The Russian sanctions are causing a realignment of European hockey

As the war in Ukraine continues, the world has continued its process of trying to shut Russia out of the global economy and geopolitics. Whether it is large corporations refusing to conduct business in the nation, the growing list of individuals and businesses sanctioned by the West, or elsewhere, the underlying thesis is the same: if you attempt to violate international norms, you won’t receive any of the benefits of being part of the global community.

The hockey world has taken a similar, albeit softer, approach given the autonomy of individual leagues and lack of interleague play around the world. The NHL cancelled the NHL/KHL Memorandum of Understanding, which agreed that both leagues would abide by the contracts of the other. The IIHF took a much harder line, effectively banning Russia and Belarus from all tournaments at all levels—club and country. The CHL’s three leagues are also considering banning Russian and Belarussian players from coming over to play as imports next season.

While each of these hockey and political decisions has a very swift impact when initially implemented, there is a slower more transformative current cascading through the hockey world which is transforming the way the game operates on a global level.

Here’s what’s going on

The KHL has broadly been owned and operated by the Russian government and those close to it. This includes teams owned by the Russian Interior Ministry (Dynamo Moscow), Russian state-owned energy companies Gazprom (SKA Saint Petersburgh), Rosfnet (CSKA Moscow), steel producer Severstal (Severstal Cherepovets), which is owned by billionaire Alexei Mordashov, and others.

Numerous KHL owners and executives were sanctioned directly or through their firms, including the heads of Gazprom, Rosfnet, Sevarstal, Mordashov, Oleg Belozerov of Russian Railways, the owner of Lokomotiv Yaroslavl, Viktor Rashnikov, the owner of Metallurg Magnitogorsk, among others.

The objective of the KHL has and continues to be the soft power influence of the Russian state through the world of sport. When it was founded, the objective was to create a league to keep Russian players in Russia and challenge the supremacy of the NHL, as noted here by James Mirtle. Since then, the league has had its bumps, on the ice and off it, but broadly has been heavily pro-Russia in spite of having member clubs in other countries.

Through the conflict in Ukraine, teams have continued to put out pro-Russian demonstrations and flags to support the cause. This includes the waving of the “Z” at games, the symbol of support for the war, pro-Putin demonstrations, and large banners supporting the government, including this one:

This has caused the IIHF to open an ethics investigation into the Russian Hockey Federation.

However things are changing

While the merits of sanctions have long been debated by political scientists and pundits, it appears they are making a major impact on Russian hockey. Two KHL teams are already not playing in the league next year, Jokerit of Finland and Dinamo Riga in Latvia. This leaves just three teams outside Russia in the KHL.

On top of that, Sevarstal appears to be on the verge of bankruptcy as Citi Bank blocked a loan payment to creditors earlier last week. Were the firm to default, it would leave the team and their affiliate sides in peril. Keep in mind of course that many Russia KHL sides own or have strong agreements with VHL (Russia’s AHL-equivalent) and MHL (Russia’s Junior hockey league) teams. If KHL clubs begin to teeter, the VHL and MHL will be the first to feel it.

This is beginning to happen with Sibir Novorsibirsk severing their ties with their VHL side Yuzhny Ural to cut costs. There are also rumours that Severstal is moving down to the VHL in order to cut costs. Official news is hard to come by but the longer the sanctions wear on, the harder teams and executives will be hit, which will lead to a much tougher sell to continue operating Russian hockey teams at all levels.

To make matters worse, the political fallout of this crisis is hitting the country’s ability to recruit European and North American players. Many this season felt trapped between a need to support their families with their wages and the desire to do what they felt right. Some like former Calgary Flame Kenny Agostino opted to leave, but many others did not or could not. Going into this season, it is hard to expect North American and European free agents to be tempted to play in the KHL, and even harder for teams to be able to financially lure them over.

What happens now?

We are starting to see the first stages of the Russian hockey system atrophy. How much further this goes is still to be seen, but the cracks are getting larger and the warning bells are sounding. This will make it harder for young Russian players to get the development that they need to contend at the highest levels of the game, either in North America or Eurasia.

There will be pressure on these players to stay in Russia, and the proposed blocking of Russian and Belarusian players from the CHL does not make this case easier. However, if there are not as many teams in the VHL and MHL system next year, it will make it hard for young talented players to stay home.

Then there is the inability to recruit or pay very good North America-based players or very good Europeans, who are maybe not good enough to be NHLers, but are expecting higher salaries and tougher competition than other European leagues will give them. They may not have the option to play in Russia anymore. These players are in Russia because it offered them great opportunities than leagues like the ECHL, but without the KHL as an option, they’ll be looking for new opportunities.

Add to that a brain drain of talented coaches, trainers, and other personnel who will be looking for new opportunities outside Russia due to the ongoing instability. Currency devaluation and rumours of players and coaches not being paid on time may further compound this issue.

European leagues are taking notice

What you end up with is a lot of talented hockey people looking for new homes, which could prove to be a huge boost to many of the European leagues. The SHL, DEL1, and Swiss National League in particular will see a huge surplus of talent coming their way as players fight for jobs in the best leagues in Europe. This will create a ripple effect where the players who end up getting bumped out of spots will push others in lower leagues like the HockeyAllsenskan, Czech Extraliga, AlpsHL, and others down.

This is quietly an enormous opportunity for European hockey leagues to reassert themselves as major players in the hockey world, breaking the KHL/NHL duopoly. They need to do three big things in order to make the most of this opportunity.

First, they need to start preparing for it now. Teams need to be actively seeking out the best talents that they can afford, and take the gamble to bring in high quality players that they can market to their fanbases. If they can increase fan engagement, they can increase gate revenue, and grow their respective leagues.

Second, leagues alongside the IIHF need to actively work on growing the game across Europe. Tournaments like the Champions Hockey League and other inter-European exhibition matches could be huge opportunities to build up fanbases and develop regional rivalries beyond individual leagues. Like the UEFA does with the Champions and Europe Leagues along with numerous international club matches in the offseason, this could be an opportunity to move the continental centre of power from Moscow to a city like Zurich, Munich, or Stockholm.

Finally, the NHL could play a huge role in this without appearing to politicize the conflict. A small gesture such as holding an exhibition friendly match between the winner of this year’s Stanley Cup and this year’s Champions Hockey League winner, Rogle BK, as part of a European tour for that team. This would give the team an opportunity to play in different arenas, grow their individual brand in a new market, and hopefully get some bonding prior to the start of the year.

All eyes on the international stage

Teams have previously been to Europe and Asia as part of growing the game initiative with generally positive views. Hopefully, the pandemic’s impact on international sports can be limited, as it’s long overdue for teams to grow the game overseas.

The European infrastructure already exists. There are excellent leagues across the continent, with teams boasting storied pasts and presents. The slow implosion of the KHL provides an opportunity for more talented players to join European teams and help enhance the talent bases of these leagues. When the KHL first came into being, it pushed the Eurasian centre of power East to Moscow, but now it may be time for Europe to reclaim that.

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