RW Matvei Michkov - SKA-1946 St.Petersburg, MHL (2023 Draft)

[1440]

After deferral, escrow & taxes?

Assuming agent fees would be about equal at 3-5% in the US and in Russia,

85m rubles equals roughly 1.16M USD, so with 13% income tax that's 1.01M USD. (I know this is his total salary, not yearly)
Assuming absolute highest case numbers of 55% for taxes and 20% for escrow, 3M would be 1.08M USD.

Ok, so these are roughly equivalent values. How much is the cost of living? Again we will assume high end on the NHL side, so let's take New York versus Saint Petersburg.

For basic items, such as food, restaurants, rent and transportation, USD $1,000 in SP will get you as far as $4,000 does in NY. (Cost of Living Comparison Between New York, NY, United States And Saint Petersburg, Russia)

One important point to think about on the cost of living side is relative versus absolute cost. Sure the relative cost of living in NY is much greater in relative terms, but for someone making roughly $100,000, the difference in paying $5,000 a month in SP versus $20,000 a month in NY for a lavish lifestyle would not be very large in absolute terms as you would still be banking ~80% of your monthly take-home, which is a superb saving rate.

Another important factor is the inflation rates of both currencies. To keep it brief, USD $1 was worth ~₽30 in 2010, compared with ~₽75 in 2020. The value of a ruble has not at all kept pace with the USD these last 10 years, so depending where you think both currencies may be headed, over a 10-20 year hockey career this could be as important a factor as any.

All told, what do these numbers tell us?
If you are a middling to low end NHL player playing in an unfavorable tax situation in an expensive city, then yes, playing in the KHL could save you money.
If you are playing in Las Vegas or some other state with low tax rates, it probably won't be worth it to play in the KHL.
If you are a star player making >$9M per year (which Michkov will likely eventually be), given that the top KHL salary is equivalent to <$3M, it probably won't be worth it to play in the KHL.

This just makes sense with what we see players do most often. It makes sense for bottom 6 Russian players to stay at home because of lower tax rates and cheaper cost of living, but it makes sense for star players to play in the NHL because the difference in the highest salaries trump those factors.

At a certain point a player has to take into account how much playing in their home country versus playing in a foreign nation and playing in leagues with different skill levels and styles of play should be valued.

Another potentially important factor in the NHL's favour would be endorsements and global exposure. If Michkov ends up being an Ovechkin caliber player, he could be set to also receive advertising deals in the order of ~$5M a season, which could be a huge boon to his base salary.

Assuming Michkov ends up being as good as we think he is, he would almost certainly be leaving a lot of money on the table to play in the KHL over the course of his contract.

 

[Pavel Buchnevich]

I’m all for players staying in Russia until they are ready to be contributors in the NHL, but this is a very shortsighted decision. I don’t know who is advising him or if anyone is, but unless this guy has completely decided that he wants nothing to do with leaving Russia until he’s 21, this makes no sense. And even if he wanted that, would you know that five years in advance?

Unless there’s something about this contract that we don’t know, he gave himself no flexibility. This patriotic stuff and entertaining his country stuff is all nonsense. He doesn’t owe anyone anything. Any fan of a specific country’s hockey program should want their best players playing at the highest possible level. How anyone could want a guy whose way too good for the KHL to play in the KHL for selfish reasons makes no sense to me because it likely doesn’t maximize his ability to develop his game. Do you care more about the player succeeding or watching him play as many games as you can at a good hour of the day? It’s not even selfish reasons at that point.

Maybe this won’t end up being that big of a deal. If Michkov isn’t a superstar player who can step into the NHL and be a star in his first year or two, it doesn’t really matter. If that’s the case, the KHL wouldn’t be too weak of a league for him in his first three seasons after being drafted. But if this guy is ready to play in the NHL right after being drafted, this will likely be really bad for his development. Hopefully SKA would do him a favor and agree a mutual contract termination.

I can’t see him being a top 2-3 pick now. No team is going to pick a player in the top 2-3 who won’t be part of the team for at least three years. The GM might not have a job in three years. They aren’t going to wait that long. If Michkov is a 1OA type of talent, maybe he’ll go 4-5. Otherwise, I think he’ll be a top 10-15 pick. Even in that range he’ll be a controversial pick.

 

[wings5]

I’m all for players staying in Russia until they are ready to be contributors in the NHL, but this is a very shortsighted decision. I don’t know who is advising him or if anyone is, but unless this guy has completely decided that he wants nothing to do with leaving Russia until he’s 21, this makes no sense. And even if he wanted that, would you know that five years in advance?

Unless there’s something about this contract that we don’t know, he gave himself no flexibility. This patriotic stuff and entertaining his country stuff is all nonsense. He doesn’t owe anyone anything. Any fan of a specific country’s hockey program should want their best players playing at the highest possible level. How anyone could want a guy whose way too good for the KHL to play in the KHL for selfish reasons makes no sense to me because it likely doesn’t maximize his ability to develop his game. Do you care more about the player succeeding or watching him play as many games as you can at a good hour of the day? It’s not even selfish reasons at that point.

Maybe this won’t end up being that big of a deal. If Michkov isn’t a superstar player who can step into the NHL and be a star in his first year or two, it doesn’t really matter. If that’s the case, the KHL wouldn’t be too weak of a league for him in his first three seasons after being drafted. But if this guy is ready to play in the NHL right after being drafted, this will likely be really bad for his development. Hopefully SKA would do him a favor and agree a mutual contract termination.

I can’t see him being a top 2-3 pick now. No team is going to pick a player in the top 2-3 who won’t be part of the team for at least three years. The GM might not have a job in three years. They aren’t going to wait that long. If Michkov is a 1OA type of talent, maybe he’ll go 4-5. Otherwise, I think he’ll be a top 10-15 pick. Even in that range he’ll be a controversial pick.

If teams pass on him , he should make them look dumb . The contract may be at most one year too long but most draft players aren't ready to come in and contribute at 18 anyways. Ovi came at 20 and he still was much more physically developed than Michkov. Like Marner and Patrick Kane, players of similar stature Michkov can very possibly be ready to contribute at 19 as well but whatever it is what it is. Much rather him overcook over there than come over to early like Filatov or go to the CHL like Yakupov.

 

[Pavel Buchnevich]

If teams pass on him , he should make them look dumb . The contract may be at most one year too long but most draft players aren't ready to come in and contribute at 18 anyways. Ovi came at 20 and he still was much more physically developed than Michkov. Like Marner and Patrick Kane, players of similar stature Michkov can very possibly be ready to contribute at 19 as well but whatever it is what it is. Much rather him overcook over there than come over to early like Filatov or go to the CHL like Yakupov.

If you pick a player in the top five and they don’t play in the NHL until their D+4 season you’d be near sure they are a bust. If you are picking a player in the top five, they should be NHL ready in their D+2 season, if not earlier.

He won’t prove teams wrong in that scenario. If McDavid did the same thing, I wouldn’t pick him in the top few picks. A GM doesn’t have unlimited time in the job. They could be fired before the player signs. You absolutely cannot take such a big risk with a top 2-3 pick.

 

[ClarkBolzano]

I have a few questione. If Michkov comes to the nhl at 21, has He to sign a 3 year elc or can he sign a "normal" contract? And If He has to sign an elc, and If He has proven to be at that age a true Superstar, could he sign an elc with a 8 or 9 milion bonus a year?

 

[Spade]

I have a few questione. If Michkov comes to the nhl at 21, has He to sign a 3 year elc or can he sign a "normal" contract? And If He has to sign an elc, and If He has proven to be at that age a true Superstar, could he sign an elc with a 8 or 9 milion bonus a year?

ELC, and there's a limit on bonuses on ELCs which is why you see the max cap hold being around $3.7 million for rookies (and usually only 1st overall picks). Even McDavid who accomplished all his schedule A and schedule B bonuses (schedule A is statistics such as games played, up to a maximum of roughly $800,000. Schedule B is awards such as MVP, Calder, or end of season All-Star teams, up to a maximum of around $2 million). All the bonuses can be negotiated as far as what the player needs to accomplish but they don't work on a sliding scale, you either negotiate a $200,000 bonus for 60 games played and get it or don't.

Because Michkov would be just 21, he'll have to sign a 3 year ELC. And the bonuses don't apply retroactively, so he only be paid his max starting the season in which he actually accomplishes his schedule bonuses.

Bonuses have limits that are written in the CBA but 35+ vets get a way better bonus schedule.

 

[Treb]

If teams pass on him , he should make them look dumb . The contract may be at most one year too long but most draft players aren't ready to come in and contribute at 18 anyways. Ovi came at 20 and he still was much more physically developed than Michkov. Like Marner and Patrick Kane, players of similar stature Michkov can very possibly be ready to contribute at 19 as well but whatever it is what it is. Much rather him overcook over there than come over to early like Filatov or go to the CHL like Yakupov.

The only reason Ovechkin started in his D+2 season is the NHL lockout. He would have been ready in his D+1 (hell, he probably would have been in his draft season as he is a late birthday and would have been a 2003 draft pick if born 1 day sooner).

If Michkov lives to the hype some are expressing here, he should be NHL ready for 2023-2024.

The last 1st overall to not play after his draft was Erik Johnson (played in his D+2) in 2006. Then you have Ovechkin due to the lockout. After that, you have to go to Chris Phillips in 1996.

 

[alko]

That means, he wont break Ovies all-time goal scoring record? Sad...

 

[Jabs102501]

 

[Kshahdoo]

And now he got an assist.

 

[majormajor]

This is more of a geography of hockey question than Michkov, excuse me for going off topic. Why doesn't Perm have a KHL team? It is the most northerly big city in that section of the country, and there are several teams from much smaller cities further south. I also don't think I've seen many players from Perm, either, Michkov might be the first I've noticed.

I'm guessing Perm just doesn't have a big corporate sponsor wanting to own a KHL team? Are folks there just less interested in hockey?

 

[Tenkkapoo]

This is more of a geography of hockey question than Michkov, excuse me for going off topic. Why doesn't Perm have a KHL team? It is the most northerly big city in that section of the country, and there are several teams from much smaller cities further south. I also don't think I've seen many players from Perm, either, Michkov might be the first I've noticed.

I'm guessing Perm just doesn't have a big corporate sponsor wanting to own a KHL team? Are folks there just less interested in hockey?

At least the former Dynamo Moscow dman Dmitry Filimonov is from Perm. He spent a short stint with Ottawa and made the Soviet 1991 Canada Cup team (which was kind of a joke team anyway).

 

[vvann]

I'm guessing Perm just doesn't have a big corporate sponsor wanting to own a KHL team?

Their big corporate sponsor's owner has just bought a seat on Formula 1 team Haas for his son (Nikita Mazepin). Not interested in hockey.

By the way, the head coach of SKA-1946 Lev Berdichevsky is from Perm.

 

[Atas2000]

This is more of a geography of hockey question than Michkov, excuse me for going off topic. Why doesn't Perm have a KHL team? It is the most northerly big city in that section of the country, and there are several teams from much smaller cities further south. I also don't think I've seen many players from Perm, either, Michkov might be the first I've noticed.

I'm guessing Perm just doesn't have a big corporate sponsor wanting to own a KHL team? Are folks there just less interested in hockey?

Perm is very much a hockey city. They indeed just lack a sponsor to carry a KHL team. Not a knock on you or your question, but there quite a few more notable hockey regions in Russia without KHL representation. It is just what developed historically partially. Perm has a hockey team since 1948, but for the most of time they were not in the top tier, but in the 2nd tier soviet league. They still do have a strong hockey tradition and every now and then there are top level hockey players who hail from Perm originally.

My AkBars is the reverse example. 2nd tier team in soviet times, just as Perm. But then with the sponsorship and the local government interested in sports development it all grew very quickly and all of a sudden we had a top tier teams in hockey, basketball, football, voleyball, also winning championships left and right. Now we are one of the spoiled with success fanbases.

As for the how far north any city is, it is quite irrelevant for Russia as only the most southern parts are obviously below the typical hockey belt, i.e. with cold winters and kids playing hockey outdoors. Sochi is the odd case here. All because of the Olympics and the facilities built for it a KHL team was created as a league project of sorts. Somewhat similar to NHLs attempts to win southern markets, just on a smaller scale. And just as some NHL southern franchizes Sochi produces it's fair share of headaches for the league. Low attendance, financial worries, but "we want to promote hockey there" and all... Hence our monthly debates with russian posters here on who's de facto farm team Sochi is in the KHL.

 

[SoundAndFury]

As all KHL teams, they would need a money source and a suitable arena. They have neither. In general, city just doesn't seem to have the money for that sort of thing. Even their VHL team is pretty terrible.

Regarding player development, they aren't doing great, for whatever reason. Basically, the only decent active player they have is Golyshev.

 

[ClarkBolzano]

ELC, and there's a limit on bonuses on ELCs which is why you see the max cap hold being around $3.7 million for rookies (and usually only 1st overall picks). Even McDavid who accomplished all his schedule A and schedule B bonuses (schedule A is statistics such as games played, up to a maximum of roughly $800,000. Schedule B is awards such as MVP, Calder, or end of season All-Star teams, up to a maximum of around $2 million). All the bonuses can be negotiated as far as what the player needs to accomplish but they don't work on a sliding scale, you either negotiate a $200,000 bonus for 60 games played and get it or don't.

Because Michkov would be just 21, he'll have to sign a 3 year ELC. And the bonuses don't apply retroactively, so he only be paid his max starting the season in which he actually accomplishes his schedule bonuses.

Bonuses have limits that are written in the CBA but 35+ vets get a way better bonus schedule.

Thanks

 

[Atas2000]

Sorry to kill another conspiracy theory.

Мичков о 5-летнем контракте со СКА: «Надеюсь, правильное решение. Пока меня все устраивает»

He had COVID, then someone from the family got it too so he had to be quaranteened for another 14 days. That's why he has missed a whole month.

And oh, BTW he is happy with his new contract.

 

[Ryan Van Horne]

If teams pass on him , he should make them look dumb . The contract may be at most one year too long but most draft players aren't ready to come in and contribute at 18 anyways. Ovi came at 20 and he still was much more physically developed than Michkov. Like Marner and Patrick Kane, players of similar stature Michkov can very possibly be ready to contribute at 19 as well but whatever it is what it is. Much rather him overcook over there than come over to early like Filatov or go to the CHL like Yakupov.

Michkov is a late birthday, so he will be a year older when he's drafted, just like Ovechkin was. If Ovie was ready at 20, Michkov will be, too. He will be forgoing the opportunity to play in the NHL for three seasons (20 yo, 21 yo, and 22yo seasons) but when he arrives and signs an ELC, it will be of shorter duration -- by one year -- because ELCs signed at age 21 and 22 are only two years long.

 

[Kshahdoo]

Sorry to kill another conspiracy theory.

Мичков о 5-летнем контракте со СКА: «Надеюсь, правильное решение. Пока меня все устраивает»

He had COVID, then someone from the family got it too so he hat to be quaranteened for another 14 days. That's why he has missed a whole month.

And oh, BTW he is happy with his new contract.

Yeah, and what did you expect a 16 yo player said? I mean, some players don't know shit about life being twice as old.

 

[Habs76]

Yeah, and what did you expect a 16 yo player said? I mean, some players don't know shit about life being twice as old.

Really tho. Typically you don't want to quit job five days after accepting the job offer.

 

[Atas2000]

Yeah, and what did you expect a 16 yo player said? I mean, some players don't know shit about life being twice as old.

The real question is why people expect it to be otherwise just because.

 

[SoundAndFury]

The real question is why people expect it to be otherwise just because.

Probably because it's a ridiculously terrible contract if reports are indeed true. I still can't quite believe it.

 

[ijuka]

It also cuts his ELC from 3 years to 2. Financially, this was almost certainly a good move. From a developmental perspective.. probably not.

How so?

So let's assume that he's a 1st overall player and performs like one in NHL.

Now:
Season:
1 KHL
2 KHL
3 KHL
4 ELC(2-3mil inc bonus)
5 ELC(2-3mil inc bonus)

If he didn't sign past 22-23:
Season:
1 ELC(2-3mil inc bonus)
2 ELC(2-3mil inc bonus)
3 ELC(2-3mil inc bonus)
4 Extension(10mil?)
5 Extension(10mil?)

KHL would need to pay quite handsomely for it to be beneficial financially, like best-paid player in KHL handsomely. And that's quite unlikely for a player who just turned 16.

What this contract signifies is one of:
1. He's being dumb(most likely)
2. He's not confident in his ability and wants insurance
3. He prefers living in Russia over North America just that much

 

[SoundAndFury]

KHL would need to pay quite handsomely for it to be beneficial financially, like best-paid player in KHL handsomely. And that's quite unlikely for a player who just turned 16.

If you read it all at the time I was thinking the contract is 85 million per year, as in a 6 million dollar contract.

Also, with this 5 year extension, by the end of it he will almost certainly have the leverage to sign in the spring and burn the year of his contract that way. Which means he can sign that 10 million dollar extension after just 1 year on 2-3 mil ELC.

 

[Atas2000]

Probably because it's a ridiculously terrible contract if reports are indeed true. I still can't quite believe it.

What is terrible about it? It is nothing any other 16 year old would possibly get. Michkov is getting treated according to his talent.