NHL Salaries

Russian sanctions cause realignment of European hockey

As the war in Ukraine continues, the world has continued its process of excluding Russia from the global economy and geopolitics. Whether it’s big corporations refusing to do business in the country, the growing list of Western-sanctioned individuals and corporations, or elsewhere, the underlying thesis is the same: if you try of violating international standards, you will not receive any of the benefits of being part of the global community.

The hockey world took a similar, albeit softer, approach, given the autonomy of individual leagues and the lack of interleague play around the world. The NHL canceled the NHL/KHL Memorandum of Understanding, which agreed that the two leagues would honor each other’s contracts. The IIHF took a much harder line, effectively banning Russia and Belarus from all tournaments at all levels – club and country. The CHL’s three leagues are also considering banning Russian and Belarusian players from coming to play as imports next season.

While each of these hockey decisions and policies have a very rapid impact upon their initial implementation, there is a slower, more transformative cascading current in the world of hockey that is transforming the way the game operates at the level. global.

Here’s what’s going on

The KHL was largely owned and operated by the Russian government and its inner circles. This includes teams owned by the Russian Interior Ministry (Dynamo Moscow), Russian state-owned energy companies Gazprom (SKA Saint Petersburgh), Rosfnet (CSKA Moscow), steel producer Severstal (Severstal Cherepovets), which is owned by the billionaire Alexei Mordashov, and others.

Many owners and leaders of KHL have been sanctioned directly or through their companies, including the leaders of Gazprom, Rosfnet, Sevarstal, Mordashov, Oleg Belozerov of Russian Railways, the owner of Lokomotiv Yaroslavl, Viktor Rashnikov, the owner of Metallurg Magnitogorsk, among others.

The goal of the KHL has been and continues to be the influence of the soft power of the Russian state throughout the sports world. When it was created, the goal was to create a league to keep Russian players in Russia and challenge NHL supremacy, as James Mirtle notes here. Since then the league has seen bumps, on and off the ice, but has been largely pro-Russian despite the presence of member clubs in other countries.

During the conflict in Ukraine, the teams continued to display pro-Russian demonstrations and flags in support of the cause. This includes waving the “Z” at games as a symbol of support for the war, pro-Putin protests, and large banners supporting the government, including this one:

This caused the IIHF to open an ethics investigation into the Russian Hockey Federation.

However things change

Although the merits of the sanctions have long been debated by political scientists and pundits, it seems they are having a major impact on Russian hockey. Two KHL teams are already not playing in the league next year, Jokerit from Finland and Dinamo Riga from Latvia. That leaves only three teams outside of Russia in the KHL.

On top of that, Sevarstal appears to be on the verge of bankruptcy, with Citi Bank blocking repayment of a loan to creditors early last week. If the company defaulted, it would put the team and its affiliates at risk. Bear in mind of course that many Russian KHL teams own or have strong agreements with teams in the VHL (the Russian equivalent of the AHL) and the MHL (Russian junior hockey league). If KHL clubs start to falter, the VHL and MHL will be the first to feel it.

This is starting to happen with Sibir Novorsibirsk severing ties with its VHL team Yuzhny Ural to cut costs. There are also rumors that Severstal will switch to VHL in order to cut costs. Official news is hard to come by, but the longer the sanctions last, the harder teams and managers will be hit, leading to a much tougher sell to continue operating Russian hockey teams at all levels.

To make matters worse, the political fallout from this crisis is hitting the country’s ability to recruit European and North American players. Many this season felt trapped between the need to support their families with their wages and the desire to do what they thought was right. Some like former Calgary Flame Kenny Agostino chose to leave, but many others either didn’t or couldn’t. At the start of this season, it’s hard to expect North American and European free agents to be tempted to play in the KHL, and even harder for teams to be able to attract them financially.

What happens now?

We are beginning to see the first stages of the atrophy of the Russian hockey system. How far this will go remains to be seen, but the cracks are getting bigger and the alarm bells are ringing. This will make it harder for young Russian players to get the development they need to take on the highest levels of the game, whether in North America or Eurasia.

There will be pressure on these players to stay in Russia, and the CHL’s proposed Russian and Belarusian player blocking doesn’t make that any easier. However, if there aren’t as many teams in the VHL and MHL system next year, it will be difficult for talented young players to stay home.

Then there’s the inability to recruit or pay very good players based in North America or very good Europeans, who may not be good enough to be NHL players, but who expect to higher wages and tougher competition than other European leagues will give them. They may no longer have the opportunity to play in Russia. These players are in Russia because it gave them great opportunities than leagues like the ECHL, but without the KHL as an option, they will look for new opportunities.

Add to that a brain drain of talented coaches, coaches and other staff who will seek new opportunities outside of Russia due to the current instability. Currency devaluation and rumors that players and coaches are not being paid on time can further compound this problem.

European leagues take note

You end up with a lot of talented hockey players looking for new homes, which could prove to be a huge boost for many European leagues. The SHL, DEL1 and the Swiss National League in particular will see a huge surplus of talent arrive as players fight for jobs in Europe’s top leagues. This will create a ripple effect where players who end up being ousted will push others in lower leagues like HockeyAllsenskan, Czech Extraliga, AlpsHL and others down.

This is quietly a huge opportunity for European hockey leagues to reassert themselves as major players in the hockey world, breaking the KHL/NHL duopoly. They need to do three important things to make the most of this opportunity.

First, they need to start preparing for it now. Teams need to actively seek out the best talent they can afford and gamble on bringing in high-quality players they can market to their fans. If they can increase fan engagement, they can increase gate revenue and grow their respective leagues.

Second, leagues alongside the IIHF must work actively to grow the game across Europe. Tournaments like the Hockey Champions League and other inter-European exhibition matches could be huge opportunities to build fanbases and develop regional rivalries beyond individual leagues. As UEFA does with the Champions Leagues and Europe as well as many international club matches in the off-season, this could be an opportunity to shift the center of continental power from Moscow to a city like Zurich, Munich or Stockholm.

Finally, the NHL could play a huge role in this without appearing to politicize the conflict. A small gesture like hosting a friendly exhibition game between this year’s Stanley Cup winner and this year’s Champions Hockey League winner Rogle BK as part of a European tour for this team . This would give the team the opportunity to play in different arenas, grow their individual brand in a new market, and hopefully secure some ties before the start of the year.

All eyes on the international scene

Teams have already traveled to Europe and Asia as part of the growing gaming initiative with generally positive reviews. Hopefully the impact of the pandemic on international sports can be limited, as it is high time for teams to expand the game overseas.

The European infrastructure already exists. There are excellent leagues across the continent, with teams with historic pasts and present. The slow implosion of the KHL provides an opportunity for more talented players to join European teams and help build the talent bases of those leagues. When the KHL was born, it pushed the center of Eurasian power east into Moscow, but now it may be time for Europe to reclaim it.