KHL Could Contract Due to Economic Issues in Russia

A recession in Russia and low prices of oil have hurt state-owned companies that fund most teams.

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Nov 14 2016, 8:15pm

The Kontinental Hockey League—better known as the KHL, or the league that stole Ilya Kovalchuk from us—is strongly considering the option of cutting a number of its teams from the league, as reported by several outlets.

The KHL, which is widely viewed as the best hockey league in the world outside of the NHL, is on the verge of making very serious structural changes. A heavy economic recession tied mainly to low oil prices in Russia, where the majority of the league is based, is proving to be too much for the state-owned companies and regional governments that operate and finance many of the country's professional hockey teams.

Because of this, the league—which features 29 teams across eight different countries spanning Russia, Eastern Europe and Asia—is looking at options to cut its immediate costs. Historically, when cutting costs becomes a priority for a whole league, contraction is usually soon to follow.

"The KHL board is preparing to discuss an optimization of the number of clubs taking part," league president Dmitry Chernyshenko said in comments Monday to state agency R-Sport.

"I think it's possible that the league could contract if the board takes that decision."

Reports of possible contraction emerge only a few months after the KHL announced it was expanding to China, an untapped hockey market being pursued heavily by the NHL. Despite the positivity and optimism surrounding the move initially, the KHL's venture into the Chinese market has been nothing short of a disappointment. Splitting time between Beijing and Shanghai, the league's newest club has struggled to attract fans, with attendances of below 1,000 at some games. They also weren't sure how to act during the team's first ceremonial puck drop, which is as hilarious as it is embarrassing for an 'emerging' hockey country's first experience in a professional league.

Canadian hockey fans, especially those in Winnipeg and Quebec City, are all too familiar with the scenario some Russian hockey fans are facing. In 1995, Quebec City lost the Nordiques to Colorado mainly because of harsh economic conditions negatively impacting the value of the Canadian dollar. Even more painful was the fact that the Avalanche went on to win the Stanley Cup just one year later in 1996. That same year, the Jets (who returned to Winnipeg to start the 2011 season) left for Phoenix and became the Coyotes after suffering the same loonie-related fate the Nordiques did. Canada's capital city team, the Ottawa Senators, nearly suffered the same fate during an economic recession in the early 2000s, but barely survived after filing for bankruptcy protection in 2003.

For an entity not even as close to financially stable as the NHL was when it went through its most trying economic issues, it remains to be seen whether the KHL will grow stronger as a result of contraction or if this represents the first minor step in a major overhaul of the struggling, yet entertaining league.