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The Cold War
Bloodied but unbowed, Russia’s Kontinental Hockey League refuses to let a tragedy derail its mission.
FOR CASUAL SPORTS FANS, news of the plane crash that killed 36 members of the Lokomotiv Yaroslavl hockey team last month was a grisly introduction to Russia’s Kontinental Hockey League. The NHL, on the other hand, knows the league well. It’s been keeping a close watch lately, as the KHL is mounting the first challenge to its control over professional hockey since the World Hockey Association folded in 1979.
The KHL is less a business than it is a national undertaking, which is precisely what makes it threatening. With zealous support from the highest levels of Russian government, the four-year-old league has leveraged the financial muscle of national industry, subsidizing player salaries in ways the NHL cannot match. Many Russian players are now staying home, joined by an increasing number of Scandinavian, Canadian and American imports. In fact, there are currently more North Americans playing in the KHL (30) than there are Russians in the NHL (18). For the powerful men who started the KHL, that shift in the international game has only just begun.
ON A LATE MAY AFTERNOON in 2004, Slava Fetisov sat in Russia’s Sports and Physical Culture Ministry an unhappy man. The former hockey superstar was holding forth on the NHL’s monopoly of international hockey and he had a wild idea: to build a new professional hockey league. One of the greatest players ever produced by the Soviet hockey system, Fetisov was part of the first wave of late-’80s Russian defects to the NHL. He won two Stanley Cups as a defenseman for the Red Wings, along with two Olympic golds and seven world championships. Post-retirement, however, Fetisov failed in his attempt to become the NHL’s first Russian coach. Instead, he returned to Russia in 2002, at which point then-President Vladmir Putin appointed Fetisov to his cabinet as the minister of sports and physical culture.
Fetisov’s plan was born of his frustrations not only with the NHL but also with the deterioration of Russian hockey. Why did the NHL get to make all the rules and have all the top players? After all, the Soviets had done as much to develop hockey as the Canadians. Simmering alongside him that day was Putin protégé Dmitry Chernyshenko. “Why is the NHL the only league with a draft?” Fetisov asked Chernyshenko. “Let’s have our own and draft NHL players.” Fetisov envisioned a base of Russian clubs, with new teams in former Soviet cities in Ukraine, Belarus and Kazakhstan. Future expansion would extend west into Europe and east into Asia. He named it the Euro-Asian Hockey League, the EAHL.
The idea didn’t take hold immediately. It wasn’t until May 2007, when the Russian national team won a disappointing bronze at the Ice Hockey World Championships in Moscow, that it gained steam. Following the game, Fetisov received a visit from Alexander Medvedev, a close Putin ally and the director-general of a subsidiary of Gazprom, the world’s largest exporter of natural gas. “We decided that this idea of the EAHL should be modified to concentrate on the European space,” says Medvedev. “This project was supported by Mr. Putin, as the godfather of the product from the very beginning.” In fact, Putin claimed it as his own idea, keen to leverage hockey—a national symbol of pride and nostalgia—for social and political ends.
There was just one problem: Russia already had a pro hockey league. Despite its high level of play, the state-run Russian Super League suffered from shoddy infrastructure and decaying rinks. All the same, the Russian Ice Hockey Federation was not about to relinquish its control over the sport. A political battle ensued. “Without support from Mr. Putin,” Medvedev says, “this fight with the federation would have lasted much longer.” Instead, within a year, Fetisov and Medvedev prevailed, in the process rechristening the EAHL the Kontinental Hockey League.
The timing could not have been better. Russian frustrations over the NHL had been slowly building to a fever pitch. At the tail end of the Soviet Union, NHL teams paid Russian clubs millions for the rights to their top players. Once the Soviet Union collapsed, these transfer payments ceased, and NHL teams began poaching players straight from Russian rosters. “The NHL was draining talent from all of Europe for nothing,” says Ilya Kochevrin, KHL vice president of marketing and communications. “They were paying peanuts, creating a monopoly on the market.” Complaints lodged by Russian club owners to the International Ice Hockey Federation fell on deaf ears. The situation boiled over when Evgeni Malkin, the second overall pick in the 2004 NHL draft, broke his contract with Metallurg Magnitogorsk to join the Pittsburgh Penguins in 2006. As the player it invested three years in developing won the scoring title, playoff MVP honors and the Stanley Cup, the Russian club sat back and seethed.
The KHL set out to change things. A master negotiator of complex multinational oil and gas agreements, Medvedev was appointed president of the league. He and Fetisov, chairman of the KHL board of directors, began targeting domestic industrial concerns to donate seed capital. “Alex was convincing,” Kochevrin says. “For these companies, the game of hockey is a social issue.” Six corporations contributed to the drive: Amurmetal, from the Siberian Far East; the Magnitogorsk Iron and Steel Works, located in southwestern Siberia; Interros, a conglomerate controlled by oligarch Vladimir Potanin; Tatneft, an oil and gas company from Tatarstan; Transneft, a state-controlled company that owns the world’s largest oil pipeline network; and the Kremlin-owned Gazprom, Russia’s largest company, which last year had revenue of $118 billion.
With financial and political backing, the KHL officially launched with 24 teams—21 holdovers from the Super League and three add-ons from Belarus, Latvia and Kazakhstan. On Sept. 2, 2008, the first puck dropped between Salavat Yulaev Ufa and Lokomotiv Yaroslavl.
THE LEAGUE HAS NOT GONE without its fair share of growing pains. The global financial crisis decimated the ruble, leaving many of the KHL’s millionaire players carrying their own equipment, playing in unwashed uniforms and even wondering about their next paycheck. In October 2008, Avangard Omsk winger Alexei Cherepanov died of cardiac arrest at a game in Chekhov—a highly publicized tragedy that highlighted the league’s subpar conditions and safety regulations. Then came the Lokomotiv tragedy, undoubtedly the KHL’s biggest challenge yet.
But NHL players squeezed out by the salary cap have stayed in Russia. And Russian players haven’t flocked back to the NHL. “They don’t want their country to look bad,” says a prominent North American agent with experience in Russia. “But has an NHL team been in a plane crash? No. Has a player died in an NHL game recently? No. Are these facts easy to ignore? They’re not.”
There are other facts to consider, though—facts that tell a different story. In less than four years, the KHL has instituted a salary cap of $25 million and drafted a collective bargaining agreement with the help of former NHL labor chief Bob Goodenow. While sensational tales of mafia-style payments in the KHL persist, more recent firsthand accounts describe a league that has improved its finances. “In the early days, you’d see burlap sacks of cash, but it’s more sophisticated now,” says longtime NHL agent Don Meehan.
Ritch Winter, another influential agent, has represented players in the Russian leagues since the dark days of the early 1990s. “It’s very much like a mini-NHL now,” he says. “They have a players’ association. You have arbitration to protect yourself. There is a transfer rule. Players can become free agents after a certain period of time. I have no trouble dealing with them now.”
And money from Russian industry continues to circulate. Several new rinks have been built, even amid the far-reaching poverty of the KHL’s regional outposts. Local residents just shrug. “They think, ‘Either this money will be stolen or we will have a new arena,’” says Vsevolod Kukushkin, an adviser to the KHL. “They prefer to have the new arena.”
In the KHL’s grand growth plan, the books often appear to take a backseat. Club operating budgets range from $12 million to $45 million, but teams are lucky to earn $4 million in annual revenue. Companies fund their clubs by tapping “special money” slush funds set aside for so-called cultural and social causes. “The Soviet Union used sport to elevate the profile of the country,” Winter says. “The KHL is no different than the past.” What is different is that Russia now operates an aggressively capitalist system, albeit under a Soviet mindset, with the state persuading big business to contribute to its major projects. KHL president Medvedev, however, maintains that “government is not interfering in sport matters.”
Clearly, though, these interests intersect. As Putin and Medvedev erect the apparatus to keep their hockey players home, Gazprom looks farther beyond Russia’s borders. “For Gazprom, the KHL is a mechanism to build a bridge to Europe and North America to support pipeline projects and the exportation of oil and gas,” says a senior NHL executive. “It’s clear when Putin shows up at a small hotel in Bratislava to support Russia’s bid to host the world championships that it’s a significant priority for the Russian government to use hockey as a geopolitical tool.” In 2008, Medvedev chaperoned a Gazprom all-star team of former Russian players, including Fetisov, on an exhibition tour to Quebec City. On the day the all-stars left Canada, Gazprom announced its first export deal to North America, jointly with a Quebec oil consortium.
From its headquarters on Sixth Avenue in Manhattan, the NHL brass watches the KHL encroach on its territory. In early October, the NHL launched its Russian-language website, at a time when the league has lost more than two-thirds of its Russian players since their numbers peaked in 2001. Yet league execs insist that they aren’t worried about the KHL. With a new TV deal and a new team in Winnipeg, the NHL has plenty of other fish to fry.
In Moscow, KHL executives speak of harmony and cooperation. Medvedev has even been looking to buy an NHL team. “I am 100 percent sure that the integration of world hockey is inevitable,” he says. “Isolation is bad for the economy and world relations.” And if any country understands the cost of isolation, it’s Russia.
The NHL also understands what it means to be left out in the cold. When the league’s last collective bargaining agreement expired in 2004, it lost an entire season, with many marquee names joining the Russian Super League. The NHL’s current CBA runs out next September.
For now, Putin is staying focused on the ice. The godfather of the KHL has been taking regular skating lessons. With Fetisov’s help, he is learning to play hockey in time for the Sochi Olympics in 2014. What sort of player will Putin become? A playmaker? A scorer? An enforcer? “My personal feeling,” Medvedev says, “is that he will be a very disciplined player on the ice.” Maybe so, but there is one thing about hockey— when competition heats up, discipline dissolves.