Post by Zoom Waffles on Sept 13, 2008 16:19:02 GMT -5
What’s the deal with international hockey?
The question on everyone’s mind all summer long hasn’t gotten any easier to answer. With changes being attributed to a hundred different factors, does anyone really know what’s going on anymore? I like to think that I do. So, if you’ve been wondering “what’s the deal”, brace yourself for a rapid-fire explanation of the international, interleague, and quite literally political situation of world hockey today.
First of all, any look forward is meaningless without the context of where we’ve been. The history of professional ice hockey, and ice hockey in general, is a fascinating evolution, inextricably linked to European immigration to North America. Trying to determine who actually invented the sport is a task that has been all but abandoned by sports historians. Some say it was the Mi’kmaq tribe of the Quebec region who adapted their popular sport, lacrosse, to an on-the-ground ice game. Others contend it was Dutch settlers who played field hockey on the ice, coincidentally creating a new sport. Still others (in fact, the majority) argue that it was British soldiers and settlers in Canada who knocked a ball around with their canes on the frozen ponds of Quebec and Ontario. In reality, it was probably a combination of all three that evolved into our favorite sport – the hard-hitting checks of Mi’kmaq lacrosse, the basic rules of Dutch field hockey, and the innovation of the Brits on ice.
One fact is, however, indisputable – the game of ice hockey was invented in Canada. So what? The nationalistic implications of hockey begin there. Hockey is Canada’s sport – it always has been and, as far as the Canadians are concerned, it always will be. But for quite some time, the inhabitants of colder climates in Europe and Asia have been playing the game as well, trying their best to compete with the original. In 1885, the first recorded European ice hockey game was played in St. Moritz, Switzerland between Oxford and Cambridge (this game is still played annually, competing for the Patton Cup). The sport continued to spread from there through Scandinavia and into Russia. When the IIHF was formed in 1908, it was a Frenchmen who took the helm as President. In fact, North Americans have only held this post on three occasions, representing nine years of the federation’s 100 year history.
Professional hockey leagues have existed abroad for more than half a century. In 1935, the first British league was formed under the auspices of the IIHF. In the 1950s and ‘60s, leagues sprang up across the Eurasian continent in Italy (1952), Germany (1958), Finland (1960), Russia (1961), and Sweden (1963). It’s difficult to say whether these leagues were even remotely as competitive as the NHL, but at least we know they were there.
Before the fall of the Berlin Wall and the demise of the Soviet Union, there was simply no interaction between East and West in terms of hockey. Soviet players did not play in the NHL, and very few Europeans made the trek to North America. Nonetheless, as early as 1947, European teams were winning world championships. Clearly, the sport had globalized, and the Eurasian Invasion had begun. Having proven their ability to compete, the foreign powers began to invest more and more money into their leagues, gradually gaining ground on the NHL. Meanwhile, the NHL lost some of its prestige. Through the 1960s, as the Original Six were still the only teams in the league, Americans began growing tired of the league. The NFL and MLB continued to grow and take hockey’s viewership. Seemingly unaware of hockey’s growth in Europe (and more importantly, the untapped wealth of talent developing there), the NHL continued as it was, a collection of Canadians and Americans skating through six cities.
The late ‘60s and 1970s proved to be the do-or-die time for the NHL. First, with the significant expansion that added Pittsburgh, Philadelphia, St. Louis, Minnesota, Los Angeles, and Oakland, the NHL appealed to a wider audience, now stretching from coast to coast. Second, the creation of the WHA in 1972 lit a fire under the NHL’s figurative butt, forcing it to increase salaries and improve the overall fan experience in order to compete. This change proved to be the most important. After a seven year battle between the two leagues, the NHL emerged victorious as a significantly changed league. The league absorbed four WHA franchises (New England [Hartford], Quebec, Edmonton, and Winnipeg) to bring the NHL to 21 teams (five expansion franchises had joined the NHL throughout the ‘70s).
By 1980, the NHL was the largest elite league in the world and, many thought, the greatest. But, with the Miracle On Ice game of 1980, it’s clear that the quest for hockey dominance still remained unfinished. The Cold War fueled the Soviet-Canadian on-ice battles through the Summit Series and other such events, and Canada desperately tried to reclaim the game as its own.
Meanwhile, as the NHL became more successful and began what I would consider the true modern era (1980 and beyond), European elite leagues struggled to keep up. In the smaller nations (Germany, Finland, Sweden) there simply wasn’t enough revenue to pay the players as well as in the NHL. In the larger nation of the Soviet Union, the government was trying to compete with the Americans in all realms, and resources were stripped from the hockey league. The general poverty of the country’s citizens caused a decline in attendance, which in turn lead to a decline in player salaries. By 1985, the NHL was clearly the richest league in the world.
The clear dominance of the NHL encouraged Europeans to join. Throughout the 80s, teams gained more and more European players including, notably, players like Petr Svoboda, drafted 5th overall in 1984, or Ulf Dahlen, 7th overall in 1985. Gradually, Russian players began joining these Europeans in the NHL as well, defecting from their Russian teams on road trips and international events, much like Evgeni Malkin was forced to do in 2005.
So the NHL was it. The undisputed number one league in the world. But no one would ever be satisfied with that, and no one ever will be (except NHL officials, of course). Entrepreneurs around the world have always believed that there is more money to be had – the WHA proved it. It is possible for a league to be formed and rival the NHL while enjoying at least modest success. Many tried to recreate the WHA – the Global Hockey League, the second WHA, and others thought that by bringing hockey to cities desperate for a team, or with a market large enough to support two teams: Detroit, Quebec, Halifax, Hamilton, Toronto, Miami, and Vancouver. In fact, these teams would have been successful in drawing attendance, if only they could draw top talent. And therein lies the problem: no league can find enough money to pay their players as well as NHLers.
The average player in the NHL in 2006-2007 made a remarkable US$1.16 million. Meanwhile, in the Swedish Elitserien (a top five world league), the average salary was US$134,808. That fact alone answers many questions. Certainly players like Lundqvist, Sundin, or Alfredsson would prefer to play at home, but for 10% of their current salary? That’s a tough sell.
No, the only way that any league could ever rival the NHL would be to offer comparable salaries. And that could never happen, right? The newly formed Kontinental Hockey League (KHL) is out to change that fact. The KHL comprises the old RSL (Russian Super League) and several other Eurasian franchises into what is clearly the #2 league in the world. From young Russians like Maxim Mayorov and Nikita Filatov, to NHL defectors like Alexei Zhitnik and Alexander Radulov, and nearly washed up NHL veterans like Jaromir Jagr, the KHL has developed a moderately competitive talent pool. And, more importantly, they’ve found the money to offer relatively massive contracts.
There are three keys to the success of the KHL. First and foremost, all salaries are tax-exempt, which means that US$7M is US$7M, while in North America a salary of $7M may mean more like $5.5M. Second, there is no maximum salary for younger players. While NHL entry-level deals max out around $980,000, an 18-year old Russian superstar like Malkin circa 2005 can now earn upwards of $5,000,000 in his first year in the KHL. This is a huge incentive for these young stars to remain in Russia for their first few years. The third key is the KHL’s money for ‘four star players’. Each team in the KHL works under a $23M salary cap, but a set portion of that cap ($6.8M) must be used for only four players. This means that KHL teams are strongly encouraged to recruit top talent in order to spend the maximum of this $6.8M cache of cash.
These three factors all have contributed to the initial success of the KHL, and have encouraged other players to make their way to Russia. Each year, more and more players are making the transfer, developing the talent of the KHL and diminishing that of the NHL. With more talented players comes more devoted fans, and with more devoted fans comes higher revenue, which in turn means higher salaries. The point is, at the rate we’re going, the KHL will have a salary cap nearly as high as that of the NHL – and in a country with a lower cost of living. Unless the NHL takes action soon, it’ll find itself losing talent at an exponential rate, eventually folding or disintegrating into a series of low-budget feeder leagues for the KHL.
So what can the NHL do? First, the NHL should eliminate any rule that stipulates maximum salary for a player. This will encourage young superstars like Filatov and Malkin to come to the NHL immediately, without signing contracts in Russia. Secondly, it should continue to develop ways to attract American viewership through events like the Winter Classic. The game needs to be publicized more effectively in the United States through a significant effort by USA Hockey. It is in that organization’s best interest to continue to develop youth interest in ice hockey across America, which will, in turn, spark interest in the NHL.
Third, the NHL should consider matching the format of elite European leagues. In Sweden’s Elitserien, for example, the elite league (SEL) is composed of 12 teams. At the end of the season, the bottom two teams play in a series with the top two teams from HockeyAllsvenskan, the #2 league in Sweden. The top two teams from this series (which is called Kvalserien) are then promoted to the SEL for the following year, while the other two teams are demoted to HockeyAllsvenskan. It is important to note that HockeyAllsvenskan is NOT a junior league – it’s just a second-tier pro league. This system is also common for soccer leagues abroad. But the most important part of the system is that each team not only has their pro team, but also a series of developmental squads.
Imagine this: Nearly every major US and Canadian city has a hockey franchise (from Saskatoon and Thunder Bay to Portland and Las Vegas). Each franchise is divided into three or four levels. You’d have the Pittsburgh Penguins ‘A’ (the NHL team), then Penguins ‘B’ (basically AHL), Penguins ‘C’ (ECHL), etc. Now we’re talking about some 100ish franchises having three squads each. 300ish teams with 25 players per team provides the opportunity for 7500 boys and men to play pro hockey. What would this do? First, you’d have hockey virtually everywhere in North America. Second, you’d have very strong developmental systems. Third, greater pride in the place for which you play since you’ve been there longer. The list goes on and on.
Now I’m rambling, but my point has been made. The success of the KHL is real, and the threat to the NHL exists. If the NHL is going to save itself, now is the time for major structural change. And what better way to change than to emulate your rivals?
The question on everyone’s mind all summer long hasn’t gotten any easier to answer. With changes being attributed to a hundred different factors, does anyone really know what’s going on anymore? I like to think that I do. So, if you’ve been wondering “what’s the deal”, brace yourself for a rapid-fire explanation of the international, interleague, and quite literally political situation of world hockey today.
First of all, any look forward is meaningless without the context of where we’ve been. The history of professional ice hockey, and ice hockey in general, is a fascinating evolution, inextricably linked to European immigration to North America. Trying to determine who actually invented the sport is a task that has been all but abandoned by sports historians. Some say it was the Mi’kmaq tribe of the Quebec region who adapted their popular sport, lacrosse, to an on-the-ground ice game. Others contend it was Dutch settlers who played field hockey on the ice, coincidentally creating a new sport. Still others (in fact, the majority) argue that it was British soldiers and settlers in Canada who knocked a ball around with their canes on the frozen ponds of Quebec and Ontario. In reality, it was probably a combination of all three that evolved into our favorite sport – the hard-hitting checks of Mi’kmaq lacrosse, the basic rules of Dutch field hockey, and the innovation of the Brits on ice.
One fact is, however, indisputable – the game of ice hockey was invented in Canada. So what? The nationalistic implications of hockey begin there. Hockey is Canada’s sport – it always has been and, as far as the Canadians are concerned, it always will be. But for quite some time, the inhabitants of colder climates in Europe and Asia have been playing the game as well, trying their best to compete with the original. In 1885, the first recorded European ice hockey game was played in St. Moritz, Switzerland between Oxford and Cambridge (this game is still played annually, competing for the Patton Cup). The sport continued to spread from there through Scandinavia and into Russia. When the IIHF was formed in 1908, it was a Frenchmen who took the helm as President. In fact, North Americans have only held this post on three occasions, representing nine years of the federation’s 100 year history.
Professional hockey leagues have existed abroad for more than half a century. In 1935, the first British league was formed under the auspices of the IIHF. In the 1950s and ‘60s, leagues sprang up across the Eurasian continent in Italy (1952), Germany (1958), Finland (1960), Russia (1961), and Sweden (1963). It’s difficult to say whether these leagues were even remotely as competitive as the NHL, but at least we know they were there.
Before the fall of the Berlin Wall and the demise of the Soviet Union, there was simply no interaction between East and West in terms of hockey. Soviet players did not play in the NHL, and very few Europeans made the trek to North America. Nonetheless, as early as 1947, European teams were winning world championships. Clearly, the sport had globalized, and the Eurasian Invasion had begun. Having proven their ability to compete, the foreign powers began to invest more and more money into their leagues, gradually gaining ground on the NHL. Meanwhile, the NHL lost some of its prestige. Through the 1960s, as the Original Six were still the only teams in the league, Americans began growing tired of the league. The NFL and MLB continued to grow and take hockey’s viewership. Seemingly unaware of hockey’s growth in Europe (and more importantly, the untapped wealth of talent developing there), the NHL continued as it was, a collection of Canadians and Americans skating through six cities.
The late ‘60s and 1970s proved to be the do-or-die time for the NHL. First, with the significant expansion that added Pittsburgh, Philadelphia, St. Louis, Minnesota, Los Angeles, and Oakland, the NHL appealed to a wider audience, now stretching from coast to coast. Second, the creation of the WHA in 1972 lit a fire under the NHL’s figurative butt, forcing it to increase salaries and improve the overall fan experience in order to compete. This change proved to be the most important. After a seven year battle between the two leagues, the NHL emerged victorious as a significantly changed league. The league absorbed four WHA franchises (New England [Hartford], Quebec, Edmonton, and Winnipeg) to bring the NHL to 21 teams (five expansion franchises had joined the NHL throughout the ‘70s).
By 1980, the NHL was the largest elite league in the world and, many thought, the greatest. But, with the Miracle On Ice game of 1980, it’s clear that the quest for hockey dominance still remained unfinished. The Cold War fueled the Soviet-Canadian on-ice battles through the Summit Series and other such events, and Canada desperately tried to reclaim the game as its own.
Meanwhile, as the NHL became more successful and began what I would consider the true modern era (1980 and beyond), European elite leagues struggled to keep up. In the smaller nations (Germany, Finland, Sweden) there simply wasn’t enough revenue to pay the players as well as in the NHL. In the larger nation of the Soviet Union, the government was trying to compete with the Americans in all realms, and resources were stripped from the hockey league. The general poverty of the country’s citizens caused a decline in attendance, which in turn lead to a decline in player salaries. By 1985, the NHL was clearly the richest league in the world.
The clear dominance of the NHL encouraged Europeans to join. Throughout the 80s, teams gained more and more European players including, notably, players like Petr Svoboda, drafted 5th overall in 1984, or Ulf Dahlen, 7th overall in 1985. Gradually, Russian players began joining these Europeans in the NHL as well, defecting from their Russian teams on road trips and international events, much like Evgeni Malkin was forced to do in 2005.
So the NHL was it. The undisputed number one league in the world. But no one would ever be satisfied with that, and no one ever will be (except NHL officials, of course). Entrepreneurs around the world have always believed that there is more money to be had – the WHA proved it. It is possible for a league to be formed and rival the NHL while enjoying at least modest success. Many tried to recreate the WHA – the Global Hockey League, the second WHA, and others thought that by bringing hockey to cities desperate for a team, or with a market large enough to support two teams: Detroit, Quebec, Halifax, Hamilton, Toronto, Miami, and Vancouver. In fact, these teams would have been successful in drawing attendance, if only they could draw top talent. And therein lies the problem: no league can find enough money to pay their players as well as NHLers.
The average player in the NHL in 2006-2007 made a remarkable US$1.16 million. Meanwhile, in the Swedish Elitserien (a top five world league), the average salary was US$134,808. That fact alone answers many questions. Certainly players like Lundqvist, Sundin, or Alfredsson would prefer to play at home, but for 10% of their current salary? That’s a tough sell.
No, the only way that any league could ever rival the NHL would be to offer comparable salaries. And that could never happen, right? The newly formed Kontinental Hockey League (KHL) is out to change that fact. The KHL comprises the old RSL (Russian Super League) and several other Eurasian franchises into what is clearly the #2 league in the world. From young Russians like Maxim Mayorov and Nikita Filatov, to NHL defectors like Alexei Zhitnik and Alexander Radulov, and nearly washed up NHL veterans like Jaromir Jagr, the KHL has developed a moderately competitive talent pool. And, more importantly, they’ve found the money to offer relatively massive contracts.
There are three keys to the success of the KHL. First and foremost, all salaries are tax-exempt, which means that US$7M is US$7M, while in North America a salary of $7M may mean more like $5.5M. Second, there is no maximum salary for younger players. While NHL entry-level deals max out around $980,000, an 18-year old Russian superstar like Malkin circa 2005 can now earn upwards of $5,000,000 in his first year in the KHL. This is a huge incentive for these young stars to remain in Russia for their first few years. The third key is the KHL’s money for ‘four star players’. Each team in the KHL works under a $23M salary cap, but a set portion of that cap ($6.8M) must be used for only four players. This means that KHL teams are strongly encouraged to recruit top talent in order to spend the maximum of this $6.8M cache of cash.
These three factors all have contributed to the initial success of the KHL, and have encouraged other players to make their way to Russia. Each year, more and more players are making the transfer, developing the talent of the KHL and diminishing that of the NHL. With more talented players comes more devoted fans, and with more devoted fans comes higher revenue, which in turn means higher salaries. The point is, at the rate we’re going, the KHL will have a salary cap nearly as high as that of the NHL – and in a country with a lower cost of living. Unless the NHL takes action soon, it’ll find itself losing talent at an exponential rate, eventually folding or disintegrating into a series of low-budget feeder leagues for the KHL.
So what can the NHL do? First, the NHL should eliminate any rule that stipulates maximum salary for a player. This will encourage young superstars like Filatov and Malkin to come to the NHL immediately, without signing contracts in Russia. Secondly, it should continue to develop ways to attract American viewership through events like the Winter Classic. The game needs to be publicized more effectively in the United States through a significant effort by USA Hockey. It is in that organization’s best interest to continue to develop youth interest in ice hockey across America, which will, in turn, spark interest in the NHL.
Third, the NHL should consider matching the format of elite European leagues. In Sweden’s Elitserien, for example, the elite league (SEL) is composed of 12 teams. At the end of the season, the bottom two teams play in a series with the top two teams from HockeyAllsvenskan, the #2 league in Sweden. The top two teams from this series (which is called Kvalserien) are then promoted to the SEL for the following year, while the other two teams are demoted to HockeyAllsvenskan. It is important to note that HockeyAllsvenskan is NOT a junior league – it’s just a second-tier pro league. This system is also common for soccer leagues abroad. But the most important part of the system is that each team not only has their pro team, but also a series of developmental squads.
Imagine this: Nearly every major US and Canadian city has a hockey franchise (from Saskatoon and Thunder Bay to Portland and Las Vegas). Each franchise is divided into three or four levels. You’d have the Pittsburgh Penguins ‘A’ (the NHL team), then Penguins ‘B’ (basically AHL), Penguins ‘C’ (ECHL), etc. Now we’re talking about some 100ish franchises having three squads each. 300ish teams with 25 players per team provides the opportunity for 7500 boys and men to play pro hockey. What would this do? First, you’d have hockey virtually everywhere in North America. Second, you’d have very strong developmental systems. Third, greater pride in the place for which you play since you’ve been there longer. The list goes on and on.
Now I’m rambling, but my point has been made. The success of the KHL is real, and the threat to the NHL exists. If the NHL is going to save itself, now is the time for major structural change. And what better way to change than to emulate your rivals?