Inside The Penalty Box 07.15.08: NHL Facing Much Tougher Foe In Russia

Posted by Neil Borenstein on 07.15.2008

Russia just used to be a pain in the butt to the NHL. But with more money in the new Continental Hockey League, the country can now afford to financially compete for players with the NHL and is starting to lure talent over. In the latest edition of Inside The Penalty Box, Neil Borenstein discusses the current situation between the NHL and the CHL.

Not-So-Good Foreign RelationsNHL, CHL Still Working Out Differences

Photo Credit: daylife.comJaromir Jagr left for Russia after 17 seasons in the NHL.

The rocky relationship between the National Hockey League and Russia has taken a dynamic turn. Once just a mere pest to the NHL by blocking players from coming to North America and constantly complaining about poor compensation in return for its lost stars, Russian hockey has become a lot stronger thanks to heavy investments in the league founded by billionaire Alexander Medvedev.

Yet to be considered a threat to the NHL, according to Deputy Commissioner Bill Daly, there's little doubt that the new Continental Hockey League (CHL) is a much stronger foe than what the former Russian Super League used to be. More financial resources have allowed the CHL to offer players at all levels around the world very lucrative contracts competitive to that of what NHL teams can offer. And while the CHL has yet to lock down a ton of major names outside of Jaromir Jagr, it's not for a lack of trying.

Evgeni Malkin

Offered a reported $12.5 million tax-free by Russian teams

Prior to signing a five-year extension with the Pittsburgh Penguins, Evgeni Malkin was the target of several big offers from CHL teams worth a reported $12.5 million per season, tax-free. That's more money than he could receive at even the maximum allowed salary for any individual player under the current NHL cap of $56.7 million. Malkin chose to remain in Pittsburgh instead of going back home to mother Russia. But that had to have Gary Bettman and Daly just a tad bit worried considering not every single hockey star's greatest concern is the Stanley Cup, regardless of how much we want to believe that's everyone's top priority.

On July 10, the NHL and Medvedev met in Zurich, Switzerland, home of the International Ice Hockey Federation (IIHF), to attempt some sort of truce. With the NHL, NHLPA and Medvedev present, an agreement was reached that the leagues would honor contracts. Under such conditions, CHL teams would not have been allowed to offer anything to Malkin, who had one year remaining on his entry level deal.

While this was believed to be a tremendous step in the right direction as the two leagues work toward a truly complete transfer agreement, the hockey world was dealt a bombshell just one day later. The Nashville Predator's third leading scorer last season, 22-year old winger Alexander Radulov, was reportedly inked to a three-year deal worth no less than $3 million per season with the CHL's Salavat Ulaef. Radulov, who was drafted by the Predators 15th overall in 2004, still has one year remaining on his entry level contract worth $984,000. According to the NHL and CHL's new pact, this move was illegal.

According to Radulov's agent, Yuri Nikolaev, this deal was actually agreed upon two days prior to the meeting in Zurich. And because there wasn't any kind of transfer agreement or clause in place at the time, Radulov contends the move is fair. Now, I find it hard to believe that this deal was announced a day after the NHL and Medvedev met and agreed to honor contracts, yet was conveniently agreed to two days beforehand. The media is not that slow. And if I'm correct in my skepticism, the Predators should have a fairly decent shot at having this little deal between Radulov and Ulaef overturned, as the team does intend to contend it. However, if Nikolaev is somehow telling the truth, it's going to be difficult for Nashville to win the battle. After all, Malkin did jet for the United States just two years ago after defecting from Russia with one year left on a deal with Metallurg Magnitorgorsk, and the team failed in its attempts to bring him back.

Alexander Radulov

Reportedly signed a deal with Russian team, Ufa, despite one year remaining on his entry level deal with the Predators

Whether the Predators should want Radulov back is a side issue to this fiasco. While he did score 26 goals last season and could very well continue to blossom into the franchise's best scorer, he has made it very clear that he wants to play in Russia. He apparently contacted the Predators and informed them of his desire to desire to go home, where he was being offered a better deal than what he had with the Predators. After not hearing back from the team, Radulov jumped at his chance to play in Russia and is pretty determined to honor that new deal over the one he already had in the NHL. In his mind, the Predators can want him back. But he's just not going to be donning a Nashville sweater. The courts, or perhaps Medvedev if he chooses to do the honorable thing, will have the opportunity to decide otherwise.

But what this showed beyond the fact that not every player has the dream of a career in the NHL is that the CHL isn't just going to attract players past their prime or not worthy of top dollars in the NHL. Instead, a 22-year old with a rather bright future was lured away from the league. And while he may not be the caliber player Alexander Ovechkin, Sidney Crosby or Malkin are, Radulov is no slouch. And this needs to be a wake up call to the NHL. Because the CHL can compete financially with them now and money has a funny way of speaking louder than the prospect of winning the Stanley Cup – especially to young players that don't know any better.

The NHL does have an interesting opportunity here to throw this new economic fortune back in the CHL's face, though. For years, NHL teams have been forced to toss out millions of dollars to bring over some of the best young players from around the globe. Yet, it's never really been enough for other countries. And at the meeting in Zurich, European nations like the Czech Republic, Finland, Germany, Sweden, Slovakia and Switzerland want an extra $200,000 added to the compensation fee paid by the NHL for its out-of-contract players, according to The Canadian Press. That type of greed is what had the NHL going in a new direction following the expiration of the former transfer agreement in mid-June. My problem does not lie there, however, as those countries still don't have leagues on the level of the NHL and CHL financially.

Nikita Filatov

Has Medvedev seeking $500,000 per year for CSKA Moscow for his move to the U.S.

My issue rests with the current situation involving the Columbus Blue Jackets sixth overall draft pick in this year's NHL Draft, Nikita Filatov. The 18-year old inked an entry level deal with the Blue Jackets worth a reported $875,000 annually in base salary, according to The Columbus Dispatch. The paper also reports that Medvedev is seeking $500,000 per year for the life of Filatov's contract to be paid to his former Russian club, CSKA Moscow. Daly contends that the Blue Jackets owe CSKA Moscow nothing, considering the contract was signed after the conclusion of Filatov's 30-day notice, which is all that's required by Russian labor laws. Medvedev will probably put up a fight and can even call for a four-year suspension on Filatov that would prevent him from representing Russia in international play. But, much like Radulov is persistent in his stance that he's playing in Russia, Filatov is coming to the United States.

This situation raises a rather significant question, though. Why is it that Medvedev believes Russian clubs in the CHL, which is now an economically stable league, should still receive any compensation for lost players, yet the NHL doesn't receive compensation for its lost players? While I can understand the compensation system going one way with leagues that don't have the kind of coin that the NHL does, Russia has the funds to support competitive salaries now. Thus, they have enough money to afford paying compensation fees to NHL teams whose talent they acquire just as much as CHL teams have the right to receive compensation for their lost stars. If Medvedev wants CSKA Moscow to receive $500,000 a year for Filatov, I suppose then that Avangard Omsk should be paying the New York Rangers in the millions for Jagr. Maybe Ulaef won't want Radulov so badly if they're forced to pay the Predators around a million bucks per season for the life of his contract.

The NHL needs leverage like this. They need to resort to throwing something in Medvedev's face, because we all know he isn't going to back down from taking any kind of advantage of the NHL. If the NHL were to demand some sort of compensation be established whenever the CHL wants its players, Medvedev might not be so quick to make some of his ludicrous demands.

Right now, he is a much larger presence to the NHL than the league would like to admit. Still far away from being on the same level of intrigue as the NHL to fans, the CHL has the resources to compete for players of all ages and abilities with the NHL. It's the NHL's responsibility now to cut this thing off at the head before Medvedev and his crew becomes a much larger thorn in its side. Perhaps they can start in September when talks will begin in New York to try and create an international transfer agreement that will make all of these matters much more concrete and easier to handle.

Photo Credits: Evgeni Malkin – daylife.com; Alexander Radulov – thehockeynews.com; Nikita Filatov – eurohockey.net

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In Other NHL News …

• Vincent Lecavalier closing out career with Lightning: It was originally believed Tampa Bay Lightning captain Vincent Lecavalier would remain with the team until his retirement on a nine-year, $77 million deal. On July 13, the Lightning proved their commitment to that lifetime deal by upping the ante to an 11-year, $85 million extension that will start in 2009-10 and run through the 2019-20 season, when he'll be 40. The deal's annual cap hit to the Lightning will be about $7.73 million, but the contract pays Lecavalier a bit differently. According to TSN.ca, he will receive $10 million a season for the first six years of the contract, $8.5 million in 2016-17, $4 million in 2017-18, $1.5 million in 2018-19 and $1 million in 2019-20. This deal will pay Lecavalier a load of money up front. But if he decides to retire before its conclusion toward the very backend of the contract, the Lightning won't have as big a cap hit considering even retired players' salaries count so long as they're 35 or older. And overall, at an average of $7.73 million, the Lightning grabbed him at a steal of a deal for the rest of his NHL career. For all the questionable moves made by Tampa Bay this offseason, this one goes down as an outstanding one.
  
  
• Ted Nolan out as Islanders coach: Well, two years was enough. Based on "philosophical differences" between general manager Garth Snow and head coach Ted Nolan, the New York Islanders will be searching for a new man behind the bench. Nolan has one year remaining on his contract. Having been out of the head coaching game since 1997, Nolan returned with the Islanders for the 2006-07 season. He guided the team to the playoffs that year, but wasn't able to get it to do the same this past season. A likely candidate to take over in Long Island is John Tortorella, who was unceremoniously fired and replaced with Barry Melrose in Tampa Bay. And I can't help but believe that the fact that such a great head coach is still unemployed played some sort of role in Snow's decision. If Tortorella isn't next in line, former Toronto Maple Leafs and Carolina Hurricanes head coach Paul Maurice is another possible high profile option, according to The Canadian Press via TSN.ca.
  
  
• Ryan Hollweg traded to Toronto: Yeah, no, I'm not going to make a big deal out of this. I liked Ryan Hollweg for his effort. But the New York Rangers have better uses for his roster spot and received a fifth round pick in the process.
  

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~ Neil Borenstein