Why the Increased Salary in the KHL Comes With Increased Risk

August 23rd, 2010 by Edmond Dantes Leave a reply »
Many players in the NHL are going to the KHL. They can say whatever they want but at the end of the day the real reason they go to the KHL is money. First they offer a higher salary (for instance Evgeni Malkin was offered $12 million per year). The second issue is that the taxes are so much less (the $12 million offer was really worth $15 million in the US). 

So it seems logical to go to the KHL to make money right? And with all due respect to the fans, hockey is a short career. So I have no grudge against a player for doing that. After all, they need to make money too. 

The KHL however, is not giving their players more money. In fact, I would say the higher salary is due to the risk involved in signing a contract with the KHL. One of the things we learn in finance is risk is uncertainty, and the higher the risk the more money we need to be compensated for that risk.

So what is the risk in the KHL? Quite simply it is that you just will not be paid properly. That is to say they do not always honour their contracts. This thought first came into my head when I read an article stating the KHL teams were not all paying their players fully. T ...

Read Full Article at Bleacher Report - NHL
Article written by


Comments are closed.