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European teams form alliance to get a seat at the table with the big boys

The European Hockey Club Alliance officially came into being this week after a meeting in Berlin and its main objective is to have more say in the transfer fees that come their teams' way when the NHL signs a player.
The Hockey News

The Hockey News

When Patrik Laine and Jesse Puljujarvi are drafted into the NHL a week from now, their teams in the Finnish Elite League will receive a one-time payment of about $240,000. Assuming each player earns $50 million over the course of his NHL career – which is probably being conservative – the amount their teams receive represents about one-half of one percent of their career earnings.

The teams that choose Laine and Puljujarvi – almost certainly the Winnipeg Jets and Columbus Blue Jackets – stand to make millions in merchandising and ticket sales, particularly if each of them is a central figure in some long playoff runs. Meanwhile, the organizations that have basically developed these players from the time they were children, Tappara and Karpat, are receiving a pittance. That $240,000 is what Karpat will receive for losing Laine's and Puljujarvi's World Junior linemate Sebastian Aho to the Carolina Hurricanes earlier this week.

It’s important to note that the development model is much different in Europe than it is in North America. It is not uncommon for a player to stay with one organization from the time he learns to skate until the time he leaves for the NHL. By the time that player is ready to play in the best league in the world, the club to which he belongs has literally spent years developing him. And they’re getting a little tired of not being compensated very well for that.

Well, the newly formed European Hockey Club Alliance is setting out to change all that. The alliance officially came into existence after a meeting earlier this week in Berlin, where 72 teams from European leagues came on board. Its main objective is to begin the process of taking the transfer payments for players into its own hands, rather than leaving it to the International Ice Hockey Federations and the hockey federations in their countries. What the alliance wants is for each team to be in control of negotiations with NHL teams, much the way things are done in soccer and European handball, two sports that already have alliances whose mandate is to look after the interests of the clubs.

“The biggest challenge the clubs are facing is the economy,” EHC president Marc Luthi said in a news release. “If all clubs were making money or at least breaking even, we wouldn’t be having this meeting. By challenging others, but also ourselves, we want the EHC to contribute to making club hockey in Europe a sustainable business.”

It comes as no shock that the EHC Alliance came into being. Teams and leagues around Europe have been disgruntled for years about the comparatively meager crumbs they receive in return for investing so many resources into the development of players. What is rather surprising, however, is that it appears the alliance has the blessing of the IIHF. In fact, at its founding meeting, the alliance invited IIHF president Rene Fasel to speak. “Bring your concerns and challenges,” Fasel told the alliance. “Let’s work together on solving them and let’s make our game better.”

You might think it odd that the president of the body that oversees the transfer payments to European teams would be on board with an alliance that is seeking to usurp it. But the fact is that Fasel has little choice but to welcome the alliance. That’s because if the alliance were not to get cooperation from the IIHF, it would have an enormous amount of leverage over the international body. It could conceivably keep its players from participating in the World Championship, which represents the IIHF’s biggest cash cow. The alliance would also like to see their teams get a cut of the profits from big international events such as the World Championship.

The next step for the alliance is to gain representation in the IIHF by gaining membership to the general congress, executive council and various committees. That will be decided in September in Paris at the IIHF’s next meeting.

The alliance has no illusions that teams will get soccer-type money, which can run into the hundreds of millions of dollars for elite players. But it might be able to get more of a basketball model, which will see European teams receive a transfer payment of at least $650,000 per player it loses, depending upon whether the player is willing to give up some of his salary to his former team, if he’s still under contract.

There are still a number of details to be worked out, but it looks as though it’s only a matter of time before NHL teams will have to start dealing with European teams directly – and paying them – if they want to sign their players.



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