The KHL’s Board of Governors was busy this weekend, discussing and ultimately deciding on a number of major issues. The league approved the use of “smart puck” tracking technology, distributed television revenue to each team, and formally open up investigations into both a new playoff format as well as rules pertaining to player loans. However, the biggest decision came in regard to a touchy subject in the KHL: competitive balance. The league has officially announced that they will introduce a salary cap floor, beginning in the 2020-21 season.
A group consisting of representatives from all 21 NHL teams received a majority vote to implement a salary cap floor, which should act to combat the KHL’s problem with powerhouse clubs. The league already has a salary cap structure with an upper limit of 900MM rubles, or about $14MM, but few teams have the funds to build their rosters right up against the cap. Without any floor to speak of, the cap only marginally assisted with competitive balance, as many teams who felt overwhelmed by the talent of teams like CSKA Moscow, SKA St. Petersburg, and Ak Bars Kazan would instead field low-money rosters in an attempt to maximize their profits in what they felt would be an inevitable losing season.
From now on, that will no longer be an option. The top teams will continue to spend to the cap, but the rest of the league will now have to build more competitive rosters. In it’s first season, the salary cap floor will be set at 30% of the cap ceiling, or 270MM rubles. This is only about $4MM, but is just the first step toward a more balanced KHL. Over the following three years, the floor will move to 35%, 45%, and finally 50% in 2023-24 and beyond. Team that fail to reach the salary cap floor will be punished with financial penalties the first two times they fall below the minimum team salary and upon the third instance will receive a postseason ban.
As it relates to the NHL, a salary cap floor in the KHL will mean there is more money to go around in the competitor league. The financial status of the KHL still pales in comparison to the NHL, but a required minimum payroll for 21 KHL teams (and counting) is sure to produce more scenarios where a jump to Europe is more appealing than a two-way contract. It could also encourage homegrown Russian players to stay in the KHL longer, as the pay discrepancy may not be as large. At the end of the day, the KHL salary floor won’t have a substantial immediate impact on the NHL’s flow of talent beyond a few specific situations, but if it succeeds in improving the competitive balance in the KHL, the league’s popularity could increase which would be felt across the hockey world.