Wednesday, the 24th of May was a long and important day for the Kontinental Hockey League. In addition to the season’s closing ceremony and the annual gathering of the club owners, there was a meeting of the Board of Directors, at which the KHL management’s proposed strategy for the next seven seasons was submitted, examined, and approved. The Board also confirmed the list of member clubs which will participate in the 2017-18 season – a reduction from 29 to 27 teams, due to the departure of Metallurg Novokuznetsk and Medvescak Zagreb.
After the meeting was over, and before the grand awards ceremony had begun, KHL President Dmitry Chernyshenko spoke to the media.
“The members of the Board did make some refinements to the proposals submitted by the League, but they approved the main direction of development set out by the League for the period running to 2023. Consequently, we have been tasked with producing a finalized strategy ready for implementation by the end of November, and we can certainly accomplish this by then. It was decided that 27 clubs will be competing next season. We carried out a comprehensive evaluation in which each member club received a rating (under this new procedure, clubs are to be assessed according to eight criteria), and the two clubs which merited the lowest ratings have left the League.
In the Western Conference, the Bobrov Division loses Medvescak, as the Zagreb club failed to submit the documentation required for admittance into the Championship. In the Eastern Conference, Metallurg Novokuznetsk has departed from the Chernyshev Division, as the club scored the lowest ratings in many key areas of our assessment process. There have been no other changes to the divisions for the forthcoming season, but we do plan to further reduce the number of participating clubs to 24. As a result, in 2018 three more clubs will move from the KHL to the VHL, which will undoubtedly make the lower league much stronger.
Regarding the salary ceiling and our plans to increase commercial revenue, these initiatives should bring in an extra 12.5bn rubles (approx. US$222m) by 2023, thus reducing dependence on direct and indirect funding from the state. This considerable sum will be spent on recruiting and coaching players and so provide a wider and stronger pool of talent for the national team.
The Bobrov Division loses Medvescak, as the Zagreb club failed to submit the documentation required for admittance into the Championship, and Metallurg Novokuznetsk has departed from the Chernyshev Division, as the club scored the lowest ratings in many key areas of our assessment process.
Next season the ceiling, while still soft, will be lowered to 900m rubles (approx. $16m) to be reduced by a further 50m (approx. $890,000) for the 2018/2019 season, without barring the payment of individual performance-related bonuses or team bonuses for winning trophies. The penalty for breaking the salary ceiling remains at 20%. For the 2019-20 season, we will introduce a strict wage ceiling, one which must not be breached, and the fine will be 20%. This will allow each club an exception for one star player. We intend to get the salary ceiling down to 600m rubles (approx. $10.5m) by 2021, with two exceptions allowed per club, giving us 48 star players in the League.
The meeting also looked at the Juniors (MHL) and Women’s Hockey League seasons. Both were judged a success, and we shall draw up complete and detailed strategies for the future development of these Leagues by the end of November.
The League decided it would henceforth take a tough stand regarding clubs which are in debt to their players. We have seven clubs that have frequently been late in paying players’ salaries, and the average delay exceeds 200 days. This season, these combined debts amounted to more than one billion rubles (approx. $17.8m) – an unprecedented level. We will not tolerate this, and we agreed that clubs who have not settled these debts by the 1st of July shall be fined 20% of the outstanding amount owed to their players.”
- Will these new ratings for clubs be made public, and which clubs have poor ratings?
“I favor making the ratings public. Each season has its own weighting. For instance, sporting achievement accounts for 30% of the total. We will publish the ratings, showing the three candidates for exclusion. The evaluation criteria include television ratings, the presence or otherwise of funding for the club’s budget, debt levels, stadium size and many more.”
- The Board decided to expel Metallurg Novokuznetsk, who gave to the hockey world such players as Sergei Bobrovsky, Dmitry Orlov, Kirill Kaprizov and many more. Are you not concerned that the expulsion will weaken the Russian national team and ruin the city’s hockey school?
“The decision does not relate to hockey schools at all, and Novokuznetsk is to play in the VHL, so they will need to keep their school running. Moreover, I would not put the achievements of those players you mentioned down to the KHL club. The schools deserve the credit. We believe that the money saved -– the cost of running a VHL club lower is lower than a KHL one – could be spent on those areas which bring results. If more stars are born in Novokuznetsk, then the school grows stronger, more exiting, and the region grows rich in hockey talent. I'm sure it will turn out well and they will produce players.
The key point here is that the League needs to become a more competitive environment. The top clubs outspend the weaker ones by a factor of eight, which is a stark illustration of the serious imbalance among clubs playing in the KHL. Unfortunately, Metallurg had very poor figures in many basic parameters, including attendance at the matches, which sometimes dipped below the VHL average. Therefore, we believe our assessment to be a fair one. We regret that there has been a negative emotional reaction to our decision, but the club had plenty of time to put things right. You know the club had a change of management before the start of the season, but this still did not bring about the desired results.”
Novokuznetsk is to play in the VHL, so they will need to keep their school running. Moreover, I would not put the achievements of those players you mentioned down to the KHL club. The schools deserve the credit.
- The wealthier clubs are to pay a "luxury tax." Where will the money go? Should it not go to help the indebted clubs?
- Revenue from the luxury tax will go into the stabilization fund, with 60m rubles (approx. $1.06m) to be spent on special Russian Hockey Federation programs, in accordance with our agreement with the RHF.
- What can you tell us about those clubs who might soon join the League?
“There are several possible candidates, but I will not name them yet. We are conducting a comprehensive analysis of all the relevant information presented to us. But I will say that there are clubs from traditional hockey countries, and others from countries where the game does not have deep roots. We are attracting keen interest from Asia. The KHL is an international League and it is important for international development, but we are confident the Russian clubs will remain in the majority.
I think few would argue that the weaker Russian clubs do not add to our entertainment value, and should be replaced with strong teams from other nations. With so many Russian clubs the top-class players are spread too thin, and the current policy of limiting foreign players means we cannot raise the quality by attracting more players from overseas. The League’s development is hindered by these circumstances. Also, we cannot rule out further separating the conferences, because this would make logistical sense in light of possible growth in the East.”