July 09, 2011
The NHL and the KHL signed yet another Memorandum of Understanding. The current MOU confirms that both sides agree to recognize and respect each other's contracts to avoid conflict situations with player transfers. Since there are only nine sections in this MOU, let's dissect it one by one and see what it really means and if this will even work if push comes to shove and a player from either side bolts.
1. From July 1, 2011 both sides have to exchange information about players who have valid contracts with the NHL and the KHL respectively. That information will include player names, dates of birth, their clubs, contract duration and the player status. If requested by the opposite side, a true full copy of the contract would also be sent.
2. The KHL and the NHL are required to provide weekly updates to each other regarding any changes in the player contracts database.
3. Both Leagues must exchange lists of free agents.
COMMENT: The "free agent" is not really defined as both sides treat restricted free agents differently, especially those who file for arbitration. This difference was first brought up a few years ago when Jiri Hudler(notes) signed a contract in the KHL while also filing for arbitration in the NHL. Hudler's KHL contract was signed before his NHL arbitration hearing. It would be interesting to see how an arbitration decision will affect a player who may fall in the category of a "free agent." Additionally, the KHL treats its restricted free agents a lot different than the NHL. While the NHL may consider a player a "free agent," the KHL may still argue that the player is under contract, which was the case of Panthers' Yevgeni Dadonov. For more on the KHL restricted free agency check out my piece from a couple of years ago.
4. No later than July 11 the KHL is responsible to present the NHL with a copy of a standard KHL player contract translated into Russian. The NHL will study this contract and, if there are no questions to any of the sections of such contract, the League agrees to respect the contract in this form and not to sign players who have KHL contracts.
COMMENT: As mentioned above, in cases of restricted free agency, the NHL has already disagreed with the formation of the KHL standard player contract. It should also be noted that KHL contracts are drafted in accordance to laws and regulations of Russia (it is unclear if such standard player contracts for KHL clubs based in Latvia, Kazakhstan, Belarus and Slovakia differ in some ways to reflect the local legislation or if all non-Russian KHL clubs concede jurisdiction). Because of the difference of the legal system, certain sections of KHL standard player contracts may be alien to the NHL and their lawyers. A contract signed in the KHL may not be enforceable in the U.S. in certain circumstances. Again, without looking at the text of the contract it is impossible to argue either way. The example when a U.S. court ruled that Evgeni Malkin's(notes) Russian contract was unenforceable cannot be used as an example as it was governed by Russian labor laws and not the latest laws regarding professional athletes. The KHL also didn't exist at the time Malkin signed his contract.
5. No later than July 11 the NHL is responsible to present the KHL with a copy of a standard KHL player contract translated into English. The KHL will study this contract and, if there are no questions to any of the sections of such contract, the League agrees to respect the contract in this form and not to sign players who have NHL contracts.
COMMENT: Same reasoning as above applies. Contracts governed by common law may be substantially different in their interpretation.
6. In cases of conflicts, both sides appoint their official representatives to conduct negotiations.
7. Both sides are required to present all documents proving or somehow related to the signing of a contract by a player with a club.
8. Toronto and New York will be the venue for the conflicts negotiations of official representatives of both leagues.
9. The NHL and the KHL take the responsibility to do their best to achieve a consensus for every conflicting contractual status of a player, including labor disputed, contract disputes etc. In cases where a consensus is not reached, each side reserves the right to any action it deems appropriate for the circumstances.
COMMENT: With court rulings virtually unenforceable in each others' countries, it is not clear what actions would be deemed appropriate in cases of conflicts. The NHL does hold the upper hand here simply based on their overwhelming influence over the IIHF and Rene Fasel. While the NHL is not a part of the IIHF, the world hockey governing body rarely does something in conflict with NHL's interests. It's different for the KHL, which is a member of the IIHF. In order to play in the KHL, a player must have his IIHF "transfer card" sent to the respective club. Without the card, the player is not eligible to play in the League. This creates problems when, if pressured by the NHL, the IIHF refuses to provide the transfer card. Disputes arose around Radulov's transfer, and even Hudler's transfer card was delayed. The big deal is that the IIHF may ban a player from participating in hockey tournaments held by the IIHF, including the World Championships and, more importantly, the Olympics. The NHL knows how much it means to European players to play for their countries in the Olympics. With their influence over the IIHF, this is the biggest ace they hold.
In conclusion, player poaching is not what this agreement is targeting. From the KHL perspective, it is more geared towards retaining their young talent. Only recently the news emerged that Mikhail Grigorenko, a highly touted Russian prospect who was chosen second overall in the CHL draft, is set to leave Russia to play in North America. The KHL may consider him to be under contract. And next year, if drafted in the NHL and willing to come and play in North America, the KHL may block this move citing the most recent MOU.