The road to the salary cap

On December 11, KHL President Dmitry Chernyshenko had his annual meeting with the directors of the KHL’s clubs. During the discussions, various amendments to the KHL’s regulations were reviewed. The most significant changes concern the implementation of a hard salary cap, which will be introduced next season. Here’s a run-down of how the new rules affecting players’ salaries will operate.

How it works now

In the 2019-20 season, clubs are operating under a ‘soft’ cap. The total permitted playing budget is 800 million rubles and any club exceeding that limit is obliged to pay 30% of that excess in the KHL Stabilization fund.

Next season

The salaries of all players listed as part of the roster of the KHL team – including those sent to any farm club in the VHL – will be included in the cap calculations. This applies even to players who do not play in a single game.

The types of income included in the salary cap are as follows:

- Salary;

- Individual bonuses worth more than 20% of the player’s salary;

- Team bonuses worth more than 20% of the combined team wage bill;

- Other material benefits for players and their immediate families, including travel, accommodation, education services etc.

The full list is available in Art.51 of KHL Legal Regulations.

Not included in the salary cap:

- Individual bonuses worth less than 20% of the player’s salary;

- Team bonuses worth less than 20% of the combined wage bill;

- Prizes for teams finishing in the top four positions after the playoffs;

- Prizes for the top three players in the League;

- Salaries of players on two-way contracts with the Junior Hockey League, or playing for the KHL team while aged 21 or under;

- Salaries of any player who listed as injured with an expected return date no earlier than May 1;

- Sports equipment, meals for players.

Enforcing the cap

There are two key mechanisms to enforce the salary cap in the KHL:

- When applying to compete in the upcoming KHL season, any teams exceeding the cap must redraw their budget to come under the limit;

- Teams overspending during the course of the season will be prevented from signing new players until the playing budget is back under the salary cap.

Salary floor

In September, the KHL Board of Directors agreed to implement a salary floor starting from the 2020-21 season.

This will form part of the requirements for all teams in the league and will be reviewed each year when approving the competitors for the upcoming campaign. Each team will have to demonstrate a forecast budget that includes a minimum level of funding to pay its players. It will also need to provide proof of funds from the club’s sponsors or owners. Next season, the minimum will be 35% of the salary cap, i.e. 315 million rubles. The level will increase step-by-step until 2023-24, when it will be 55% of the cap (495 million rubles).

The floor that will be 270 million rubles includes players’ basic salaries, individual bonuses and team bonuses.

The league will adopt a ‘three strikes’ policy to deal with breaches of the rule:

- First offense – a fine of 50% of the difference between the official ‘floor’ and the club’s actual expenditure;

- Second offense – a fine equivalent to 100% of the difference between the official ‘floor’ and the club’s actual expenditure;

- Third offense – expulsion of the club from the KHL.

Also on the agenda

The meeting also dealt with several other issues ranging from the size of the ice in KHL games to a review of the smart puck technology deployed for the first time this season:

KHL-NHL Memorandum

A revised memorandum of understanding between the NHL and the KHL provides more detailed rules on the mutual enforcement of arbitration arrangements between the two leagues.

Rink sizes

This season, teams in the KHL are using three different sizes of ice in their arenas. Following a poll of all 24 clubs, it became clear than an absolute majority (16 out of 24) favors a uniform playing surface of 60x28m.

In response the league has decided that all teams should move to a smaller rink size by the start of the 2021-22 season allowing playing both 60x28 and 60x26 surfaces. Before the start of next season, five teams (Jokerit, Lokomotiv, Salavat Yulaev, Traktor, Torpedo) will reduce the width of their rinks from 30m to 28m. Dinamo Riga and Kunlun Red Star will follow suit before the start of the 2021-22 season. Next season, 22 out of the 24 clubs in the KHL will play on a allowable size of ice pad.

Medicine and anti-doping

The KHL reiterates is zero tolerance stance on doping in sport. As in previous seasons, there is a memorandum of direct cooperation between the KHL and the International Ice Hockey Federation for the 2019-20 season. From September to November 2019, 112 doping tests were conducted jointly with the IIHF. A total of 440 tests are planned for the current season.

The KHL is constantly enforcing stricter requirements for the anti-doping awareness of medical staff and the players themselves. The league implements an anti-doping program developed jointly with RUSADA. Every player in the KHL, Junior Hockey League and Women’s Hockey is obliged to complete an online testing program. Without that certificate, they are not permitted to compete in the championship.

Smart pucks and big data

This season saw the launch of two ambitious projects designed to bring fans even closer to their favorite teams and to the league.

The ‘smart pucks’ rolled out from the start of the season are part of a world-leading set-up which delivers the highest level of data tracking for players and pucks in every KHL game. This sports telematics system offers a wealth of new statistical data, to the benefit of clubs and fans alike.

The league is in regular discussion with the coaching teams at all clubs, explaining what the system can offer and getting feedback. The telematics are gradually forming a part of the day-to-day life of every club in the league and as we work together to refine it, the system will become even more informative.

Fans also benefit from the opportunity to access smart stats, generated in real time.

The second project is more directly linked to fan experience. In March of this year the KHL signed a contract with IT company SAP. The data specialist will use its technologies to establish a detailed database of all interactions between fans, the KHL and individual clubs. A pilot project is already underway, involving Ak Bars, Metallurg and Spartak, and has compiled more than 867,000 individual fan profiles based on over 4.5 million transactions.

The long-term aim is to create a single database that records the full history of each fan’s interaction with the KHL. This information can then be used to enable the league and its clubs to communicate directly with each individual supporter, tailoring the message to their individual needs.