Europe group seeks larger NHL transfer fees

[sureLoss]

Led by former Flame Hakan Loob

http://www.thehockeynews.com/blog/eu...fer-agreement/

The three top prospects for this year’s NHL draft all played in Europe this season and they’re all projected to become enormous stars in North American and make millions of dollars over the course of their careers. And if things go as planned, they’ll be a cash cow for their NHL employers, as well.

But what about the teams they’re leaving? In the case of Patrik Laine and Jesse Puljujarvi, the Tappara and Karpat teams in the Finnish League will not only be losing their best players, they’ll also be parting with two young men in whom they’ve invested an huge amount of resources. And once they sign deals with the NHL teams that select them, they’re receive a one-time payment of about $240,000. That’s it. Nothing more. Do not pass Go. Do not collect any more money. And in the case of the Zurich Lions in the Swiss League, they won’t receive a cent.

Well, a meeting of the rather unwieldily named Alliance of European Hockey Clubs (EHC), set for Wednesday in Vienna, wants to see if something can be done about that. With close to 50 European teams already committed to membership, the organization is led by former NHLer Hakan Loob. It’s an organization that thinks the International Ice Hockey Federation and the national federations that represent them have done a poor job of looking out for their interests and they want change.

The meeting Wednesday in Vienna is another baby step in that process. At the meeting, the 10 members of the interim board will meet to discuss the mission of the alliance and confirm the priorities of the group, which will be presented to the full membership at the first annual meeting, which is slated for June 13 in Berlin.

Much of this, of course, centers on money. According to the transfer agreement between the NHL and the European federations, teams receive about $240,000 per player they lose, regardless of whether he’s a future NHL superstar or a fourth-line grinder. The Russian federation, which has opted out of the agreement along with Switzerland, gets nothing when it loses a player. What the alliance wants to do is to come up with a model that replicates soccer, where negotiations for players are done directly between the two teams involved. The way it stands now, if the Toronto Maple Leafs want to sign Russian free agent defenseman Nikita Zaitsev, CSKA Moscow gets nothing.

[Finger Cookin]

The NHL would be wise to not go along with a FIFA transfer window style process, as it would instantly lead to haves/have nots division which the salary cap has rendered nearly obsolete. And I think the EHC would be wise to use their movement for influence on the IIHF to improve the existing system.

[Weitz]

Why do they owe them any money anyway? Do these teams own the players?

If they don't have contracts can they not leave?

[sureLoss]

Originally Posted by Weitz

Why do they owe them any money anyway? Do these teams own the players?

If they don't have contracts can they not leave?

In the case of Laine and Puljujarvi, they are under contract for next year in Finland.

[Weitz]

So if you want to go to the NHL why wouldn't you sign a contract that ends the year you will be drafted?

[sureLoss]

Originally Posted by Weitz

So if you want to go to the NHL why wouldn't you sign a contract that ends the year you will be drafted?

If there wasn't a transfer agreement with the NHL, I suspect most of them would.

Keep in mind these contracts were signed 2 years ago back in 2014. Lots of uncertainty between then and this year's draft. Agents probably advised them to sign the best deal on the table.

[Calgary4LIfe]

Seems like a money grab - but is it warranted? I don't know enough about the drafting and development cycle over in Europe. Curious to know exactly where the dollars are being spent. Do they own junior teams?

Based on how many North American players and coaches are in Europe, perhaps the NHL can just counter with their own transfer system. Any tenured professional player, coach or GM is subject to a transfer agreement in heading over to Europe. Perhaps set it at 1 season and over.

I think it isn't a bad idea for the European teams to grab some cash in order to grow the game internationally, and hopefully this will lead to even more talent world-wide. At face-value right now, it does look a bit like a money-grab to me. I can't see them spending more than $240K on the scouting/development of a prospect. Difficult to comment without breaking down the costs (which I imagine would vary enormously from team-to-team, not to mention league-to-league).

[Imported_Aussie]

What about transfer fees with conditional payments? This happens a lot in football (soccer) where a young player is transferred for a fee which can rise based on conditions being met, such as games played, goals scored, international caps, etc.

What about the flat fee on transfer, and then depending on how the player pans out, then additional fees are owed at reaching certain point/goal/games played thresholds, and/or for winning awards/all-star/playoff wins?

That way, if the player they developed flopped, no extra cost to NHL team, but if the player they developed did well, they recoup extra fees?

It could also be set to a certain window, such as the players' RFA years

[CroFlames]

NHL clubs get compensation if you acquire a fired coach or executive from another team. How ridiculous is that?

A club receiving compensation for an NHL club poaching their best young players should receive compensation as well.

[Samuelsson]

Don't think European teams would have much of a chance claiming (extra) money for UFA's, but as for the young players getting drafted, I think you have to look at this without your NHL/North American glasses on. Simply think if it was the other way round and you didn't follow the best league in the world with the best talent.

Would be pretty annoying if you were a coach/GM/owner/fan and every decent player you've put stock into/get on the back of your jersey just gets picked off for minimal price.

Originally Posted by Imported_Aussie

What about transfer fees with conditional payments? This happens a lot in football (soccer) where a young player is transferred for a fee which can rise based on conditions being met, such as games played, goals scored, international caps, etc.

What about the flat fee on transfer, and then depending on how the player pans out, then additional fees are owed at reaching certain point/goal/games played thresholds, and/or for winning awards/all-star/playoff wins?

That way, if the player they developed flopped, no extra cost to NHL team, but if the player they developed did well, they recoup extra fees?

It could also be set to a certain window, such as the players' RFA years

This is actually a really good idea.

[UKflames]

Whilst some will look at this as a cash grab, you have to remember that Hockey in Europe is a very different beast to the NHL, especially where finances are concerned.
The vast majority of clubs do not have millionaire/billionaire owners bankrolling the team like the NHL clubs. They survive on sponsorship, gate receipts and merchandise, all of which are very heavily influenced by the product on the ice, if you have a superstar player that you have developed and the fans have grown up with then all three of these things take a big upswing, which can mean the difference between and club surviving or going down the toilet.
To suddenly lose that ticket to draw the fans and sponsors in can be expensive and you need to replace that income until you can find another draw. Whilst many like to think of the European leagues as nothing more than a feeder system for new players and a retirement fund for old players, it does need cash to survive and cannot do that by just giving away its top players.

[PeteMoss]

Originally Posted by UKflames

Whilst some will look at this as a cash grab, you have to remember that Hockey in Europe is a very different beast to the NHL, especially where finances are concerned.
The vast majority of clubs do not have millionaire/billionaire owners bankrolling the team like the NHL clubs. They survive on sponsorship, gate receipts and merchandise, all of which are very heavily influenced by the product on the ice, if you have a superstar player that you have developed and the fans have grown up with then all three of these things take a big upswing, which can mean the difference between and club surviving or going down the toilet.
To suddenly lose that ticket to draw the fans and sponsors in can be expensive and you need to replace that income until you can find another draw. Whilst many like to think of the European leagues as nothing more than a feeder system for new players and a retirement fund for old players, it does need cash to survive and cannot do that by just giving away its top players.

That's fine, but I suspect the junior leagues would be lining up for a similar boost in payments if the European leagues get one.

[Itse]

Originally Posted by Calgary4LIfe

I don't know enough about the drafting and development cycle over in Europe. Curious to know exactly where the dollars are being spent. Do they own junior teams?

Not always, but typically yes. Regardless of the level of their mens team, a club will have teams for all or most age groups, plus they will run most of the hockey schools and camps and things like that in their own area. (Larger cities will obviously have several clubs.) There are independent local teams, but those teams tend to be more casual in style. The pro clubs also (I think) spend money on those junior teams. As a rule of thumb the more succesful pro clubs have the largest junior hockey organizations and produce the majority of players that end up in the NHL.

Clubs can even have several teams for the larger age groups, and girls and womens teams are also often parts of those same organizations.

As a result, many European players have played for very few clubs in their whole lives. Patrik Laine for example has played for his current club Tappara since he was something like 10. Puljujärvi (somewhat famously) moved from the smaller city of Tornio to Oulu to get into the Kärpät organization when he was 13.

In Europe it's possible to only play for one organization from the day you learn to skate to the day you retire.

(Europeans don't do drafts anywhere I think. My understanding is that it would actually be illegal in the EU.)

(Note that I don't have a kid in junior hockey, so I might be somewhat mistaken. Plus I suspect Eastern Europe might be a bit different. I'm sure all mens clubs there have at least some junior teams.)

[Fuzz]

Basically the player is getting an "education" in Europe, and they come to the NHL for a career. So shouldn't the player pay for their "education?" Maybe the Europe teams should have a contract with the player, in that if they go to the NHL, they pay back to their team. I'm not sure why the NHL would owe them anything...

[Addick]

Originally Posted by Weitz

Why do they owe them any money anyway?

Originally Posted by Calgary4LIfe

At face-value right now, it does look a bit like a money-grab to me. I can't see them spending more than $240K on the scouting/development of a prospect. Difficult to comment without breaking down the costs (which I imagine would vary enormously from team-to-team, not to mention league-to-league).

Player development is a risky business but one from which the top clubs benefit in the end. If this initiative moves the system toward a meritocracy, it will reward clubs that produce better players. Produce better players, get paid better transfer fees. This entices more clubs to invest in their youth development programs.

[Itse]

Originally Posted by Fuzz

Basically the player is getting an "education" in Europe, and they come to the NHL for a career. So shouldn't the player pay for their "education?" Maybe the Europe teams should have a contract with the player, in that if they go to the NHL, they pay back to their team. I'm not sure why the NHL would owe them anything...

The NHL clearly benefits from having a good relationship with the Euro teams, and those Euro clubs being financially healthy and able to develop good players. The Euro clubs also often help develop players even after they're drafted and are just generally very flexible with things like letting players go to camps even if the home clubs have their own camps etc.

That development and those good relationships are worth some money, which is why the NHL is already paying the Euros some money. Really the discussion is just how much money is that worth. Personally I don't think why we as fans would care about details like that.

I guess the only thing I have to say is that the current transfer fees sound like pocket change to me for the NHL clubs, so probably yeah they could pay some more.

[CroFlames]

Originally Posted by Itse

The NHL clearly benefits from having a good relationship with the Euro teams, and those Euro clubs being financially healthy and able to develop good players. The Euro clubs also often help develop players even after they're drafted and are just generally very flexible with things like letting players go to camps even if the home clubs have their own camps etc.

That development and those good relationships are worth some money, which is why the NHL is already paying the Euros some money. Really the discussion is just how much money is that worth. Personally I don't think why we as fans would care about details like that.

I guess the only thing I have to say is that the current transfer fees sound like pocket change to me for the NHL clubs, so probably yeah they could pay some more.

To me it seems like in order to keep the good relationships going, the NHL absolutely needs to pony up more dough for poaching players.

Otherwise, those same Euro clubs will cease to develop players to NHL caliber.

[Calgary4LIfe]

Would be interesting to know how many transfer fees on average happen yearly (though I suppose it the numbers year-to-year can greatly differ).

I am working off the assumption that $240k is a big chunk of change already. I wonder how much more they would get during negotiations. I guess if a budding (or established) superstar is looking to come to the NHL, some teams won't blink an eye with even something north of a million.

If that is the case, it would start to erode parity, unless transfer agreement dollars get worked-into the CBA? Teams like Phoenix, Nashville, Ottawa, Carolina, etc., - teams that have internal budgets - would probably abstain from chasing high-profile European FA players, or even drafting them altogether.

Edit: I do support the fact that these clubs need cash to promote the game and develop more players, however. Just would be interesting to know how much more money it would cost NHL teams, and what the consequences would be.

[Iceman90]

To me, it would make sense that the European team gets a certain percentage of the player's NHL contract value. That way they get compensated based on the player's value to the NHL club.

[Calgary4LIfe]

Originally Posted by Iceman90

To me, it would make sense that the European team gets a certain percentage of the player's NHL contract value. That way they get compensated based on the player's value to the NHL club.

It would address players exempt from their ELCs, but most are coming over with an ELC contract - the older ones who might be the best ones (like Panarin for instance) for only a 1 year ELC (I think he is on a one year). Only if you are 26 or 27 and up (around there anyways - sure Getback or Sureloss or someone else will correct me) are exempt from an ELC.