HockeyBest for NHL, KHL to make a deal

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It's one of the biggest questions about the KHL: How does this league make money?

A packed house of 5,600 watched a good playoff game between Moscow Spartak and Lokomotiv Yaroslavl. Average ticket price? About $10 Cdn., I was told.

Three nights later, I watched a practice in Ufa, home of the KHL's regular-season champion. That very nice rink seats 8,200. Cheapest ticket? $3. Most expensive? About $30.

This isn't altruism, but an acknowledgement that the average Russian can't afford anything more expensive.

According to KHL president Alexander Medvedev, there are 20 players making more than $5 million US. Guys who'd be earning $100,000 in the AHL are getting 10 times that figure. (Barry Smith, who coached St. Petersburg the last three seasons, says the Russians are going to have to reign in these salaries)

The league's TV contract is in its infancy, with some North American observers believing it pays to put games on the air.

It is a mistake to underestimate Russian pride, and some very powerful people want a strong, thriving hockey league. Apparently, Prime Minister Vladimir Putin has told those who've made themselves rich on Russian resources that building the KHL is a form of payback.

Local governments are heavily involved, as are major corporations. For example, Metallurg Magnitogorsk -- Evgeni Malkin's home team -- is almost entirely funded by a successful steel company.

Financial incentives

It is believed that new teams, like the one joining next year from Karlovy Vary in the Czech Republic, are getting large financial incentives.

Medvedev himself admits that right now, the economics don't make sense. When I asked him if he hopes to compete with the NHL he said "10-15 years," once the league's infrastructure is more developed.

Believe it or not, the NHL needs to make sure the KHL continues to move forward, especially now that it is trying to fund junior teams as well. But, the Russians must be more reasonable in their demands. 

Under the previous transfer agreement, the NHL paid $200,000 US per signed player to the teams they came from.

Even though some NHL executives privately admit that figure is too low, Finland and Sweden agreed to a new deal that raised the number to $225,000. That is still not good enough for the Russians.

One KHL executive (not Medvedev) said a player like Alexander Ovechkin should have a transfer fee similar to David Beckham's.

In 2003, when Beckham moved from Manchester United to Real Madrid, the amount was 35 million euros, or $54.6 million Cdn.

That's beyond outrageous. If this is the majority opinion, there will never be a deal and you can hardly blame anyone in the NHL for walking away.

Vague on numbers

I tried to pin Medvedev to a number, but he wasn't going there. He did say that a top player costs between $1.5-$2.5 million US to develop.

"They're dreaming if they think they're getting that," said one NHL general manager.

NHL deputy commissioner Bill Daly told a Russian newspaper this week that the NHL is not interested in negotiating a fee on a player-by-player basis. But, is it willing to go higher on a per country basis? Not every guy on a team makes the same money, either.

There are other things Medvedev talked about in his interview. He'd like Russian players who get sent to the AHL to return home instead (In the deal with Sweden, non-first rounders under 22 can go back if cut from the NHL).

He also wants a kind of "exchange program" where young North Americans play in the KHL. Don't know if the CHL would be so interested but his quote about this, which will be featured in the online version of tonight's Inside Hockey, is hysterical.

He also said he's offered to buy an NHL team, providing some North American owners invest in his league. That, in theory, is not a bad idea.

Medvedev is also looking at expansion to Ukraine and Scandinavia. Former Flame Hakan Loob is conducting a feasibility study on behalf of five Swedish Elite League teams.

But, this all comes down to money.

Back to the future

Last year, there were just seven Russians, five Slovaks and three Czechs taken in the NHL draft. Ten years ago, 41 Russians were selected. Nine years ago, there were 31 Czechs.

While Russia remains an elite hockey power, the Czechs and especially the Slovaks are in danger. This isn't solely about the KHL providing an alternate opportunity. It's about those countries falling behind in terms of development, and not getting transfer money is a major reason.

As Slava Fetisov said, "What would the NHL look like without Europeans?"

Answer: not very good.

But the Russians have to be realistic too. They need the money, but it takes two to make a deal.

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