The KHL Board of Directors held a meeting in Moscow on Wednesday, and many personnel from the management of the League's member clubs were also in attendance. The Board summarised and praised the results of the KHL's three-year strategy, which has now reached its completion, and also discussed the details and implications of the new seven-year development plan, which, as the name implies, is aimed at implementing a wide range of further reforms by the year 2023.
Over the past three seasons, working within the framework of the approved strategy, the League has not only achieved financial stability but has also introduced the practice of distributing TV revenue among the clubs. Since the 2014-15 season, the annual sum distributed to the clubs has trebled, and the total amount paid out now exceeds 710m rubles (approx. 12m USD).
The three-year strategy, now implemented in full, laid the foundations for further development and served as a transitional period paving the way for the new, seven-year strategy. The aims of the latter are to raise the level of sporting excellence and to make the clubs more commercially attractive, more financially sound, and less reliant on state funding.
This new draft strategy presented on Wednesday already incorporates many improvements suggested by members of the Board, but further suggestions and modifications may be made in the period up to and including the 27th of December. The document is expected to receive final approval at the next Board of Directors meeting, scheduled for the end of January, 2018.
The strategy comprises 12 sections, devised to tackle all the specific areas of importance for the League and its clubs. :Together, these sections cover, inter alia, the clubs' commercial potential, medical and anti-doping measures, the competitive environment, the League management and legal support, the quality of refereeing, TV, marketing, licensing, Internet projects and video content, the distribution of tickets, and communications.
One important task for the clubs will be to make the product more commercially competitive. Currently, commercial revenue accounts for only 5-10% of clubs' turnover, but we expect this figure to have reached 25% by 2023.
Another key element in the new strategy is the principle of Financial Fair Play – the League will expand the disclosure requirements for clubs regarding financial and economic activities. This will enable the analysis of clubs' activities and thence to construct a financial sustainability model. To determine the strategy's objectives, the primary analysis will cover various financial metrics in a given club's expenditure. For example, the sums spent by clubs on travel and transport varies by a factor of six, and the sums spent on administrative activities vary by a factor of ten. Under the new strategy, the KHL will control excessive spending by setting targets for the member clubs' budgets.
Yet another section of the 2023 strategy is aimed at the optimization of the Championship schedule. It is planned to gradually increase the number of matches between major rivals and geographic neighbors, until such high-ranking match-ups account for 40% of games. The season should begin in early September, and the schedule should be submitted to the clubs at least two-and-a-half or three months before the start of the season.
Bearing in mind the planned expansion of the League due to the inclusion of more clubs from other countries, it is possible that the format of the KHL Championship shall be revised in order to optimize logistics.
The League decided against making any changes to the Regulations while the season is in progress, and also agreed to increase to four years the period of validity of the Regulations and that the number of amendments made to the Regulations during the preseason should be kept to a minimum.
The League shall introduce some additional measures to the Regulations in order to further strengthen the policy of openness on the part of the clubs toward the media. Communication with journalists is part of the professional responsibilities of our players and coaches.
The League plans to achieve a 5% total annual increase in the potential audience for broadcasts on all distribution channels, and to increase the number of broadcasts in HD.
The Board also approved plans for the further development of the Youth Hockey League (YHL) and Women's Hockey League (WHL) over the period running from now until 2023.
KHL President Dmitry Chernyshenko:
“Today we examined many of the results of the League's work over the last few years, and these positive outcomes show that we chose the correct path for development. It is particularly satisfying to see such results in this, the tenth season, so we can regard these improvements as our anniversary presents to ourselves. At the same time, we must keep in mind that we are still at an intermediate stage. Our new, seven-year development strategy is a serious mission with ambitious targets. An increase in clubs' commercial revenues, a decrease in their reliance on state funding, Financial Fair Play, territorial expansion of the League, narrowing the gap in quality between the teams, and raising the entertainment value of matches in the Championship - these are just a few of our goals. I am confident that together we can bring our ambitious plans to fruition.”