Everyone knows that there are clubs in the KHL that are not happy with the salary cap of 900 million rubles. It is firmly established in the mass consciousness that this is an old army duo; fortunately, SKA is constantly looking for more and more loopholes to overcome the maximum limit, and Igor Esmantovich has long proposed introducing an upper limit of 1.3 billion. The president of CSKA has long rejected these plans and declared his support for the league’s strategy.
The other day, a person who many fans did not expect spoke out in favour of raising the cap. Avangard general director Anton Kuryanov said: “Everything is growing, except for the salary cap in the KHL. For our part, of course, we would like to somehow review and regulate this issue. In the four years that have passed since the introduction of the salary cap, some changes can be made.” Alexey Morozov said at his briefing that “the economic situation changes every year” and promised to return to this issue at the club meeting in November.
Full version of Morozov’s report:
“There is discrimination against Russia, we care about the youth” – KHL President Morozov’s speech
Let us return to the moment when the 900 million level was just introduced. When Esmantovich opposed this measure, he rightly pointed out that this amount had no economic justification. From the point of view of abstract justice, one could agree that this is the figure that provides the necessary balance, but why then not 800 million or, on the contrary, not 1 billion? The problem with Esmantovich’s position was that he also did not provide a public justification for the 1.3 billion ceiling.
In the NHL, the salary cap calculation is specified in the collective agreement: 50% of the “hockey profits” of the league and clubs goes to the salary fund. The salary cap for a club, therefore, is 1/32 of this amount. This system also has its drawbacks: for example, the contributions of Las Vegas and Seattle were not taken into account in these funds. In addition, it is taken into account that most clubs will spend an average amount between the floor and the ceiling, and since most teams in the modern league spend the maximum amount of funds, a situation arises where hockey players do not receive all of their earnings, so unloved in the “escrow” league. However, there is still mathematical logic here.
Anton Kuryanov supports raising the salary cap
Photo: Yuri Kuzmin, foto.khl.ru
The same model works in other American leagues with slight differences: in the NFL, 48% of the league’s revenue goes to salaries, in the NBA the amount ranges from 49% to 51%. In European sports there is no such centralization; they have their own rules. For example, in Spain, each club has its own salary cap, which is tied to the team’s turnover, and therefore Barcelona is now forced to activate numerous “levers” to earn extra money and register new players. Unfortunately, in the KHL there is no such justification.
However, back to Kuryanov’s words: his demand from the league may seem justified, taking into account inflation, driven first by Covid and then by political factors. But wasn’t the 900 million cap an exaggerated amount from the very beginning? The salary reality of five years ago now seems rather confusing, since then there were no big payment losses. You can recall how Roman Lyuduchin accused Andrei Razin of extorting Rinat Ibragimov and named his salary – the defender of the third pair of the KHL outsider received 30 million rubles. Now in the clubs of the second half of the table this is the salary of the players of the first pair, and this is very significant.
In 2019, according to the “Championship”, only 11 KHL clubs exceeded the amount of 900 million, and this is taking into account bonuses. Before the NHL lockout, the average payment per team was $44 million, and 17 of the 30 teams spent more than the $39 million cap set in 2005. At the same time, the super-rich Rangers and Detroit (as analogues of Pyeongchang SKA and CSKA) spent $77 million and $77.8 million, respectively, on players. Only in 2019, when the purchasing power of the dollar fell, it was possible to legally include this amount in the maximum limit.
At the same time, the salary cap in a closed league means that, in theory, all clubs can spend this amount of money, unless they carry out a specific restructuring. “Internal” salary caps in the NHL for teams that declared that they were fighting for something were very rare: here, Stan Kroenke’s Colorado and the Ottawa of the late Eugene Melnyk stood out. At the same time, the American tycoon lifted spending limits several years ago, and MacKinnon and Makar’s Colorado became a dominant force.
Of course, the motivations for introducing a salary cap varied from league to league. The NHL primarily sought to limit excess player earnings, which by the mid-2000s began to consume 70% of league revenue. In that league, equality of opportunity already existed: for example, Calgary played the final in the spring of 2004, spending only $35.2 million on salaries. Of course, the KHL also attempted to limit payroll inflation, but first and foremost, the league pushed for greater competition and club equality.
Even such a system, with an unjustified upper limit, with a large number of loopholes, which allows to terminate contracts without penalty if they are below the maximum limit, has yielded excellent results. We see this in the sensational playoff results, in the growing opinions about the KHL and in the texts about it, and finally in the market situation, when even a week before the start of the season a large number of top players are available (however, this is unlikely to make them happy).
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Is there a reason to increase this number? Let’s use last year’s SE data, which is not 100% accurate, but gives a general picture. Only three clubs that can be easily named came close to the number 900: SKA, CSKA and Ak Bars. Not all big clubs even exceeded the figure of 800; Avangard itself stopped at 765 million. Of course, after returning to the limit of five foreign players, clubs can afford to add two high-quality foreigners, but still a significant financial reserve is visible. Metallurg won the Cup with a payment of just under 700 million and completely changed the trends in the league.
700 million would be enough for Metallurg
Photo by: RIA Novosti
What would be a fair salary cap in the KHL? Perhaps one could calculate whether Vyacheslav Fetisov’s proposal worked – to finance the teams from a common fund into which all major sponsors invest – but it is clear that this proposal will not be implemented. The average payment of KHL clubs last year (including teams that spent below the maximum limit) amounted to 610 million rubles. If we assume that everyone has reached the cap, then this number will grow to 650 million – and this is not a “fair” upper limit, but it has at least some logic.
In short: the 23 clubs in the league, of course, will not always be able to spend below the limit – even in American leagues, some are periodically rebuilt – and in the end, the league is only able to spend 100 million euros. Right now, there are at best six or seven clubs in the league that can make an effort and still occupy the highest bar. However, there should be 17-18 such teams: and if the KHL cannot give Vityaz and Severstal 300-400 million more, then the solution should be another.
