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Russia's KHL Dreams Melting Away

  • Tony Wesolowsky

Salavat Yulayev Ufa's goaltender, Iiro Tarkki (left), and Vitaly Proshkin defend against Ak Bars Kazan's Kirill Petrov in a KHL Gagarin Cup quarterfinal in Kazan in March 2013.

Salavat Yulayev Ufa's goaltender, Iiro Tarkki (left), and Vitaly Proshkin defend against Ak Bars Kazan's Kirill Petrov in a KHL Gagarin Cup quarterfinal in Kazan in March 2013.

The former president of the Kontinental Hockey League (KHL) once boldly predicted the Russian upstart would one day vie with North America's NHL as the world's top ice-hockey league. And for a brief period Aleksandr Medvedev seemed a credible soothsayer.

Backed with funding from Gazprom, where he just happened to work heading the export wing of the gas giant, Medvedev grew the mainly Russian league into a truly international one with 28 teams in six countries, including teams in Prague, Zagreb, and Helsinki.

With the future looking bright, the KHL even lured a few bona fide stars back from the NHL (including Aleksandr Radulov and more impressively Ilya Kovalchuk, who walked away from an eye-popping $77 million left on his 15-year contract with the New Jersey Devils).

It was all part of a broader effort to restore Russia's sporting pride, bruised by the loss of prestige it had enjoyed under the former communist system, and the plan was coming together.

Forward to 2015 and the ice has turned to slush for the KHL. With the Russian economy wheezing from sanctions over Ukraine to plummeting energy prices, Gazprom and other deep-pocketed Russian businessmen are far more wary to invest in a league that has yet to turn a profit over its seven years of existence.

Medevdev is out as well, replaced by a reputed ally of President Vladimir Putin more intent on bolstering the teams at home rather than expanding the league abroad.

Western Expansion Rolled Back

And many of the teams that were part of the bold expansion West have melted away as well, including Lev Prague, which went defunct in 2014 mere months after making it to the Gagarin Cup finals, the KHL's version of the Stanley Cup.

The freshest defection is HC Slovan Bratislava, which joined the KHL just two seasons ago, another piece of the puzzle to build a truly Eurasian league. The team's vice president, Juraj Siroky, told the Slovak daily Sme on May 11 that the team would mostly likely return to the Slovak domestic league for the 2015-16 season.

According to the Slovak daily, the team in the Slovak capital was dependent on Russian capital for the bulk of its financing. Over the past season (2014-15), there were reports of players going months without seeing a paycheck, something not unusual for the KHL, despite the occasional splurge on marquee players.

The days seem numbered as well for Medvescak Zagreb, just three seasons after joining the KHL. Such were its financial woes the Croatian team scrambled to field a full squad for a few games at the end of last season after many players simply left, frustrated over unpaid wages.

It wasn't finances, but fighting in their backyard that forced Ukraine's Donbas Donetsk to leave the league after the 2013-14 season.

No More Sugar Daddy

After that season, Lev Prague called it quits despite having made it to the finals, a first for a non-Russian team in the KHL. After struggling to attract fans, Czechs turned out as the team progressed in the playoffs. Game 4 of the final series in Prague against Metallurg Magnitogorsk attracted just over 17,000, still a KHL record.

Aleksandr Medvedev is no longer looking like much of a soothsayer.

Aleksandr Medvedev is no longer looking like much of a soothsayer.

The reason for Lev's downfall? Like other doomed KHL teams, it was reportedly the loss of financing from Gazprom and other companies.

No figures are available on how much Gazprom has sunk into the KHL, but Medvedev in 2014 denied the KHL was financially dependent on the energy giant.

"During the creation of the league, Gazprom contributed 850 million rubles, not a ruble more," he told the Czech website "All the other money came from commercial sponsors, the sale of TV rights, and souvenirs."

Medvedev was voted out by top KHL officials in November 2014, at a meeting also attended by President Putin. He was replaced by Dmitry Chernyshenko, the head of the Sochi 2014 Winter Olympics Organizing Committee.

Hockey Disappointments

According to Russian media, Chernyshenko was tasked by Putin with creating a "strong league that will form the basis for a strong national team." Russia last won a men's ice-hockey Olympic medal -- a bronze -- back in 2002. At home in Sochi last year, the Russians finished a disappointing fifth.

Chernyshenko has ties to powerful Putin ally Gennady Timchenko, serving in the Russian billionaire's Luxembourg-based Volga Group holding company.

Timchenko, a former judo partner of Putin's, has been targeted by U.S. sanctions over Russian actions in eastern Ukraine. Fourteen companies linked to him have been blacklisted by Washington.

Chernyshenko will need powerful allies to stabilize the KHL amid worrying signs that Russian clubs in the league are struggling as well.

Atlant Mytishchi, which played in a suburb of Moscow, has already announced it will not be coming back next season.

Spartak Moscow, a team with a long tradition going back to the Soviet era, sat out last season, although Yevgeny Myshkovsky, a former investor in Lev Prague, is reportedly interested in resuscitating the dormant club.

And teams outside the media spotlight of Moscow and St. Petersburg, are facing local cuts. According to the Sports Business Global Journal on March 31, local authorities are cutting funding for Avangard Omsk and Avtomobilist Yekaterinburg.

A spokesperson for Avtomobilist Yekaterinburg told the sports site that local authorities in the Sverdlovsk region were cutting funding for the squad next season from 450 million rubles ($7.8 million) to 350 million rubles ($6 million).

"[The club's main sponsor] Gazprom Neft will cover the main part of the budget, but not all of it," said Avangard President Vladimir Shalayev. "The players' payroll is to go down significantly, as we will have to spend more on travel, catering, and equipment."

With many of its teams either folding or struggling to survive, the KHL's dream of one day competing with the NHL will remain just that.