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Can KHL ever become profitable?Does the league even want to become profitable?

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Old
02-10-2013, 01:51 PM
  #26
J17 Vs Proclamation
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Originally Posted by Yakushev72 View Post
Hockey teams have huge costs? Huge in comparison to what? They pay for a building, maintenance equipment, practice facility, player salaries, employee salaries? For the oligarchs, these are petty change items, pennies, farthings. Don't you understand that most of these owners have no way of even noticing their hockey losses? Do you think Abramovich even notices any petty losses in his English Premier League football operations? A few teams aren't owned by exceptionally rich individuals, and they may end up in jeopardy, but that was all factored in at the outset. They expected some franchises to drop out. Let's say someone like Abramovich started losing $100,000 a day, every day of the year. Assuming no other revenue coming in, which is probably absurd, my calculator tells me that Abramovich could lose $100,000 a day for 264 years, until the year 2277. Hockey costs are nothing, especially in Russia, where operation expenses are lower. Any positive cash flow is just gravy.
The costs are large. Perhaps % wise relative to their total wealth, not so much, but it's still realistically large.

A business model of being run by incredibly wealthy owners who don't care about losing millions isn't sustainable. Yes, right now, they don't care. It's a little naive however to think this will continue. How long this model continues for, i have no idea.

I truely believe for instance that the English premier league will have a huge bust cycle at some point in the future. It isn't a sustainable business model forever.

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02-10-2013, 02:06 PM
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Originally Posted by J17 Vs Proclamation View Post
The costs are large. Perhaps % wise relative to their total wealth, not so much, but it's still realistically large.

A business model of being run by incredibly wealthy owners who don't care about losing millions isn't sustainable. Yes, right now, they don't care. It's a little naive however to think this will continue. How long this model continues for, i have no idea.

I truely believe for instance that the English premier league will have a huge bust cycle at some point in the future. It isn't a sustainable business model forever.
Who says that KHL owners dont want to be profitable in future? I would say they are now at investing-mode. It can take 5, 10 or 20 years.

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02-10-2013, 02:44 PM
  #28
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Originally Posted by vorky View Post
Who says that KHL owners dont want to be profitable in future? I would say they are now at investing-mode. It can take 5, 10 or 20 years.
Sigh. I never understand your lack of reading comprehension.

I never said they don't want to be profitable Mr spin doctor. All i stated was that the current business model ; the reliance on endless funds/expenditure cannot continue forever. Now whether in 20 years the KHL will exist within a wealthier market with a great demand for the product ; i do not know. I hope so.

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02-10-2013, 04:12 PM
  #29
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Originally Posted by J17 Vs Proclamation View Post
The costs are large. Perhaps % wise relative to their total wealth, not so much, but it's still realistically large.

A business model of being run by incredibly wealthy owners who don't care about losing millions isn't sustainable. Yes, right now, they don't care. It's a little naive however to think this will continue. How long this model continues for, i have no idea.

I truely believe for instance that the English premier league will have a huge bust cycle at some point in the future. It isn't a sustainable business model forever.
These are rich men who want to use their money in a way that makes their hearts pump and their pulses race. Many of them haven't really earned their fortunes through business prowess - in a lot of cases, they were just handed these business enterprises by the government for a song. A lot of their business enterprises are relatively mundane in comparison to the prospect of a thrilling hockey game. This isn't just true in Russia - a lot of major sports franchises around the World are owned by rich guys who want to be part of the spotlight and have their money be associated with something that is fun, and has winners and losers.

I also think some of the Russian owners think that it is a way to help build sports glory in Russia. They see that Russia as a country has the basic tools to be a hockey powerhouse, but believe that it will never fully happen as long as Russian players are just part of the NHL apparatus. It things pan out, then there will a greatly increased demand for Russian hockey talent, and Russia does have the unique capacity to greatly increase its production of great talent, given the vast areas of the country that are undeveloped or underdeveloped from a hockey standpoint. And of course, they are gambling that further development of talent will pay off in the form of greatly increased interest and an expanding fan base.

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02-10-2013, 04:45 PM
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Quote:
Originally Posted by Yakushev72 View Post
These are rich men who want to use their money in a way that makes their hearts pump and their pulses race. Many of them haven't really earned their fortunes through business prowess - in a lot of cases, they were just handed these business enterprises by the government for a song. A lot of their business enterprises are relatively mundane in comparison to the prospect of a thrilling hockey game. This isn't just true in Russia - a lot of major sports franchises around the World are owned by rich guys who want to be part of the spotlight and have their money be associated with something that is fun, and has winners and losers.

I also think some of the Russian owners think that it is a way to help build sports glory in Russia. They see that Russia as a country has the basic tools to be a hockey powerhouse, but believe that it will never fully happen as long as Russian players are just part of the NHL apparatus. It things pan out, then there will a greatly increased demand for Russian hockey talent, and Russia does have the unique capacity to greatly increase its production of great talent, given the vast areas of the country that are undeveloped or underdeveloped from a hockey standpoint. And of course, they are gambling that further development of talent will pay off in the form of greatly increased interest and an expanding fan base.


As i said earlier, much of the KHL's future success will depend on their ability to sell the KHL to the domestic population and the consumer spending power of the average Russian. There is no doubt Russia is the only even remote competitor to the NHL, but that will be dictated by the domestic economy, the government outlook on the project to remain strong for many years, and for the KHL to truely pennetrate the domestic market. For direct competition with the NHL, i think economics are without doubt the most important, and i don't know how that will look like in 40-50 years time. But if managed well the KHL can definitely become a hugely succesful sporting structure in popularity.

I would also say Russia is a hockey powerhouse .

As a side note, i can't wait to see what happens to Chelsea when Abramovich finally gets bored of it.

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02-11-2013, 09:55 AM
  #31
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Originally Posted by J17 Vs Proclamation View Post
As i said earlier, much of the KHL's future success will depend on their ability to sell the KHL to the domestic population and the consumer spending power of the average Russian. There is no doubt Russia is the only even remote competitor to the NHL, but that will be dictated by the domestic economy, the government outlook on the project to remain strong for many years, and for the KHL to truely pennetrate the domestic market. For direct competition with the NHL, i think economics are without doubt the most important, and i don't know how that will look like in 40-50 years time. But if managed well the KHL can definitely become a hugely succesful sporting structure in popularity.

I would also say Russia is a hockey powerhouse .

As a side note, i can't wait to see what happens to Chelsea when Abramovich finally gets bored of it.
I agree that future economic and political developments will have a big impact on how Russian hockey development takes shape. For now, there is no question that Putin is a big supporter of Russian hockey. It remains to be seen the rate at which Russia will transition into a fully modern economy - there needs to be greater diversification away from just being a resource exporter.

English football continues to enjoy an ever-growing popularity around the World, which is no doubt exactly why Abramovich injected himself, and his fortune, into the middle of it. He just loves the spotlight!

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02-13-2013, 01:14 AM
  #32
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KHL is never going to be profitable. It's not a commercial enterprise, it has never been planned to become a commercial enterprise, and it's never going to become a commercial enterprise.

It's a political project that's funded almost in its entirety by Russian state funds, and, basically, it's a part of the Russian foreign policy doctrine.

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02-13-2013, 11:47 AM
  #33
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Quote:
Originally Posted by Namejs View Post
KHL is never going to be profitable. It's not a commercial enterprise, it has never been planned to become a commercial enterprise, and it's never going to become a commercial enterprise.

It's a political project that's funded almost in its entirety by Russian state funds, and, basically, it's a part of the Russian foreign policy doctrine.
Except that almost 25% are located outside the Russian Federation, and that there is no federal money in any of the KHL. Just a small amount of teams that have help from provincial funds. Part of which goes to youth schools.

Intense perspective tho

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02-13-2013, 12:31 PM
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Quote:
Originally Posted by Namejs View Post
KHL is never going to be profitable. It's not a commercial enterprise, it has never been planned to become a commercial enterprise, and it's never going to become a commercial enterprise.

It's a political project that's funded almost in its entirety by Russian state funds, and, basically, it's a part of the Russian foreign policy doctrine.
Foreign policy doctrine? Take off your tinfoil hat. You sound like a nutter.

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02-13-2013, 12:43 PM
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Originally Posted by Helo View Post
Foreign policy doctrine? Take off your tinfoil hat. You sound like a nutter.
It's mostly a Gazprom business project. It's not a coincidence that KHL expands to markets where Gazprom has some interests.

But it produces the best hockey in Europe, helps youth development... so what the hell, I'm ok with it.

Any "evil Soviets" conspiracies are stupid.

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02-13-2013, 12:56 PM
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Originally Posted by ebis View Post
It's mostly a Gazprom business project. It's not a coincidence that KHL expands to markets where Gazprom has some interests.

But it produces the best hockey in Europe, helps youth development... so what the hell, I'm ok with it.

Any "evil Soviets" conspiracies are stupid.
Your first and third paragraph somewhat contradicts each other.

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02-13-2013, 01:07 PM
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Your first and third paragraph somewhat contradicts each other.
What I meant is that it's about money, not geopolitical influence.

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02-13-2013, 07:06 PM
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Originally Posted by Namejs View Post
KHL is never going to be profitable. It's not a commercial enterprise, it has never been planned to become a commercial enterprise, and it's never going to become a commercial enterprise.

It's a political project that's funded almost in its entirety by Russian state funds, and, basically, it's a part of the Russian foreign policy doctrine.

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02-14-2013, 04:13 AM
  #39
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Quote:
Originally Posted by Namejs View Post
KHL is never going to be profitable.
"Never" is a strong word but you may be right. At least for the next 10 years the KHL won't be profitable.

Quote:
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it's a part of the Russian foreign policy doctrine.
Explain?

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02-24-2013, 02:32 PM
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To answer the question in the title:
Yes it can and no, it doesn't

An explanation:
KHL clubs could see green if they all had +/- Riga Dinamo's budgets, owned their own arenas (about 12 000), the lowest ticket proce would be about EUR 30 and KHL marketing would be able to sell (not give away for pennies) TV rights. Curently, or in few years' time, all (except TV money) is probably possible only in Prague and Bratislava. It could be possible in Moscow and Saint Petersburg if people were more crazy about hockey and hockey was like religion in these cities. Other cities do not have as many people or as strong economy to afford such a cost of tickets to enter arena.

Based on Dinamo Rīga's budget, yeah... we would be green if we own our own arena that we could sell tickets for such a price and got a nice cheque from TV deals.

However KHL's goal is completely futile tries to compete with NHL and that means that budgets are increasing faster than Russia's GDP..... Therefore there's no chance it will ever happen, if we continue the same way.

At the moment all the players is KHL are overpriced... even in Dinamo Rīga perhaps. Especially so in the big clubs. But people do not want their stars to go to NHL, so they pay and will continue to pay. It's hard... because I can imagine that if you want KHL to become profitable you need to cut the budgets and cut hard, but then the stars (the few that NHL might be interested in at least) will leave. And who knows, if the budgets are comparable with other European leagues, some might just go to Swiss Alps instead of Novokuznetsk or Amur...


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02-24-2013, 02:41 PM
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Maybe you heard. Russia and Ukraine wants to create common soccer league. Gazprom is one of founders. They want to invest one billion USD in 1st year of project. Champion would get 92 millions USD as prize money, other clubs would get money as well. That is crazy, I dont know how much UEFA Champions League pays but russian media claims it is less.

Now imagine that KHL would find sponsors, in China ect, which would invest at least 0,5 billion per year. Is it comparable with NHL?


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02-24-2013, 02:47 PM
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Originally Posted by vorky View Post
Maybe you heard. Russia and Ukraine wants to create common soccer league. Gazprom is one of founders. They want to invest one billion USD in 1st year of project. Champion would get 92 millions USD as prize money, other clubs would get money as well. That is crazy, I dont know how much UEFA Champions League pays but russian media claims it is less.

Now imagine that KHL would find sponsors, in China ect, which would invest at least 0,5 billion per year. Is it comparable with NHL?
After reading a brief article (It's credibility i do not know), it estimated Chelsea won roughly 47 million for their Champions league success. That is an acculumated total of funds for their passage.

I assume the finances of Russian football teams is comparative to their hockey counter-parts?

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02-24-2013, 02:48 PM
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Originally Posted by J17 Vs Proclamation View Post
I assume the finances of Russian football teams is comparative to their hockey counter-parts?
Nop. Football sees much more money pumped in it. Football is for real oligarchs

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02-24-2013, 02:52 PM
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Nop. Football sees much more money pumped in it. Football is for real oligarchs
I meant it's structure, not the totals involved. A Lambo and a Volvo are the same, basically.

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02-24-2013, 02:58 PM
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Originally Posted by J17 Vs Proclamation View Post
After reading a brief article (It's credibility i do not know), it estimated Chelsea won roughly 47 million for their Champions league success. That is an acculumated total of funds for their passage.
for winning title? Or also for victories etc? This soccer project counts with prize money for victories, etc as well.

there is a few infos in ENG, I recommend russian version.

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02-24-2013, 02:58 PM
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Now imagine that KHL would find sponsors, in China ect, which would invest at least 0,5 billion per year. Is it comparable with NHL?
I can understand why Russian and Ukranian oligarchs want to invest 1 billion USD in a common soccer league, but I fail to see how Chinese will want to invest even a dollar in a hockey league.... Are they crazy? And if there are such people, I want their phone number.

Also it seems that in some version of Russian that I don't quite understand the words ''invest'', ''spend'' and ''waste'' have the same meaning.


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02-24-2013, 03:01 PM
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Originally Posted by vorky View Post
for winning title? Or also for victories etc? This soccer project counts with prize money for victories, etc as well.

there is a few infos in ENG, I recommend russian version.
http://www.guardian.co.uk/football/2...ampions-league

47 million is the total figure, comprising of all revenue sources. I think 7 million is the figure for final glory.

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02-24-2013, 03:02 PM
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I can understand why Russian and Ukranian oligarchs want to invest 1 billion USD in a common soccer league, but I fail to see how Chinese will want to invest even a dollar in a hockey league.... Are they crazy? And if there are such people, I want their phone number.
chinese needs gas and oil. Russians have gas and oil. Really? You dont know how russians do bussiness?

China was only a example, Asia is better word

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02-26-2013, 09:55 AM
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It doesn't matter if KHL makes a profit, they aren't meant to do so. They are like football teams. Take a team such as Manchester United, a sustainable franchise and they always run a loss.

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02-26-2013, 10:17 AM
  #50
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chinese needs gas and oil. Russians have gas and oil. Really? You dont know how russians do bussiness?

China was only a example, Asia is better word
Whatever form the discussion takes, and whatever the sources of revenue, its safe to say that most KHL franchises can sustain the current level of losses for a long time. It was always anticipated that those franchises that lacked the financial wherewithal might drop out somewhere down the road, but if the basic core is strong, the goal of creating a top-flight league will be sustained well into the future. Financial solvency is based on a combination of factors that go beyond mere gate receipts. There is television money, which is a huge part of the equation, and merchandizing, among others.

One of the biggest indicators of success for professional sports franchises is television viewing audience ratings. What KHL owners will look at, 8-10 years down the road, is whether the league has caught on with the public. Do viewer ratings suggest that a continously growing segment of the public is watching KHL games? Are there indications of growing rivalries based on city/regional affiliation? Are there "stars" emerging who have become fan favorities with a broad segment of traditional sports viewing? If the answers to those questions is no, then investment in the KHL will likely drop off, and the league may be in jeopardy. On the other hand, if the answer is yes in all or most cases, then investment will certainly increase, and outside sponsors will want to get in on the action.

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