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KHL facing MAJOR economic crisis


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  The KHL is in big trouble. The rubble is in a nosedive do to the economic sanctions that Putin and Russia are facing in the continuous saga over who has the biggest wee wee in the world, and as the rubble nosedives so does the KHL's chances to continue, at least as presently constituted.

  Roughly one third of the leagues teams are in serious financial straights, with 3 teams on the verge of folding. I wrote to Chad Billins, the Hero of Ferris State who played for the Grand Rapids Griffins and had a brief cup of coffee with the Calgary Flames before signing with the HC CSKA in Moscow team and was granted his release this week and he is coming back to the States in search of more stable employment. I hope to be able to have a bit more 'first hand' information on the financial situation in Russia soon.

 

  What is known is the coaches are not being paid, North American players are scrambling to secure employment in other countries and the KHL is being hit hard by Western Sanctions and falling crude prices ravaging the Russian economy.

 

  What does this mean to players such as Radulov, Kovie, Burmistrov and the Kostistyn brothers to name a few of the probably 50 or so NHL caliber players currently playing in Russia? Right now, nothing but rumors are going around that if the economy does not right itself the KHL will be forced to look at realignment and cost cutting measures will have to be taken. Rumors of a possible 20 percent cut in pay across the board have been mentioned, short term, which has to have the N.A. players who left for Europe looking for that one last payday absolutely thrilled.

  Anyway, that's that. I am a big fan of European hockey, i know the NHL has been wearily eyeballing the KHL and wondering what they can do to push them down a peg or two, (many, if not most teams, IMHO are somewhere around AHL quality, a few better, a few worse) and something Bettman had no control over, falling oil prices and sanctions may do the job for him.

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Funny only a year ago people were concerned about NHLers leaving to go play there for big money.

I don't think the league is done, far from it but after an absolute meteoric rise from nothing to a quasi-threat worthy of notice by the NHL, the current financial threat that is causing wide spread panic in Russia has the league teetering. I think they will contract, step away from the Western European expansion that has been in the works and force them to slow down. Guys such as Sobotka will likely come flying back to the states, either this year or next depending on if the team they play for makes it thru the chaos.

 

  I love this type of stuff. I can tell you every franchise shift in the history of the WHA, i live reading their history as they fought to gain a toe hold against their big brother. This whole mess in Russia kind of reminds me of that.

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I don't think its done. I just never saw star players wanting to live in Russia with all its quirks. Europe is a different story. But if I had my druthers, I'd play in the best league in the world.

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I don't think its done. I just never saw star players wanting to live in Russia with all its quirks. Europe is a different story. But if I had my druthers, I'd play in the best league in the world.

 

That was the major competition from where I sat*.

 

No one wants to play in Omsk. Prague is another story altogether. Berlin. Bratislava.

 

As long as it is a "Russian" league it will always be subject to the whims of the oil market and the ruble - not to mention Putin.

 

SIDE NOTE: Popular joke in Russia? What do Putin, oil and the ruble have in common? They'll all hit 63 next year"

 

 

 

* it is a nice couch.

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Amazing how things can change in a few short months.

Look for more sanctions to roll out in the coming days, which will worsen things further.

What the Saudis, OPEC and the Americans have done here with oil prices is fascinating. Putin doesn't look so tough suddenly...

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What the Saudis, OPEC and the Americans have done here with oil prices is fascinating.

 

OPEC is flooding the market to make American shale extraction (and the Canadian tar sands) much less profitable.

 

Russia has the double problem of dropping price plus the international sanctions.

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OPEC is flooding the market to make American shale extraction (and the Canadian tar sands) much less profitable.

 

Russia has the double problem of dropping price plus the international sanctions.

 

 

Thanks, that's better stated. Interesting article on the effectiveness of the sanctions from today:

 

http://www.forbes.com/sites/timworstall/2014/12/17/the-russian-sanctions-are-working-thats-what-is-hitting-the-ruble/

 

And on the trouble for the KHL: http://www.si.com/nhl/2014/12/17/khl-heading-for-collapse-last-gasp-for-boston-bruins-more-highlights

 

Karma is most definitely a cruel, evil bitch

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  I may be wrong, but from what I can gather, the rich teams/owners in the KHL are so well off, they could bank role the entire league and not even blink. We are talking multi-billionaries here, so rich it's hard to fathom. If the guys at the top chose to, they could single handedly save the entire league, just don't know if that would be on their agenda.

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  • 2 weeks later...

 I may be wrong, but from what I can gather, the rich teams/owners in the KHL are so well off, they could bank role the entire league and not even blink. We are talking multi-billionaries here, so rich it's hard to fathom. If the guys at the top chose to, they could single handedly save the entire league, just don't know if that would be on their agenda.

 

 

That may be true, but those bank roles are now about half the value with the ruble still sliding. It sounds like it's shaping up to be Russian players versus foreigners when it comes to who gets paid. Lots of players recently waived, and not Russians: http://news.nationalpost.com/2014/12/22/canadian-players-in-the-khl-seeing-paycheques-cut-after-the-russian-ruble-collapse/

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  • 4 weeks later...

 

During the KHL’s all-star weekend, president Dmitry Chernyshenko spoke to media and told them that he wants to, and plans to, slice the KHL’s salary cap by 50 million rubles each season until 2017-18. A cut of that magnitude is equal to roughly $750,000 USD per season. Were the ruble to stay at its current value, the cuts would leave the KHL’s salary cap at an estimated $14.5 million.

http://www.thehockeynews.com/blog/cuts-to-khl-salary-cap-could-mean-nhls-rival-league-is-a-rival-no-longer/

 

The KHL needs to consolidate in order to survive.

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I think they did expand too far, too fast with far too many teams.

 

If they have more of a plan than "whoever has great big gobs of oil money, start a team now" they could regain their footing.

 

I think Central Europe is essential for them to really compete for talent. Omsk, Magnitogorsk and Vladivostok (or wherever) isn't going to do it.

 

Prague? Zagreb? Riga? Bratislava?

 

IF they can develop more towards central europe than central asia, that's their future.

 

Or someone else's.

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