Targeted growth and work with fans: the KHL board meeting
Sep. 20 saw the latest meeting of the KHL’s board of directors in Moscow. Here’s a rundown of the key takeaways.
Eight seasons in profit
The board meeting summed up the financial results from the 2021-2022 season. For the eighth year in in a row, the league reported a profit. The total revenue remains unchanged at 2.8 billion rubles (about $45 million at current exchange rates).
Image 1:
Breakdown of KHL revenues for the 2021-2022 season
4% - other commercial revenues
12% - sale of TV and betting rights
14% KHL TV channels
19% deduction from bookmakers
2% payments and fines from clubs
49% advertising and sponsorship
Breakdown of KHL expenditure for the 2021-2022 season
8% investment in special projects
11% costs of KHL TV channels, realization of broadcast and streaming rights
13% payments to clubs
15% management and organizational costs
32% staging the KHL, JHL and WHL championships
21% fulfilling sponsorship obligations, conducting advertising campaigns, staging events etc
Naming rights sold for first time
The KHL continued its partnership with several leading brands, including SOGAZ, Rostelekom, Fonbet, Haier and Pochta Rossii. In addition, the Mir payment system joined the league’s partners, signing a two-year contract.
Fonbet became the KHL’s first ever title sponsor. Under a deal agreed in July, the competition will now be known as the Fonbet KHL Championship. Similarly, the Junior Hockey League now has Olimpbet as its title sponsor. Earlier in the summer, the same company supported the KHL’s inaugural 3x3 hockey tournament.
Individual KHL clubs have the opportunity to form their own partnerships with bookmakers. Most of them now have active contracts with gambling platforms and this is significantly boosting their revenues.
Payments to clubs
For the eighth season running, the KHL was able to make payments to its 22 member clubs. The total sum shared among the participants was 448, 295, 438 rubles (about $7.2 million), the third highest in the league’s history.
Metallurg received the biggest payment of just over 29 million rubles. Champion CSKA, earned 15.4 million for its success on the ice, and a total of 26.2 million. However, the Muscovites turned down targeted funding for its youth and junior programs and finished second in the overall payments. The team that earned least was Kunlun Red Star, with 5.3 million rubles.
The teams received an equal share of 30% of the league’s payment fund. A further 30% was distributed based on last season’s results, with 15% shared among the teams that made the playoffs and further payments based on post-season successes. A further 40% of the fund was shared on the basis of TV coverage of each club.
Team finances
The KHL continues to monitor the commercial performance of its teams with a view to reinforcing financial fair play and promoting sustainability.
Last season there were fewer teams getting into wage arrears. In addition, there was a significant reduction in both the number of delayed payments and the length of those delays.
Several clubs are making good progress in promoting online ticket sales. Last season, 72% of game tickets were sold online, up from 21% three seasons ago. Three clubs – Avtomobilist, Dynamo Moscow and Spartak – sold almost all their tickets online last season.
Clubs’ commercial strategies
In March 2021, the Board of Directors instructed all clubs to present a mid-term commercial strategy by the start of July 2022. Nineteen of the 22 member clubs delivered these proposals by the deadline and the remaining three are close to completion.
Building better relationships with fans is a big part of the clubs’ plans, along with analyzing trends, reviewing competitors and seeking potential new audiences. There has also been progress in maximizing the teams' commercial potential: after assessing their attractiveness to sponsors, they were able to set clear targets and outline the steps needed to achieve them. Clubs are also working hard to promote themselves online, improving their work with fans, providing internet ticket and merchandise sales and communicating directly with supporters.
The KHL’s experts have studied each strategy in detail and will make additional recommendations.
Officiating
The KHL’s chief referee, Alexei Anisimov, spoke about the working group that introduced some changes to the rules of the game for the current season. All the amendments are intended to encourage attacking play and speed up the game. The Junior Hockey League is trialling a new rule this season that will prevent players from holding the puck behind the net while their team-mates change lines. There are 69 officials working in the KHL this season (35 referees, 34 linesmen). Eight of these are making their first appearance at this level.
Recognizing the best
In an effort to encourage the development of future hockey stars, the KHL presented its first rating of sports schools and youth coaches. The rankings were drawn up following a survey of KHL players from last season.
The top schools at the end of the 2021-2022 season were at CSKA, Metallurg and Traktor. Moscow’s Beliye Medvedy and Rus schools, which are not attached to KHL clubs, also made the top 10.
These rankings are based on three factors, and the results of the past four seasons are taken into account. With each passing year, previous seasons will carry less weight in the ratings. The rankings look at performance in the KHL – was the player among the top 50 scorers in a season, or among the top five for plus / minus on his team. Additional factors include whether a graduate of the school has won a Gagarin Cup or played in more than 500 KHL games. The total number of KHL players from each school is also considered. International recognition is the third area, with extra points for schools that nurtured medallists at the Olympics, World Championship and World Junior Championship.
The rankings will help to promote a pathway from youth hockey to the professional game, enabling the best players to move seamlessly from their club’s school into the JHL, VHL and ultimately the KHL.
A databased of 1.5 million supporters
As the KHL’s existing contract with SAP comes to an end, the league is entering into an agreement with a Russian company to provide the best way forward for our existing Unified Fan Database. At present, 16 clubs are working within this framework and the total number of recorded contacts is up 26% to more than 1.5 million.
In the 2022-2023 season, Ak Bars will work with the league to try out and fine-tune an updated system. Following this, all participants will be able to make a seamless transition to the new system.
Working with fans
The league is firmly focused on efforts to develop its audience, which is one of the key parts of the development strategy. Working with spectators forms part of the overall club rankings, but in recent years this has been suspended due to the pandemic. In 2021-2022, the KHL inspected the gameday experience at 195 regular season games and a further 16 playoff encounters. Avangard, Traktor and Barys were singled out for the quality of their work with supporters. Following the inspections, every club was given advice about future progress.
There will be more inspections in the current season, with visits to 12 regular season home games for every team and extra trips during the playoffs.
A new generation of hockey lovers
Both the league and its member clubs are working hard to attract a younger audience. A special collaboration with the Black Star music label saw the recent release of a special track by Slame and Anet Sai. ‘Doberemcya do Vershin’ (Get to the top) features Dynamo Moscow’s rising star Dmitry Rashevsky in the accompanying clip. Previously, artists from the label and popular bloggers became KHL ambassadors.
A further project to attract more young fans to the league is the “KHL Hockey Lessons” program. Cities with KHL teams have set up special classes for kids, with players, mascots and cheerleader groups presenting hockey cartoons and a KHL alphabet to youngsters. Several cities have already hosted these events, including Ufa, Minsk and Balashikha.
