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The Business of Hockey Discuss the financial and business aspects of the NHL. Topics may include the CBA, work stoppages, broadcast contracts, franchise sales, and NHL revenues.

How Strong (Financially) is the KHL?

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Old
12-04-2012, 03:56 PM
  #26
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Originally Posted by Jonimaus View Post
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.
what? no it doesnt. sweden could probably take on 2 teams, maybe even 3. and finland could take 2

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12-04-2012, 03:57 PM
  #27
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what? no it doesnt. sweden could probably take on 2 teams, maybe even 3. and finland could take 2
Maybe if they got a **** ton of financial support from the other teams, otherwise no way.

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12-04-2012, 04:03 PM
  #28
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it's not currently a viable business.

it is currently held together by billionaires enabling it through their largesse.
Like the NHL then.

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12-04-2012, 04:07 PM
  #29
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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.
I get your point, but one thing needs to be added, with all due respect, its an irrelevant argument. Completely.

How much of a viable business is the Premier League? Barcelona? What factors are included when the KHL is deemed not to be a viable business? Because unlike some hint above, I certainly belive those mentioned to be pure business.

If I walk down the road and finds a wallet on the pavement with 100 bucks in it, unless people loose a ton of wallets in that area I can't expect to make a living that way. But if I bring a guitar and sits down on the pavement and plays a song and day after day collects 100 bucks in a hat I've put on the ground infront of me -- isn't that an income as good as any from a financial point of view atleast?

In Soccer this is more obvious. A Russian oligark, an Thai former prime minister, or whatever, can all of a sudden be put in prison in their home country and while there might be a line or two written about it in the press in the outside world, it basically disapears in a very black hole. But if the same guy owns a big Premier League team, or imagine the same guy owning the Yankees or like the 49ers or something, it would become a story in international media that never would go away. You know, just like you can sell 10.000 hot dog for 10 bucks 18 or 40 times per season, you can sell an alibi for a billion a year. What if you are a Saudi prince who want to do business in Europe, you certainly meet a lot of other billioneers if you own a Premier League club. If you hire a lobbyist to get to meet 15 billioners 10 times per year, what would that cost you? Seriously, anything can be had for money, but what would it cost?

And in the KHL, on diffrent levels, the same applies. Just like it does in the NHL or the SEL. The NHL has become a viable business because the owners has been able to take reverse advantage of laws aimed to protect workers, but that applys to 6 years of a business that has been around for almost a 100.

Not a single KHL team has found a wallet when walking down the street. There has been, there is, and I see no reason for why it will not be in the near future atleast, a reason for people to put money into clubs in that league. Hence that money is also part of the equation.


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12-04-2012, 10:56 PM
  #30
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Originally Posted by Jonimaus View Post
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.
Here's a good place to start:

http://hockeygods.com/blog/worldhock...ery_Impressive

Probably couldn't support a 30 team league, but a handful of teams in Russia, a few teams in Germany, a couple of teams in each of Switzerland and Sweden, one each in Finland and the Czech Republic, and you're well on the way to a 16 team league.

Could the markets support it? I think so. Stockholm has a metro population of 2m, which would be the size of an average NHL market, and much bigger than some. I think there would also be room for expansion into "non-traditional" markets - if pro hockey can exist in the southern US, then it should also make sense in Paris and London.

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12-04-2012, 11:27 PM
  #31
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Originally Posted by Ernie View Post
Here's a good place to start:

http://hockeygods.com/blog/worldhock...ery_Impressive

Probably couldn't support a 30 team league, but a handful of teams in Russia, a few teams in Germany, a couple of teams in each of Switzerland and Sweden, one each in Finland and the Czech Republic, and you're well on the way to a 16 team league.

Could the markets support it? I think so. Stockholm has a metro population of 2m, which would be the size of an average NHL market, and much bigger than some. I think there would also be room for expansion into "non-traditional" markets - if pro hockey can exist in the southern US, then it should also make sense in Paris and London.
You have to look at it from the perspective of how much you could charge for tickets to get to NHL level. It also includes arena size although that is likely less of a problem. The economics demand major metro areas where they can get advertising and a large enough population of the upper middle and upper class from which to draw. The NHL is doing the early season games in Europe where they are drawing to an NHL level gate so there are obviously venues. Outside of Russia, you would likely lead off with Stockholm, Berlin, Prague, London (huge population) and Helsinki which have hosted NHL games. I could easily see them adding Bern, Cologne and Milan to the mix. That's at least eight. Paris, Rome and Madrid have the population but possibly not the interest.

They currently have at least two NHL level arenas in Russia with plans to build more. Moscow is obvious, but there are several others. Look to the large population centers.

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12-04-2012, 11:39 PM
  #32
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Originally Posted by SJeasy View Post
You have to look at it from the perspective of how much you could charge for tickets to get to NHL level. It also includes arena size although that is likely less of a problem. The economics demand major metro areas where they can get advertising and a large enough population of the upper middle and upper class from which to draw. The NHL is doing the early season games in Europe where they are drawing to an NHL level gate so there are obviously venues. Outside of Russia, you would likely lead off with Stockholm, Berlin, Prague, London (huge population) and Helsinki which have hosted NHL games. I could easily see them adding Bern, Cologne and Milan to the mix. That's at least eight. Paris, Rome and Madrid have the population but possibly not the interest.

They currently have at least two NHL level arenas in Russia with plans to build more. Moscow is obvious, but there are several others. Look to the large population centers.
Even if you could get up to near NHL size arenas and NHL ticket prices - the former possible (if someone is willing to fund an arena building boom), the latter less so (are their any European sports where people pay NHL level ticket prices) - there still are other revenue issues: luxury boxes, sponsorships & advertising, naming rights, local & (inter)national broadcast deals. How many of these teams could garner $10M-$30M+/year for broadcast rights?

Realistically, how much revenue could a typical KHL team expect to generate?

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12-05-2012, 12:14 AM
  #33
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Originally Posted by kdb209 View Post
Even if you could get up to near NHL size arenas and NHL ticket prices - the former possible (if someone is willing to fund an arena building boom), the latter less so (are their any European sports where people pay NHL level ticket prices) - there still are other revenue issues: luxury boxes, sponsorships & advertising, naming rights, local & (inter)national broadcast deals. How many of these teams could garner $10M-$30M+/year for broadcast rights?

Realistically, how much revenue could a typical KHL team expect to generate?
They are getting NHL gate on the NHL games in Europe, but those are only two at a time. Can they sustain it for 40 games? And they do have venues that are at or nearly at NHL size.

I will grant you on the broadcast and sponsorship money that it might be difficult. As I understand it, the sponsorship side is not as difficult, but broadcast is a completely different story. Luxury boxes are probably in the same area of difficulty as broadcast issues.

We would need contributions from other posters on concessions for events. How much are they normally charging currently? That one is another big revenue stream and is dependent on what amounts to a significant "team tax" on normal charges outside of the venue.

Agree on most current KHL teams. They only have 3 or 4 population centers outside of Moscow where they might garner enough of a upper middle and upper class population to support high gate prices. Russia would be the hardest one to crack on resistance to gate prices.

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12-05-2012, 12:25 AM
  #34
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There are very few arenas in Europe that are NHL size. The biggest arena in Stockholm and Helsinki takes 13k people. Dynamo Moscow plays in an arena that takes 14.5k people. SKA St Petersburg plays in an arena that takes 12.3k people.

There is no tradition of businesses buying expensive season tickets. The average ticket prices in Europe are much lower than in North America. Sweden didn't even sell out the games where Sweden were playing in Stockholm during the World Championships because the tickets were too expensive (among other things).

I have a very hard time seeing NHL ever going to Europe. The teams wouldn't be able to support a NHL roster and the scheduling and travel would be a nightmare for the players. It's not a realistic idea.

I have a hard time seeing a trans-european league also. Swedish fans like to see Swedish teams play other Swedish teams. Interest in club tournaments for European teams is very low here. No familiarity with the other teams and their players plays a big part. It works for football with Champions League because there are so many great football teams in Europe that are well known. But hockey is different.

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12-05-2012, 12:30 AM
  #35
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Originally Posted by Jonimaus View Post
Maybe if they got a **** ton of financial support from the other teams, otherwise no way.
You're telling me there aren't a couple Swedish mega rich guys who couldn't partner on a couple franchises?
I know Norway has some very rich oil barons. How about Finland and Sweden?

NHL needs to be forward thinking or the KHL is going to eat its lunch

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12-05-2012, 04:40 AM
  #36
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Originally Posted by Captain Bob View Post
You're telling me there aren't a couple Swedish mega rich guys who couldn't partner on a couple franchises?
I know Norway has some very rich oil barons. How about Finland and Sweden?

NHL needs to be forward thinking or the KHL is going to eat its lunch
Even super-rich guys don't want to lose money forever. The KHL is never going to be in a position to 'eat the NHL's lunch'. It's a charity league at the moment, which has no hope of being self-sustaining in the current setup.

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12-05-2012, 04:46 AM
  #37
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http://www.oil-price.net/

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12-05-2012, 05:20 AM
  #38
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Yes, KHL teams are supported NOW by rich people/companies. Is it bad? I dont think so. You need to invest a lot to make bussiness profitable in future.

KHL clubs are not only senior team playing KHL, but clubs have kids schools, juniors, farm team - so, you have to invest into these areas. NHL clubs dont do that.

Back in 2008, there was no special hockey broadcasters, now there is - KHL TV - something like NHL Network. Yep, tv deals are not so valuable as NHL´s. There is no so strong (TSN, CBS etc) broadcasters in (east, central)Europe. On the other hand there is potential - btw, Eurosport Asia Pacific signed 2y deal with KHL. TV deals with chinese and japaneese broadcasters come sooner than later.

KHL as a league owns all marketing rights (tv deals, 60% of adv space on ice/boards) and NOTHING from this revenue is sharing with clubs. Now, clubs want from league to share this revenue. Some changes will be made next summer.

KHL´s biggest problem is not "making money TODAY" but IIHF. KHL is under IIHF umbrella, so have to play only cca 50 games in regular season (instead of lets say 70-80). It should be changed after Sochi Games.

Someone wrote it earlier - Slovan Bratislava games are sold out all the time. At the beggining of the season ticket prices were 8-20 euro. Now, it is cca 20-30 euro and I can imagine next season it will be 30-50 euro. Yep, arena will be sold out, no problem.

KHL is now in "investing mode" (renovating/building new arenas, creating developing model KHL-VHL-MHL, better broadcasting, etc).

NHL had this "investing mode" in past.

Do you think that workers in Rosneft has worse working conditions (payment etc) than workers in ExxonMobil? Do you think that Rosneft is loosing money in its businness? And ONLY ExxonMobil is making money? I dont think so. So, lets wait some time and KHL will be the same in future - making money enterprise.

Not to forget, KHL clubs have problem with workers (especially marketers, sport managers etc) - therefore there is "KHL university" (not the correct name, it is KHL developing and educated center - there is cooperation with Skolkovo as well - developing dep.)

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12-05-2012, 08:02 AM
  #39
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According to Izvestia, Gazprombank will be new co-owner of Atlant Moscow region since January 2013.

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В ближайшее время вы узнаете, кто будет совместно с областью новым владельцем команды. Как узнаете? А на свитерах игроков появится логотип компании, — интригующе заявил «Известиям» министр спорта Московской области Амир Галлямов. — Заранее не хотелось бы озвучивать ее название, так как мы находимся в процессе переговоров. Думаю, уже к новому году будет известно, какие структуры займутся «Атлантом».
not literally translation, only important facts.

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You will find out soon, who will be co-owner of Atlant. How do you find out it? Its logo will appear at Altant´s jerseys. Now we are in negotiation process, I think all will be done soon (early in 2013), told minister of sport of Msk Region

so no money from taxes for Atlant

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12-05-2012, 08:21 AM
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Many of you wrote that oligarchs will not want to lose money in KHL clubs. Your dream.

And reality?

CSKA Moscow was financially poor club back in 2010, now is owned by Rosneft
Atlant was not so wealthy club, now will be owned by Gazprombank
Avangard Omsk Region was supported by local goverment (taxes), now it is not happening, GazpromNeft increased its financial support of club
Dynamo Moscow was not so wealthy club, supported by Minister of Defence, now is owned by Arkady Rotenberg
SKA StPete was not owned by Gazprom a few years ago, now it is owned by Gazprom (hope since 2010)

etc etc

So, you claim billionars/oligarchs will not support clubs. Reality is another.

So, you claim clubs are supported by local goverment (taxes). The process is that rich companies are getting involved in club´s ownership.

Just saying.....

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12-05-2012, 08:30 AM
  #41
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Originally Posted by vorky View Post
According to Izvestia, Gazprombank will be new co-owner of Atlant Moscow region since January 2013.



not literally translation, only important facts.



so no money from taxes for Atlant
Gazprom is what us canadians would call a crown corporation.

Money invested in the KHL is money lost, profits not realized and not sent to it's majority owner, aka the Russian gov't. Also, Gazprom doesn't need to make itself known on the russian market. Gazprom also holds a state approved monopoly on natural gaz exports.

Adscam was small time goonery compared to this.

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12-05-2012, 08:45 AM
  #42
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Gazprom is what us canadians would call a crown corporation.

Money invested in the KHL is money lost, profits not realized and not sent to it's majority owner, aka the Russian gov't. Also, Gazprom doesn't need to make itself known on the russian market. Gazprom also holds a state approved monopoly on natural gaz exports.

Adscam was small time goonery compared to this.
Gazprom is private JSC, russian goverment holds 50.002%. I dont care if private JSC invest money into hockey club, their problem. The same like it is Ted Leonsis´s problem if he owns Caps.

Gazprombank is not Gazprom, different ownership.

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Money invested in the KHL is money lost
Dont agree. It is called invested money, now clubs are in loss, but in future will not have to.

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12-05-2012, 09:34 AM
  #43
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I have a hard time seeing a trans-european league also. Swedish fans like to see Swedish teams play other Swedish teams. Interest in club tournaments for European teams is very low here. No familiarity with the other teams and their players plays a big part. It works for football with Champions League because there are so many great football teams in Europe that are well known. But hockey is different.
Isn't this part of the reason the IIHF like to hold the international tournaments in Canada? Because while we may not sell out every game, we sell a lot of tickets for ALL the games, not just the ones where the host country is playing?

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12-05-2012, 09:42 AM
  #44
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Originally Posted by vorky View Post
Many of you wrote that oligarchs will not want to lose money in KHL clubs. Your dream.

So, you claim clubs are supported by local government (taxes). The process is that rich companies are getting involved in club´s ownership.
I didn't claim anything. I pulled that from a Wikipedia page. And I also indicated that I wasn't even sure how true that was - just that it was there.

Oh and Vorky, thanks for the info on the KHL. Not being able to read the language and being so far away, it's sometimes hard to get info on the KHL.

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12-05-2012, 09:43 AM
  #45
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I take my hat off to the KHL who has looked to do nothing but grow the game properly on such a large level.

I think the fall of the Soviet Union and the fall of the Soviet hockey league put the Russian leagues and its development 3 steps back. And then the Super League tried to bring it right back but produced nothing and rushed it. The KHL did what was needed and finding the right investors and bringing the game to the people.

In 3 years they produced much better teams, a stronger league and developed a proper developmental league. Now that the NHL lockout is in effect, the KHL is prospering. They will continue the stride and in only a few years you will start seeing much stronger teams and much stronger financial backgrounds for a majority of its teams

I dont think it will ever be as financially strong as the NHL but it will continue to grow.

They are even doing a great job in growing the game all over Europe. They inspired teams like Milano and Medvescak to step up their game, and those are teams in two non hockey marketed countries. They are pushing European hockey to the limits with their money and experience

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12-05-2012, 10:11 AM
  #46
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Swedish and finnish hockey websites say that after Sochi Games there will be rebirth of Champions League style-tourney involving European Trophy teams and KHL as well.

We will see what will happen, seems interesting.

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12-05-2012, 10:22 AM
  #47
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The whole league is a joke.

Quote:
Canadian Reid Simpson, a former NHL player who worked as Chekhov’s assistant general manager, sensed something was horribly wrong and scrambled from his team’s box seats down to the ice.

By the time he got there, Cherapanov’s body had already been taken outside and placed on the pavement. Dozens of spectators, smoking cigarettes, walked over and snapped photos on their cellphones of the lifeless teenager’s body.

Fifteen minutes later — a full 45 minutes after his collapse — the paramedics who hovered over Cherapanov’s corpse drove him to a nearby hospital.

Doctors were helpless. The hockey player was clearly dead, but that didn’t register with Nikolai, the Chekhov KHL team’s owner.

Nikolai, whose family name remains a mystery even to his own employees, burst through the emergency-room doors. “How can this happen? Bring him back,” Nikolai yelled at the doctors, according to Simpson.

The doctors understandably panicked.

Nikolai has a reputation for bringing a loaded gun into his team’s dressing room after a bad loss.
http://www.thestar.com/sports/hockey...rt-of-the-game

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The article’s worth a read, especially the part about Metallurg Novokuznetsk, a KHL club based in Siberia that apparently has total revenues of just $500,000.

The team is so impoverished that its general manager, Leon Vaysfeld, for years a scout for the Toronto Maple Leafs, admitted he only gets a little more than halfway to the KHL’s cap floor of $8 million a year. So some teams have at least 10 times more money to spend on players as he does. The shortfall of $4 million is picked up by the local steel plant.

Yet Novokuznetsk has still managed to sign former NHLers Randy Robitaille, Brent Sopel, and Chris Simon.

Says Robitaille of the KHL:

“At this point this league is not a viable business at this point. How can it be when a good salary in a local plant in Russia is only $600 or $700 a month? To make it a real business you need to sell at least 15,000 seats and have corporate boxes and they have almost no teams with that.

“Most KHL teams are not businesses. They exist as bragging rights for the owners.”
http://prohockeytalk.nbcsports.com/2...ys-khl-player/

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12-05-2012, 10:29 AM
  #48
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Quote:
Originally Posted by Ernie View Post
Here's a good place to start:

http://hockeygods.com/blog/worldhock...ery_Impressive

Probably couldn't support a 30 team league, but a handful of teams in Russia, a few teams in Germany, a couple of teams in each of Switzerland and Sweden, one each in Finland and the Czech Republic, and you're well on the way to a 16 team league.

Could the markets support it? I think so. Stockholm has a metro population of 2m, which would be the size of an average NHL market, and much bigger than some. I think there would also be room for expansion into "non-traditional" markets - if pro hockey can exist in the southern US, then it should also make sense in Paris and London.
Sorry to burst your bubble, but Sweden and Europe is thank god not like NA when it comes to sports. We have traditions here. Stockholm has 2 (3) hockey teams, that town would NEVER EVER (read: it won't happen) unite under 1 team. It just will not happen. And for stockholm to be able to support a team like that, it needs to have the entire city behind it, which it will not have.

And making a new franchise, I would bet that team would have less than 10 fans.

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12-05-2012, 11:12 AM
  #49
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It is said that the Soviet Union was a third world country with a first world military.
Likewise, it can also be argued today that the KHL is basically a beer league that is run like the mafia (lots of money but with third world infrastructure: stadiums, transportation, medical care, etc.)

The fact is, the fundamentals aren't there to sustain the league over the long term. It's just like the European Union. The EU is nothing more than a pipe-dream by Euros to build a 'United States of Europe' to rival the USA, but again, the fundamentals are not there (no central standing army, un-elected bureaucrats, rampant sectarianism/nationalism, no common culture/bond other than anti-Americanism). The EU can say that they have a larger population, a larger GDP, a larger whatever than the USA, but as we see know, it is all beginning to fall apart because it lacks the fundamentals listed above.

And like the EU, the KHL will probably one day be able to say that they are superior to the NHL because they have 50 team league spanning 10 countries (with one pending on the moon), but the fundamentals are not there, and there is no reason to suggest it will change otherwise in our lifetime.


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12-05-2012, 11:25 AM
  #50
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(lots of money but with third world infrastructure: stadiums, transportation, medical care, etc.)

Stadiums are old, some new, new arenas under contruction
Medical care - KHL has own medical reseach center + players goes to german clinics if needed. So what is the problem?

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