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NHL QUICK SHOTS
By Josh Brewster

Ironically, Russia proves that capitalism works
KHL Jolts NHL, WHA-style

JULY 19, 2008 -- In an amazing twist of fate, the country of Russia, which took the millstone of communism off its neck for good almost 20 years ago, has given the free market a shot in the arm with its unveiling of the Continental Hockey League (KHL).

Opening its doors this fall, the KHL will be comprised of 24 teams, including all 20 teams from the Russian Super League. A number of business entities, led by a Russian company called Gazprom, will lead the effort.

The league will present its champion the Gagarin Cup, named after cosmonaut Yuri Gagarin, the first man in space.

Radulov's position, and the KHL's as well, is that since the Preds star signed five days before the league and the NHL signed a transfer agreement on July 10, Radulov is free to sign with the KHL. The NHL, however, is hoping that the IIHF will intervene in their favor, as the IIHF will be investigating the situation of six KHL signees.

For the players, more money is going to flow to them courtesy the addition of the KHL.

The NHL will cry foul, but capitalists like me call it "Karma," (for more on this, listen to Adam Proteau's recent appearance here on Hockeytalk Web Radio).

Hockeytalk believes that the free market will make the NHL better, regardless whether some players get poached.

During the lockout, one of the big mistakes that Bob Goodenow made was that he put forth the ridiculous argument that a salary cap flew in the face of the free market. But the NHL is not a free market. It is a self-contained, franchise business. It can set a salary structure for its franchises, if it so chooses, just as surely as does 7-11 or Marriott Hotels.

The real free market--as we've always argued here on Hockeytalk--is around the globe, amidst all of the pro leagues in North America, Europe, Asia and elsewhere. If a particular player feels that he cannot work in an NHL with a $41-57M cap range (2008-09 numbers), he's free to go to any corner of the globe to earn more (and forfeit his right to play for the Stanley Cup).

The NHL was right to call for a salary cap, right to lock out its employees, right to do the right thing by its franchisees.

But now the KHL is invigorating the world of hockey in a style not seen since the beloved, defunct WHA during the 1970s. Back then, NHL players were at the mercy of the clubs who employed them, with no free agency available.

The world is wildly different now, of course.

The idea that a Russian company worth $304 Billion is mounting a heads-up challenge to the NHL and other leagues is rich with irony. Even with the coming assistance of several other state-run businesses, it's still just delicious to consider that a shot in the arm to the free market is coming from the home of Josef Stalin's gulags. During the 60s and 70s, when Russian hockey evened the playing field, its players remained shackled, subjugated, as was the general population, their freedom deprived by a horrible system that is thankfully gone.

Now, after years of seeing Russian and other European talent flee for the world's best league, the NHL is going to have to deal with this karma shot. They'll continue to lose talent--regardless the transfer agreement--to the KHL, and it says here that that's a welcome change.

Older veterans who require huge sums will relieve the NHL of paying for their bloated old selves. Young players who the NHL could use to improve its league will sometimes opt, as did Alex Radulov, to return home. The NHL will have to deal with the costs, and benefits, of having the KHL and other leagues poach its players.

Capitalists must always perform a cost/benefit analysis when examining new initiatives and trends. Hopefully the NHL welcomes the KHL competition like good capitalists do.

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