May 01, 2006

Malkin transfer could be costly: "We're not asking for ($900,000) compensation from Penguins. Such a sum is a handout and we're not interested in handouts," Metallurg Magnitogorsk general director Gennady Velichkin told Russian media. "Put simply, they must buy his contract from us."

posted by wingnut4life to hockey at 01:22 PM - 11 comments

Velichkin made a comparison to soccer star Andriy Shevchenko's move from Dynamo Kiev to AC Milan for $25 million. Now, I don't know if this is a correct measure, but if you compare revenues of "Serie A" and the NHL, the NHL generates approximately twice as much money. So is $25m on the low-end?

posted by garfield at 01:38 PM on May 01, 2006

I'm pretty sure this is a lot of very warm air. Malkin will fly over to Pittsburgh in September, the Magnitogorsk administration will squawk about his contract, they'll end up suing the NHL/Penguins, and settle for a fairly insignificant sum. Something similar happened to AO, even though his contract had an opt-out clause:

Dynamo Moscow (and all RSL teams) lost a major battle when the brilliant Ovechkin left for Washington. Last summer, shortly before the end of the NHL lockout, Ovechkin signed a contract to play for Avangard; a deal that included an NHL out-clause. Dynamo then claimed the deal was only an offer sheet and they were matching the offer. [...] Nevertheless, a Russian arbitrator ruled Ovechkin had a valid contract to play for Dynamo this season. The player left Moscow, anyway, and reported to the Capitals. Dynamo then filed suit in a U.S. district court, attempting to block Ovechkin from playing the NHL and compelling him to return to Moscow. However, U.S. District Judge Emmet Sullivan tossed out the suit.

posted by DrJohnEvans at 01:55 PM on May 01, 2006

Malkin is widely regarded as the best player not currently playing in the NHL. This is a really dubious distinction. They used to say this about Jiri Dopita.

posted by HATER 187 at 02:01 PM on May 01, 2006

garfield -- curious as to where you get the revenue figures for Serie A and the NHL. In terms of trying to keep this even remotely close to an apples-to-apples comparison, it should be noted that Shevchenko is a much more valuable player than Malkin could ever be. So from a pure win-loss perspective, Shevchenko is likely worth more. On a football/soccer team of 11 players, one single player can make a much bigger impact than any single (non-goalie) hockey player ever could. Shevchenko also plays a premium position within those 11 players. The potential impact of a player like Schevchenko on a team's bottom line also likely would be greater than would be the case for Malkin. First of all, I don't think a great hockey defenseman will help sell extra tickets as much as a premium striker in football (or even as much as a premium offense player in hockey, for that matter). Second, team improvement as a result of a superstar-caliber player in Italian football also may have greater benefits than the same in North American hockey in terms of revenue -- as improved team performance in a major European football league could result in revenues from increased appearances in European cups, further advancement in domestic tournaments, etc. So I guess what I'm trying to say is that the Russian GM's comments are pretty much crap as far as I'm concerned. Note that most of the above is largely conjecture on my part, but intuitively it makes sense (at least to me). Detailed revenue numbers (of a type that probably aren't available anywhere) would help support it or put the lie to it.

posted by holden at 02:31 PM on May 01, 2006

Googled it. Serie A was second in revenues behind the EPL, which was generating 1.3 billion pounds. That approximation of mine of half is a bit off. The figures were from 03-04, but I imagine things haven't changed that much. It wasn't the most official looking source, though, so I'm not all that confident in the numbers. But it was good enough for a jumping off point. NHL revenues have been widely discussed as being in the area of $2.1 bn before the owner lock-out, and supposedly revenues have returned to previous levels. Great points, btw, about successes in various competitions translating into extra cash. I didn't think about that. The NHL has similar benefits for the team/club with playoff revenue being strictly gravy, with not even the players being paid for their play. The player to team ratio is also definitely something to consider when valuing a player's value across sports.

posted by garfield at 02:44 PM on May 01, 2006

This is precisely why the draft position of a lot of Russian players is dropping fast. I mean, there wasn't a single Russian drafted last year until 70th spot. NHL teams realize the risk. And with increasing talent coming up from other markets, Russian players are just going to get passed over more and more in favour of safer choices.

posted by mkn at 02:53 PM on May 01, 2006

I imagine this is nothing more than hot air. I can't see any scenario other than Malkin on Crosby's wing as of next year. And he's a tad bit better than Jiri Dopita. Anyone watch the World Juniors? He was a man amongst boys. He also played well in the Olympics. He's bonafide.

posted by WeedyMcSmokey at 03:01 PM on May 01, 2006

I actually think the NHL will have to adapt, at least a bit, to European-style transfer fees. Maybe the NBA too, though as with Yao Ming they're already doing it to a degree. Clearly the teams will (have?) learn from the Ovechkin situation and change their contract language and I expect European clubs outside Russia will try and earn similar fees for their discovery and development work. Maybe some will become feeder clubs as seen in soccer though the draft might block it.

posted by billsaysthis at 03:09 PM on May 01, 2006

I imagine this is nothing more than hot air. I can't see any scenario other than Malkin on Crosby's wing as of next year. In my comment above, I was going in with the assumption (don't know where I picked it up) that Malkin was a defenseman. It changes the analysis some (and makes some of my statements wholly nonsensical), but I think the overall point stands. Good point, garfield, about the NHL playoff revenues, which I had considered briefly but didn't note and which obviously has a place in the analysis.

posted by holden at 03:30 PM on May 01, 2006

bill, I also think the NHL will have to adapt. But, given that pretty much every country in the galaxy signed the player transfer agreement which accompanied the new CBA, except Russia, it might be Russia that is forced to adapt this time...though I could see a hefty sum paid for Malkin. He should be that good.

posted by garfield at 03:55 PM on May 01, 2006

I think the player should pay. If he signed a contract without an out clause and he wishes to no longer honour that contract, he should pay for the privilege.

posted by mikelbyl at 10:47 PM on May 01, 2006

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