Transfer agreement a much bigger issue than potential new league in Europe

The Canadian Press
By: The Canadian Press
Dec 18, 2007

Capitals\' Alexander Ovechkin (8), of Russia, pumps his fist after scoring. THE ASSOCIATED PRESS/Haraz N. Ghanbari Author: The Hockey News


Transfer agreement a much bigger issue than potential new league in Europe

The Canadian Press
By: The Canadian Press
Dec 18, 2007

The potential for a new super league with deep pockets in Russia has supplied much water cooler material for hockey fans in Canada over the past week while the actual pressing matter facing the NHL has not.

The most critical issue involving Europe and the NHL is not another league, but rather the future of the player transfer agreement between the NHL and European hockey federations.

Falling under the radar in Canada last week was the news that the NHL and the European federations mutually agreed to re-open the transfer agreement - the immensely important framework that regulates how the NHL is allowed to draft and sign European players.

The NHL informed the International Ice Hockey Federation last Tuesday that it wanted to re-open the agreement. Two days later, the Czech Republic, Finland, Germany, Slovakia, Sweden and Switzerland decided to similarly exercise their right to revisit the deal. Russia, of course, was never in it. More on that later.

The current IIHF-NHL deal was a four-year agreement that began last season, but gave both sides the option to re-open it before Jan. 1, 2008.

Since they have, a crucial meeting will be held on Jan. 16 in New York between the NHL, IIHF and the European federations. And if they can't agree to a new agreement?

"It wouldn't be a good situation for hockey," IIHF president Rene Fasel was quoted on his federation's website. "The transfers to and from the NHL would not be regulated. This means that the NHL could offer contracts to European players basically all year and try to lure them in January or February which with the agreement is not possible. The European club would not be compensated.

"It could potentially create a transfer chaos where nobody would be a winner, with the exception of maybe agents and lawyers."

There is hope. Both the NHL and IIHF essentially agree on the main problem with the current agreement, that too many young European players are signed and come over to the NHL before they are ready. Of the 59 European players that signed NHL contracts for 2007-08, the IIHF says only six currently play in the NHL. Seven were returned to Europe and 46 are in North American minor leagues.

"This is detrimental to player development and to the European leagues," said Fasel.

The NHL agrees, especially since the current agreement sees the league pay US$200,000 for each European transfer - whether they make the NHL or not.

"The key will be to see if a dynamic can be created that will disincentivize our clubs from signing European players and bringing them to North America before they are ready to play in the NHL," Bill Daly, the NHL's deputy commissioner, told The Canadian Press. "Obviously we have to focus on that with the Players' Association. We've always had an interest in maintaining the European leagues as strong sources of NHL talent and feeder leagues.

"To the extent we are disrupting their ability to continue to supply quality talent to the NHL is not in the best interest of the NHL. I fully share that view with the IIHF and I believe the NHLPA does as well."

The agreement has had the same basic framework for 12 years. It needs a facelift.

"Quite frankly, the current structure of this agreement is too expensive for us," said Daly. "We have to take a hard look at how this is working and how we can modify it so that we are no longer signing as many players who aren't yet ready for play in the NHL - and we aren't obligated to pay as much money as a result."

But then there's Russia. The other six major European hockey countries may end up agreeing to a new deal with the NHL, but that doesn't mean the Russians will. In fact, the Russians in all likelihood won't be at the New York meeting.

"We haven't had any communication with them and as far as I can tell they're not interested in participating in our sitdown with the IIHF in January," said Daly.

And so, the problems with Russia continue. That brings us back to the proposed super league, an idea spawned and backed by Russian tycoon Alex Medvedev, the deputy chief executive of Russian natural gas producer Gazprom. He's got loads of money and envisions a great new league that perhaps one day will incorporate Western European teams and challenge the NHL for its top players.

He's enlisted good friend and former star player Igor Larionov to help lay the foundation.

But there are many skeptics. The most glaring issue is that the average Russian hockey fan can't afford expensive tickets, certainly not anything close to what NHL fans pay. So where will the revenue come in to pay the star players? Yes, Medvedev is rich, but running a league with a severe deficit will get old in a hurry.

Even Russian-born NHL agent Mark Gandler knows what league would still lure the best players.

"The NHL, no question about it," Gandler said Tuesday. "There are some circumstances, it depends on the individual. But if you have to make a collective judgment, guys like (Alex) Ovechkin, (Alexander) Semin, (Ilya) Kovalchuk, (Evgeni) Malkin - they've already demonstrated the fact that they prefer the NHL."

The current Russian league already pays good salaries. It's believed forward Alexei Morozov earns around $4 million a season. But you have to want to play in Russia instead of the comforts of North America.

And that's a problem no new league can solve.

"In terms of money, I can tell you that the offers are in abundance from Russia not only to sign free agents but also to sign players under contract in the NHL," said Gandler. "And some of these offers blow away the NHL today. But they're still not going. Because it's not just the money. It's also the organization, it's also playing in front of an NHL audience, it's playing in the best league and competing against the best players."

Hence, the NHL's lack of anxiety on the prospect of Medvedev's dream league.

"It's not something I know a whole lot about but to the extent it's something they want to undertake, we wish them luck," said Daly. "Regardless of whether it happens or doesn't happen, I don't believe it will impact what we're doing in Europe and our ability to take advantage of international business opportunities now or in the future."

That's where Gandler takes the NHL to task. He believes the league should already have expanded to Europe.

"I do believe the NHL is too slow with respect to getting into Europe," said Gandler. "In my opinion, there's an abundance of players in Europe. Look at all the Canadians playing in Europe. This is a small world."

For now, the NHL is dipping its toe overseas. It opened this season with its first-ever regular-season games in Europe, Anaheim and Los Angles playing a pair in London, England.

Four NHL teams are expected to open next season in Stockholm and Prague. But full-fledged expansion to Europe?

"Look, it's not going to happen in the next couple of years," said Daly. "But we're going to continue to increase our international activities and try to fortify the connectivity between the NHL fans and the NHL and make it more real to them and more relevant to them.

"Ultimately that can lead to greater and greater initiatives with the NHL in Europe."

One person with knowledge of Medvedev's plans for a new league, who requested anonymity, says the actual goal has nothing to do with creating a rival league to the NHL.

"This new league is more about Russian club owners getting away from firm grasp of the Russian Federation," he said. "The Federation controls everything right now and the club owners are tired of it. If somehow the new league actually rivals the NHL, that's a fringe benefit but not the goal.

"They want to make sure that the clubs have a lot more say about what's going on in the league since the clubs pay all the money. They want to make sure that the sponsors have a say. They want to make sure that everything is logical, that the hockey people are running the business, not somebody else."

Whether the NHL is the target or not of the proposed league, the fact remains that Russian hockey and the NHL have a fractured relationship that needs heeling for the good of the sport.

"The bottom line is, the lack of a transfer agreement with Russia has been an inconvenience to our clubs and certainly I don't feel has been in the best interest of the development of hockey overseas," said Daly. "But the best Russian players continue to come to the National Hockey League because they want to play in the best professional hockey league in the world.

"And I expect that that will continue to be the case regardless of whether we have a transfer agreement with Russia or any other European nation."

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Transfer agreement a much bigger issue than potential new league in Europe