NHL Lockout Impact on KHL Revenue and Growth

Well, my friends and fellow hockey fans, the NHL lockout continues to our overwhelming disappointment. We tweet and blog our frustrations at both the NHL and NHLPA, but with what success? Even with now outed NHL hired focus groups, it seems our voices have fallen on deaf ears. After all, we are just fans, right? We matter only when it is convenient for these millionaires and billionaires. So while these two parties quibble over who gets more of our money, we have to fill our hockey void. So where do we go?

AHL? OHL? WHL? NCAA? All wonderful options, but we all know that there is a true number one league in the world right now and it is the Kontinental Hockey League (KHL)

This league is new (the International Professional Ice Hockey League in Eurasia founded only in 2008), compared with NHL, and it has yet to gain the nod from all of the NHL pro players who visit “Vodka land”.  The league has issues with player safety, some book keeping, and possible “alleged” racketeering or thrown games controversies. It is not easy to attract all of the NHL superstars to come over and start playing here. Crosby is a good example of a top-notch talent who is somewhat hesitant to come over and play in Russia.

But all of the bad PR and malarkey aside the real truth about KHL is that it has money to woo some players and with some of the biggest Russian names in hockey coming over to play for KHL clubs, the league sees an immediate impact in the amount of ticket sales around the league’s arenas. Their Russian superstars that play in the NHL and other North American players bring another aspect to a hockey game that is somewhat missing in the European hockey. The aspect is, well, skill.

The skill is always there but it always gets poached by the NHL due to the higher income that the players can make while playing in the North American league. The problem with North American hockey is that it is played on a smaller surface, which some would argue nerfs the skill of the best players in the world.

In the KHL there is a bigger ice surface and this allows fans to see the talent of these players let loose. The speed, the passing, and the overall style changes from dump-and-chase to a puck possession, skill-based game. This is exciting and highly watchable hockey, and is something the NHL has been trying to produce since the last lockout in 05.

The KHL not only finds itself highly motivated and rejuvenated from the NHL lockout and the influx of top world players, but the sales of tickets are something that the league officials have noticed right away. They see a direct impact of these big names playing at a local venue and the revenue due to ticket sales, something that may cause the NHL to take notice. The numbers may surprise some people and the impact of Kovalchuks, Ovechkins, Malkins, and Charas showing up in the arena has directly affected the increase in revenue.  It hasn’t gone unnoticed by KHL officials, and I am sure they will try their best to start poaching even more NHL stars because they have nothing to lose and everything to gain.

Some of the tweets may shed some light on how drastic the impact of the NHL supertars for all of the areans around Russia:

“@SlavaMalamud: Evgeni Kuznetsov, KHL PR Dept’s biggest headache. “When NHLers leave, the arenas will be empty” #Caps #SuspensionForFlagrantTruth (Sportbox)”

And some direct impact from my birthcity…

“@Alfijs_LV: @SlavaMalamud Riga sold out for game against magnitka. Gonchar, Malkin, after comes Traktor half arena emty.”

So these superstars are generating revenue for the arenas and cities where these games are being played. The impact is felt by the governments, and the league officials will no doubt have had the light shone on what these stars mean to the fans and their wallets.

There is a difference between expecting something and actually feeling the effects of it. So while the NHL is trying to figure out how to take an increasing amount of revenue from the players’ pockets, money that they currently are not making because of the lockout, the players are playing overseas and no doubt helping other leagues generate some real revenue and some positive PR for their local hockey fans. The next step? Well, it is no doubt to get some exposure in North America.

We have already seen ESPN jump on the KHL bandwagon and broadcast some games, which of course is good for KHL business as it gets even more exposure and revenue. The KHL league is maturing and is now not only part of Russia but is part of multiple European countries. With ESPN providing North American exposure and the ability for the NA fans to see their favorite players play on, in my opinion, the better and bigger ice surface can only continue to grow the league. The games that are coming to NYC and the new highly underused by the NHL Barclay Center, should generate even more exposure.  It would surely be nice to see some NHL players play some hockey as well, if the NHL lockout continues.

So while the NHL is trying to squeeze every dollar it can from the players, these are fictional dollars since they are currently making nothing.  In the meantime, the players are playing and showing their skills to other leagues and markets. The players are exposing their talents to the rest of the hockey world and generating revenue for these teams at the same time. Only time will tell whether this benefits the NHL or will maybe help other markets retain more players they produce and increase the popularity of the sport. Will the KHL take notice of the money it is making with the NHL superstars on board and provide the facilities NHL players demand to keep them around longer? Will some of the Russian superstars stay in the KHL?