Guest Post: Progress and Developments in the KHL
Welcome back, Tomáš Vorčák (@vorkywh24 on Twitter)! Tomáš has been keeping a close eye on the progress of the league’s new strategic plan, to which he introduced us back in May, and upon which he gave us an update in November. In today’s guest post, he looks at further developments in the strategic plan over the last month or so, as revealed at today’s meeting of the KHL Board of Directors. Read on!
The KHL Board of Directors had a meeting on December 13, 2017. I recommend that you read the results of the KHL Executive Board meeting from November 2017 (see link at the end of this post), when the same topics were on the agenda. The KHL Board of Directors discussed three topics: evaluation of the current season, evaluation of the KHL Strategy 2015, & preparing of the new KHL Strategy.
Regarding the current season, average attendance is 6089 fans per game which is a bit higher than last season. CSKA Moscow and Dinamo Riga, who had bad results last season, have grown their average attendance by 20% in 2017-18. In the East, Barys Astana’s & Lada Togliatti’s average attendance has grown by 45%.
The KHL Strategy 2015 reached its goal – the league is financially stable & making a profit every season. The league has shared over 710 million rubles with clubs since 2014-2015. For the same period of time, another over 830 million rubles was not distributed to clubs & was used, mostly, for the league´s fund.
The new KHL Strategy has been prepared for the period of 2017-2018 to 2023. The Strategy will be approved by the KHL Board of Directors at its next meeting in January of 2018. The Strategy has 12 departments: 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.
The clubs are able to earn 5-10% of the season’s budget from merchandising and other commercial activities. The league expects this figure to reach 25% by 2023.
The league has made an analysis of clubs‘ spending (travelling, front office & administrative etc). The results are not publicly available. The league revealed that there are big differences between clubs. The sums spent by clubs on travel and transport vary by a factor of six, and the sums spent on administrative activities vary by a factor of ten. The league will try to regulate the spending, and the aim is not to overspend.
The league will have 24 teams in the future and there is a plan to reorganise the league´s structure. To be concrete, the KHL plans to have six divisions with four teams each; today the league has four divisions. The league has not revealed when the new model will be put in place. The goal is to save money & time for travelling and increase the number of the rivalry games between traditional rivals or geographically close teams. Today the league has around 15% such games (15% of the total number of matches, in other words), and the plan is to reach 40%. The logic is simple: if there are more rivalry games or games which are interesting for fans, the clubs (and league) will earn more money. The KHL plans to have 60 regular season games in the future.
As we know, the league plans to decrease the salary cap to 600 million rubles, with 2 players not included in the cap & 20% bonuses outside the cap. There is an opinion that the salary cap will be too low. In reality, the cap will reach current league´s average, which clubs spend on players salaries. As Dmitri Chernyshenko said: “the clubs which make the play-offs spend around 750 million rubles on average.”
The league will exclude three clubs after this season. Russian agency R-Sport revealed that Lada Togliati, Yugra Khanty-Mansijsk and Severstal Cherepovets are the last three teams in the current version of the clubs‘ rating which was presented to the teams. Some minor changes in the rating are possible, especially if Severstal makes it to the play-offs. Lada & Yugra are clear candidates for the VHL in next season. There is also some worry about Admiral Vladivostok, who are once again suffering severe financial difficulties to go with poor performance at the box office and on the ice. However, Admiral’s geographical location in the Far East means that it likely makes much more sense for the KHL to keep them in the league, to avoid making already-tough travel schedules for several teams even worse.
Source: khl.ru, championat.com, rsport.ru
The KHL Executive Board meeting, November 2017:
The KHL Board of Directos meeting, December 2017: