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How Strong (Financially) is the KHL?

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12-04-2012, 01:20 AM
  #1
saskriders
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How Strong (Financially) is the KHL?

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12-04-2012, 02:01 AM
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danishh
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it's not currently a viable business.

it is currently held together by billionaires enabling it through their largesse.

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12-04-2012, 03:31 AM
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If you believe what you read, not very good. Organized crime money, Gas and Government money. The KHL has a very poor economical model that is kept going by a billionaire who loves Russian hockey and a Government who wants to show that the NHL can be challenged.

Give the league 10 years or so and it will probably finds its legs with a real economical system.

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12-04-2012, 04:04 AM
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Right now, it's getting pushed by billionaires who actually love the sport, doesn't matter really where the money is from, it will be strong. Even if it's not strong now, i dont see it losing traction at all. Only way is up. Wish I could say the same about the NHL

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12-04-2012, 04:43 AM
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Tomas W
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It is strong in some sence and weak in others. Unreliable I would say. But its enough money to keep a lot of russian prospects at home.

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12-04-2012, 05:29 AM
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Quote:
Originally Posted by ozzie View Post
Give the league 10 years or so and it will probably finds its legs with a real economical system.
I guess it depends on what the end goal is. If it's just another variation of the SEL or one of the Finish leagues, then yes perhaps within 10/15 years - if that's what they're trying for. If it's something that can actually rival the NHL, then no I don't see that happening that soon.

According to a wiki article in 09/10 they had a 200m (rubles) cap floor and a 620m soft cap (5.9 and 18.3m - however am not sure when the article was written, or how the exchange would play out). In 2012 there's also a hard cap at 36.5m.

Now from my very limited knowledge and from the very few things I've read, they do not make a lot off the gate in the KHL. And many of their arena's are smaller/older ones. I would think that's the first thing that needs to change if they actually want to try and support a 6-20m payroll (figure another 2-5m to run the team - at least). Now it's possible that with advertising and whatnot, that they can survive (at least run a break even operation) without a 15,000 seat arena - but I do not see it. They also only play 26 home games.

At some point if this league plans to ever be more than a hobby for the wealthy, they likely need to make changes. Either larger rinks (if that's even feasible, from my very limited knowledge they make/made peanuts on the gate), more home games, or a lower cap (or all 3). So while some will bash the NHL, at least most of it's owners have a chance at coming close to breaking even. I recognize that it's a lot easier to fund 8m in loses (assuming zero revenue) than it is to fund 15-25m on a regular basis... but at some point you have to wonder when one will get tired of writing cheques.

Here's some info taken from the KHL wiki page. http://en.wikipedia.org/wiki/Kontinental_Hockey_League. I also grabbed some from the RSL page, however when looking at arena sizes, I deferred to the KHL page/data.

Quote:
Originally Posted by wikipedia/RSL
Avangard Omsk won the Russian Superleague in 2004, which qualified them for the inaugural IIHF European Champions Cup. They would be the first winners of that competition, beating Kärpät Oulu from Finland.

The team is not owned by Russian businessman Roman Abramovich as it may be concerned. Russian oil company Gazprom-Neft partly finances the team, but the majority of its budget comes from province tax money
No clue how true that is, or how current that data is... but wow.

Arena size:
HC Slovan Bratislava - 10,115
Vityaz Chekhov - 3,300
HC Donbass - 4,130
HC Dynamo Moscow - 8,700
HC Lev Praha - 13,150
Dinamo Riga - 10,300
SKA Saint Petersburg - 12,300
HC Severstal - 6,064
HC Dinamo Minsk - 15,000
HC CSKA Moscow - 5,600
HC Spartak Moscow - 5,350
HC Atlant Moscow Oblast - 7,000
Torpedo Nizhny Novgorod - 5,500
Lokomotiv Yaroslavl - 9,000**

HC Traktor - 7,500
HC Ak Bars - 10,000
HC Yugra - 5,500
Metallurg Magnitogorsk - 7,700
HC Neftekhimik - 5,500
HC Avtomobilist Yekaterinburg - 5,500
HC Barys - 5,532
HC Amur - 7,100
Metallurg Novokuznetsk - 8,040
HC Sibir - 7,400
Avangard Omsk - 10,318
Salavat Yulaev Ufa - 8,400

HC Lada Togliatti - 6,000 *
Average size: 7,500

* Due to a lack of a satisfactory arena the KHL expelled the team. The team dropped one level to the Russian Major League (VHL) for the 2010–11 season. [Yes I realize there's more to a satisfactory arena than size]

** Club joined the VHL (2nd best Russian league) after the 2011 plane crash

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12-04-2012, 06:10 AM
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Around 12 arenas with capacity 12-20 000 is under construction now.

26 home games is due to IIHF, which will change after Sochi Games.

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12-04-2012, 08:08 AM
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Originally Posted by vorky View Post
Around 12 arenas with capacity 12-20 000 is under construction now.

26 home games is due to IIHF, which will change after Sochi Games.
How many games there will be after Sochi?

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12-04-2012, 08:18 AM
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Quote:
Originally Posted by kemisti View Post
How many games there will be after Sochi?
plan is 70-80. All depends on IIHF interntional calendar or KHL´s independence from IIHF

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12-04-2012, 08:38 AM
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some teams can afford a payroll similar to an upper tier NHL team while others can't generate enough gross revenue to buy a 4th line NHL grinder.

The revenue disparity among teams is massive even compared to NHL teams. Average attendance might match some AHL teams.

Will take another generation (at least) to become even remotely comparable to the NHL.

Their only advantage is no lockouts or strikes. (so far)

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12-04-2012, 08:49 AM
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Quote:
Originally Posted by danishh View Post
it's not currently a viable business.

it is currently held together by billionaires enabling it through their largesse.
So it's like every other European league where sports aren't entered into as a true entertainment business. I have no problem with that.

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12-04-2012, 08:54 AM
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Quote:
Originally Posted by vorky View Post
plan is 70-80. All depends on IIHF interntional calendar or KHL´s independence from IIHF
And if KHL get's independece from IIHF, what does it mean for World Championship ? With 70-80 games in reg. season + playoffs...it will be long season, almost like NHL

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12-04-2012, 08:58 AM
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Originally Posted by saskriders View Post
discuss
On the fourth period there was an article about one of the teams ( the one Lupul signed with) being in extreme financial difficulty with the possibility of not making payroll.

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12-04-2012, 10:19 AM
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On the fourth period there was an article about one of the teams ( the one Lupul signed with) being in extreme financial difficulty with the possibility of not making payroll.
Wouldn't be the first time that's happened. I remember when Ray Emery was over there, and he told some stories about how his contract was cut mid season, and he didn't get paid. He didn't stay very long.

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12-04-2012, 10:31 AM
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Leafs87
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Very strong ATM but very unsustainable. They can't keep dishing money out like that. Especially since a lot of there arenas are empty and I don't know how much profit they actually make, but they are making sort of a statement to the NHL.

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12-04-2012, 11:09 AM
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Not sustainable blah blah blah. Neither were many NHL teams around the early 70s after expansion. Some folded, some moved, but we've had a 30 team league for the past decade.

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12-04-2012, 11:10 AM
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Quote:
Originally Posted by danishh View Post
it's not currently a viable business.

it is currently held together by billionaires enabling it through their largesse.
It comes down to how flush the owner is. Over the past few years I have attended games in several cities and I find that while some arenas are nhl quality other would not suit the ECHL. For NHL owners who complain about a wide separation in wealth with NHL owners, KHL is even worse.

Also, many of the KHL teams treat their teams like the Chelsea Blues owner treats his team, they are play things and there is very little interest in the bottom line, while other teams struggle and their owners are not billionaires

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12-04-2012, 11:33 AM
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Not viable currently. Arenas too small. Fans arent willing to pay higher prices. Low TV $. Mega rich owners who are taking a loss for various reasons. I could see down the road, maybe 10+ yrs that this might change as more money trickles down to fans and they can pay for a better product.

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12-04-2012, 01:08 PM
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There is not now, and likely will never be, enough wealth in Russia and eastern Europe to support a KHL modelled after the NHL. I'm not talking about oligarchs willing to blow money on shiny toys. I'm talking about fans to buy tickets. It's just not happening.

The KHL is a farce right now, you can't build a sports league on largesse.

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12-04-2012, 01:51 PM
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Quote:
Originally Posted by Riptide View Post
Wouldn't be the first time that's happened. I remember when Ray Emery was over there, and he told some stories about how his contract was cut mid season, and he didn't get paid. He didn't stay very long.
It wasn't cut. Emery stupidly signed a deal which paid him in rubles. So at the start of the year his deal was worth 2 million dollars a year US, in rubles. Mid way through the year the ruble fell drastically with regards to the american dollar (it reached an all-time low in February 09). In July 08 the exchange rate was 23 rubles per american dollar...by february 09 it was 36 rubles to buy one dollar. Hence in his eyes the value was "cut" when really he was just getting less value when he went to exchange his money back into US dollars...

It also depends team by team. I know that Slovan Bratislava has sold out every single home game thus far this season. Since the demand has been so high, they have opted to go with an auction type of selling for game day tickets. The average ticket price has DOUBLED since the start of the season.

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12-04-2012, 02:43 PM
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Quote:
Originally Posted by Hollywood Burrows View Post
There is not now, and likely will never be, enough wealth in Russia and eastern Europe to support a KHL modelled after the NHL. I'm not talking about oligarchs willing to blow money on shiny toys. I'm talking about fans to buy tickets. It's just not happening.

The KHL is a farce right now, you can't build a sports league on largesse.
Football in Russia is bigger/as big as hockey, if Russia only had 1 sport that 90% of the sports interested people followed, it would defenitly work.

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12-04-2012, 02:49 PM
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Not sustainable blah blah blah. Neither were many NHL teams around the early 70s after expansion. Some folded, some moved, but we've had a 30 team league for the past decade.
For the most part, NHL teams were profitable for a long time until player salaries skyrocketed.

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12-04-2012, 03:15 PM
  #23
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It's relatively strong because of the massive wealth of the owners. It's also very insecure because when they lose interest, the team loses the money it needs to pay the players.

It's not a good business model but it's not automatically doomed. There are football teams (Man City, Chelsea) that have lost money for a lot of years and still are doing well. If the owner is ok with losing money, it's not a problem.

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12-04-2012, 03:38 PM
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The league, in its current form, won't be challenging the NHL any time soon.

But if Europe gets its act together and combines the strongest markets in the KHL with the strongest markets in the other Euro leagues in a pan-European league, the NHL could have a serious competitor.

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12-04-2012, 03:42 PM
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Quote:
Originally Posted by Ernie View Post
The league, in its current form, won't be challenging the NHL any time soon.

But if Europe gets its act together and combines the strongest markets in the KHL with the strongest markets in the other Euro leagues in a pan-European league, the NHL could have a serious competitor.
Which markets would those be? KHL and Swiss league? Swedish teams will never be able to pay NHL salaries, our population is way too small, New York alone has 2x our population.

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