Jokerit got the lifeline and Espoo was left without it. Jokerit is still alive, but losing money heavily (+10 million euros per year) and Espoo Blues is buried.

It's not even a rumor when Harkimo has said it himself. He didn't want to leave his sons with the burden that is Hartwall Arena.

 

[vorky]

@mkev400

I do not want to talk politics as well. But, I will use your Nord Stream II example. The most important is if the project is done. Of course, there have been many problems with European countries being against the project, but it will be built at the end of the day. Now, replace "Nord Stream II" with "KHL" It may take some time, but it will be done.

Regarding Tripke. Your explanation might be correct. But mine has its reasoning as well. Especially if we talk about a DEL club. But even if we talk about German´s Lev. The DEL must be informed in advance. And btw, why did not a Swede travel to Astana? A Swede was the CHL´s boss at the time. Or even Baumann? Yeah, the KHL needed to talk to the DEL´s boss ....

Of course, I may be wrong. But I see Tripke and Reindl in the same position as Kurri was before joining. He attended some KHL games, especially in St.Petersburg. Now, Kurri is KHL BoD member.

It is indisputable that German/French etc players are free to play for their country. The KHL does not own their players like the NHL (Olympics 2018).

The KHL needs approval from national federation (Reindl, Tardiff) to expand there. So, negotiating with these guys.

Regarding Hamburg. First, thank you for the useful information about the local sports culture.

I mentioned Hamburg as an ideal scenario but two or three reasons - 1) no DEL team there, 2) many Russians in the city/area, 3) great arena

The KHL published an interview with Kotschnew yesterday. He talked about the hockey in Hamburg, how local fans miss elite hockey league. He said a DEL or even KHL club would be well attended in Hamburg. Earlier, Chernyshenko said there were talks with "a DEL club from Hamburg at the time of folding of the team." So? 2016? The deal was not reached for whatever reason. What was a key reason for no deal? Sanction?

I get your point with US owner of the Hamburg arena. On the other hand, Hartwall Arena is owned by you know whom.... and the NHL played there. Who operates/owns the Cadillac arena in Beijing (the first KRS games ever)? Or
AccorHotels Arena (their delegation was at KHL ASG 2019), they talked about potential KHL World Games in Paris.

Yes, sanctions are a problem, but business is business.

That is fine what you said about ZSC. I just compare totally different approach by ZSC and Vienna Capitals to the KHL World Games.

Regarding the arena standards. I do not say Berlin etc have inferior venues, the opposite is true, they have great venues. But, the DEL and the KHL arena standards are different. Some changed would be needed.

I know that EBEL and DEL are different, I believe DEL is on a higher level. But, since we talk Vienna Capitals and the KHL World Games. Some guy from Capitals, director or so (you can find on YT), was surprised by the KHL venue standards when asked at the press conference. And Vienna Capitals played even the CHL.

Hartwall Areena is great. Have not been done any minor change in the arena since the club joined the KHL? That is the point.

SAP deal is very important. It is the first big corporate from Western Europe to be the KHL´s partner. Apparently, they see potential in the KHL. Of course, primary for their business. They would never be a partner of a league, who will collapse within a few years.

It is great that SAP guys and their colleagues can attend the KHL games. As Bykov said, I took my friends from a Swiss club, where I am a board member, to watch a SKA game in St.Petersburg ... just speculation, you know. Still weird that the Swiss club officials wanting to watch a KHL game.

We will see.

PS: No, I do not think Adler or Fribourg to join the KHL. No indications for this scenario.

 

[Albatros]

The Freezers were bankrolled by the Anschutz Entertainment Group who got fed up with losing money in the DEL with two teams, so they axed the worse of the two (as much as it pained me. Loved going to games there). And in the aftermath, no one wanted to step up and save the team, and fan support just wasnt enough to keep them alive, as was the case in like Dusseldorf where Fans, celebrities and business owners came together to save the DEG. Same happened to the Hamburg Handball team, they went broke. Beyond Football there doesnt seem to be enough corporate willingness to support anything else but Football, and the losses in the Handball-Bundesliga or the DEL are much smaller than in the KHL, so I would question the viabillity of Hamburg as a team (Plus the arena is owned and managed by Anschutz still). As for current DEL teams, I just don't think there is the willingness.

Not to mention also the Crocodiles playing in the 3rd tier Oberliga have enormous ongoing financial difficulties, and although they have not suspended operations so far, still it is clear that Hamburg remains a dysfunctional professional hockey market where no team has managed to reach sustainability.

 

[Jussi]

The Freezers were bankrolled by the Anschutz Entertainment Group who got fed up with losing money in the DEL with two teams, so they axed the worse of the two (as much as it pained me. Loved going to games there). And in the aftermath, no one wanted to step up and save the team, and fan support just wasnt enough to keep them alive, as was the case in like Dusseldorf where Fans, celebrities and business owners came together to save the DEG. Same happened to the Hamburg Handball team, they went broke. Beyond Football there doesnt seem to be enough corporate willingness to support anything else but Football, and the losses in the Handball-Bundesliga or the DEL are much smaller than in the KHL, so I would question the viabillity of Hamburg as a team (Plus the arena is owned and managed by Anschutz still). As for current DEL teams, I just don't think there is the willingness.

And because he's American, he can't be associated with people on sanctions lists, so that rules out a lot, if not all, potential Russian backers.

 

[Jussi]

Lots of Finnish & Swedish teams have government sponsorship. Kalpa, Karpat, SAIK Leksands & Mora off the top of my head. Not to the level of KHL teams, but still happens.

Curious, what exactly are the "government sponsors" for Kalpa and Kärpät?

 

[Jussi]

I get your point with US owner of the Hamburg arena. On the other hand, Hartwall Arena is owned by you know whom.... and the NHL played there.

Different issue. Sole US ownership vs ownership "hidden" behind a front ownership of one of the Rotenberg offspring not on sanctions list and only two games played. Arena Events ownership meanwhile is already steering big names in entertainment away from Hartwall Arena. A multi year contract with a Russian financial backer/owner with potential sanctions list issues is not something Anschutz is going to take a risk with.

Nordstream 2 hit a new hurdle with Denmark so that's not happening anytime sooner.

 

[Toro2017]

The 2 million Jokerit got from CKA for Moses was more than likely plugged into their hockey operations, reduce their insane financial loses, or invested into their youth program rather than player replacement.

So should I assume that your answer would be that Liiga feels more like a colony to north america than Jokerit feels like a colony to Russia, because of speculation were those 2 millions went? or what would be your answer to the question?

 

[Rigafan]

Regarding the arena standards. One of the Russian players (i'd have to search who it was) said on an interview that the arena in Austria was " nothing special and like one of the ones I played in as a junior in Russia"

 

[Jussi]

Do you have any concrete examples of a Liiga team becoming stronger by losing players for trinkets?

It's better to get a compensation from the NHL that is far higher than the developmental cost and salary of the player, than to lose players for nothing to KHL. We've been a developmental league for a couple of decades already and that isn't going to change, at least the ones going to NHL become better players that actually can do something for us in major international tournaments rather than disappear out of the picture like the KHL ones.

 

[Albatros]

It's better to get a compensation from hte NHL that is far higher than the developmental cost and salary of the player

Is it though? For the best talents like Laine or Barkov they get a transfer fee of around 200,000 euros which is in salary terms one season of a fairly good player like Jani Tuppurainen. It's a massive loss no matter how you look at it. In the case of Riikola or Suomela it's perhaps less dramatic, but still not a good deal.

at least the ones going to NHL become better players that actually can do something for us in major international tournaments rather than disappear out of the picture like the KHL ones.

On the contrary the ones playing in the KHL can represent Finland in those international tournaments, while NHL players generally can not regardless of their level. Losing players to the KHL is obviously not optimal either for Liiga, but for the national team it is a lot, lot better.

 

[TheWhiskeyThief]

Curious, what exactly are the "government sponsors" for Kalpa and Kärpät?

Kalpa: Kuopio Energy & I Kuopio(Kuopio city government)
Kärpät: Oulun Energy

 

[TheWhiskeyThief]

Regarding the arena standards. One of the Russian players (i'd have to search who it was) said on an interview that the arena in Austria was " nothing special and like one of the ones I played in as a junior in Russia"

The rink in Vienna is bog standard, but they have a new arena in planning stages that will be north of 15000 for hockey. Site selection completed, I believe the architect has been selected.

 

[Toro2017]

does not mean that there should not be a proper compensation for all this.

By the way, if instead of NHL a young players chooses to go to KHL (after his current contract), how much money do the "breeder" team get?

 

[Albatros]

In Finland the solidarity fee for KHL players under the age of 23 is calculated per game according to the status of the player.

 

[Jussi]

Kalpa: Kuopio Energy & I Kuopio(Kuopio city government)
Kärpät: Oulun Energy

Those are not "government" but local companies. Like Lukko has had TVO for years.

 

[Jussi]

These professional teams are run by their non-profit registered associations, season fees paid by parents in the juniors by no means alone run the operations. Not even financially, and additionally one has to count in the enormous amounts of unpaid work done by club members which is really in the core of any junior organization. Not wanting to stay on the way of the players does not mean that there should not be a proper compensation for all this.

You're mistaking the Liiga organizations and junior organizations. They're separate entities. They collect season fees and organize events to raise funds. Players have to pay for their equipment for themselves. Coaches are often on the payroll of the registered associations or work pro-bono (more in the lower level regional junior clubs). I know several people here who exactly that. They don't get paid for coaching kids, often their own sons or daughters. There's been a couple of researches in recent years about the cost of raising a Liiga level players and it costs something like 60K to 80K euros to the parents.

 

[Albatros]

Only on paper in the cases of Lukko, Ässät, and some others where the junior organization controls the professional organization.

 

[Jussi]

Only on paper in the cases of Lukko, Ässät, and some others where the junior organization controls the professional organization.

No, the registered associations can't have control over Liiga teams anymore, the clubs have to be limited companies now. In some cases like Jokerit, the registered association has control/ownership over the club name or logo but that's it. The Liiga clubs assign coaches to the junior clubs down to a certain age group. At smaller clubs, it's more often a case of who wants to coach what age group.

 

[Albatros]

When the registered association is the sole or majority owner of the limited company then it has control over it.

 

[Jussi]

When the registered association is the sole or majority owner of the limited company then it has control over it.

That's not how it works...

 

[Albatros]

Eh? In a joint-stock company the shareholders call the shots, and if a singular shareholder controls all or most shares then that gives effective control over the company.