Monday, May 01, 2006

Malkin's NHL Transfer

Evgeni Malkin was the second pick in the 2004 NHL entry draft, selected by the Pittsburgh Penguins after Washington selected Alexander Ovechkin. In 2004/05, when both Ovechkin and Malkin were in the Russian Elite League, Malkin outscored Ovechkin 32 points to 27 (though Ovechkin missed time to injury and Malkin didn't). Since Ovechkin is the Calder trophy favorite, it is quite logical to assume Malkin could have a huge impact in the NHL.

There is no existing deal between the Russian Ice Hockey Federation and the NHL (IIHF deal) to govern the coexistance of these two leagues. These deals usually set the costs for transferring players between the two leagues, among other things. When these deals do not exist, legal wrangling can occur over the status of players. This occurred this season regarding Alexander Ovechkin and Alexander Semin. Evgeni Malkin could be next.

Historically, player transfer fees have been relatively small in hockey. Under the current deal that exists between other European nations and the NHL, the transfer rate is determined entirely by the draft position of the player in question. A player, such as Malkin, picked second overall would cost $300,000 to transfer to the NHL. One of the reasons the Russians have refused to sign a player transfer deal is because they feel these rates are unrealistically low. Vladislav Tretiak has been recently placed in charge of the Russian Ice Hockey Federation and is on record that he would like to sign an IIHF deal, but he likely pictures one with much higher transfer fees.

The posturing is already beginning regarding Malkin. Malkin's Russian team Metallurg Magnitogorsk is claiming that a much more reasonable transfer fee for Malkin would be similar to those in soccer. Andriy Sevchenko had a transfer fee of $25 million when he moved from Dynamo Moscow to AC Milan. I don't think that Malkin will fetch as much as $25 million, but I do think he will fetch far more than $300,000. I think he will fetch several million dollars. I think this may set the stage for far higher player transfer fees in the future for European players.

Of course, with no transfer deal in effect if Malkin wanted to jump to the NHL without the Russian league receiving any compensation, this probably could not be stopped either.

It will be an interesting fight. This fight could help to spell out the future of relations between European leagues and the NHL. Should player transfer fees grow significantly, likely good players will not play in the NHL because it will be prohibitively expensive to bring them to the NHL. It may allow European leagues to keep more of their elite talent at home. While this would be great for European hockey, it would be a blow to the NHL.

Here is the TSN story on this issue.

While I completely undestand the argument of the Euro teams, the Russian teams basically force their players to sign long-term contracts as kids to ensure their services. Why would Malkin, a player who likely knew he'd be in the NHL, have a long-term deal with his Russki club?

What's stopping the Pens from bringing over Malkin? Not much, except maybe the mafia.

If I were the pens, I'd tell Magnitogorsk and the russian fed to take the $900,000 or leave it.
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