With Evgeny Kuznetsov stating his desire to stay in the KHL but possibly switching teams, and Traktor management— well, disagreeing, we explored what Kuznetsov’s actual options are this Summer. Is being a restricted free agent in the KHL the same thing as being an RFA in the NHL? Can the KHL just dump buckets of cash at Kuznetsov’s front door? Do the Caps have any chance of landing him, especially considering the monetary limitations of the NHL’s entry-level contracts?

Below, I explain the rights of a restricted free agent according to the KHL’s Legal Regulations handbook (the league’s governing document), what Evgeny Kuznetsov’s options are, and if the Capitals still have any shot of bringing the talented winger over to North America.

The KHL’s rules for free agency (including the rights of the players and teams) are similar to those of the NHL, but there are some significant differences.

KHL contracts run through the end of April each year. Players continue to report to the team and receive paychecks even if their teams do not make the playoffs or are eliminated earlier.  A player becomes a free agent on May 1st of his last year under contract. The player’s free agent status will be either restricted (RFA) or unrestricted (UFA) – depending on his age, which is defined by the player’s birth year (e.g all players born in the calendar year 2001 are considered 11 years old for the upcoming free agency season – unless child labor is finally abolished in Russia).

If a player with an expiring contract is 29 years or older, he is considered UFA; there is no significant difference between NHL and KHL UFA rules – and we don’t need to worry about it for another 9 years as far as Kuznetsov is concerned.

If a player with an expiring contract is between 22 and 28 years old, he is considered a RFA – with rights and limitations somewhat similar to those in the NHL. The player’s current team must make a qualifying offer (QO) in order to retain the rights to the player. Such an offer must be made during the month of April, it must to be for a minimum of two years, and there are no limitations on the salary as long as it is above league minimum (which is much lower than NHL). The player is free to negotiate and sign with any team starting May 1st, but the current team has the right to match the contract terms and retain the player (same as NHL). The player has until May 31st to negotiate with other teams; if there is no contract offered, he loses his right to solicit offers from teams other than his current one. If the player accepts an offer from a new team, and the current team does not exercise its matching right, it receives monetary compensation based on a formula that I refuse to even attempt to comprehend. More importantly, Kuzya is too young to qualify for this group as well, so we move on.

If a player with an expiring contract is less than 22 years old (as is the case with Kuznetsov), he is considered an RFA – but of a more restricted flavor. The old team still must make their QO as described above – but in this case it must guarantee a 50% (1st year) and 75% (2nd year) raise to his salary in respect to the compensation he received during the last year of his expiring contract. More importantly, as long as the QO is made, the current team retains exclusive rights to the player, who may not negotiate with and accept offers from any new team.

So what does it all mean? Kuznetsov’s current team Traktor unequivocally stated that they will make Kuznetsov a proper QO. They would be foolish not to, as it would lead to them losing all their rights to Kuznetsov without any compensation. I do not know Kuznetsov’s current salary, but it is rumored to be around $1M – so the QO would be for at least $3.25M over two years (1.5 + 1.75). Once such QO is made in April, no other team in the KHL can try to sign the prized youngster, not even SKA with their Gazprom-supplied gazillions. The regulations do not preclude Traktor from making their QO for a higher amount or longer term if they wish to do so, but then again they can just open with a minimum required QO as a starting point in their negotiations.

Also, while Traktor’s financial situation has improved lately (with the corresponding progress in the team’s success on the ice), and they should be able to afford Kuznetsov’s new salary, it is still a club of modest financial means. If they do re-sign Kuznetsov, however, they may also apply to the KHL for a special stipend to supplement the young star’s salary. There are no specific limits on the amount of such a stipend, or any clear criteria defining eligibility. (The NHL does not seem to have a similar rule established yet, but it would be very cool for the league to come up with such slush fund and name it after Alan Eagleson.) It appears that Kuznetsov would be eligible for such a stipend only for one year, as the age limit for eligible players is set at 20 years.

Another possibility is for Traktor to trade their rights to Kuznetsov to another KHL team. They would be able to do so as soon as the season ends, provided the formalities of a proper QO has been satisfied. That may be the direction Traktor decides to pursue, especially if the club’s relationship with their young star deteriorates. However, trading players or players rights is a less common practice in the KHL than it is in the NHL – perhaps at least in part due to the fact that KHL contracts often can be bought out by players or canceled by mutual agreement between a player and his team, or even unilaterally by the team.  Nevertheless, last summer there in fact were three cases of young players (Timkin, Alexandrov, and Tikhonov) transferring to new teams despite the wishes of their previous teams. Eventually, the teams received significant monetary compensation.

The exclusivity of the current team’s rights to negotiate with its own RFA has certain limitations: it stops at the water’s edge. Come May 1st, there will be two clubs in the Humongous Universe of Hockey (HUH) eligible to negotiate with Kuznetsov – HC Traktor and the Washington Capitals. And if Evgeny decides to sign with the Capitals, Traktor gets absolutely nothing. If the league or Kuznetsov overplay their hands b trying to strong-arm Chelyabinsk into letting the youngster jump to a rival KHL team, that could become the least of all the bad choices available. Whether the club would be interested in such a Pyrrhic victory remains to be seen.

So this is The Book. However, as we all learned by watching the events of Radulov-gate v2.0, things don’t always happen by the book in Russia. The KHL rules allow for a number of ways for an existing contract to be voided – unilaterally by the player or the team, or by mutual consent. Radulov’s team Salavat did not agree to terminate the contract by mutual consent, so Radulov was forced to do it unilaterally – sort of. I say sort of because such actions are explicitly prohibited by the KHL in article 30.7 of the KHL Legal Regulations while the playoffs are under way, regardless of if the team is still in the playoffs.

Alex Radulov tries to smile during his cross-Atlantic flight to America. (Photo credit: @RADUL22)

Also, there are no provisions in the rules that allow for a partial termination of the contract, which what seems to have taken place as only this season portion of the contract was terminated, while the 2012-13 portion remaining intact. Nevertheless, Radulov is on his way to Nashville as I type. #RussiaTypical

Oh, and in case all this is isn’t sufficiently confusing, here is another little tidbit: early this season, the KHL released an official statement declaring their intent to make change to the rules in time for 2012-2013 season. Oh joy!

So, the situation is far from clear. It is obvious that Traktor is not thrilled about Kuznetsov’s pronouncements about options with other KHL teams. Will they decide to play hardball with Zhenya – or are they simply posturing and trying to position themselves for a better return at the end, having already conceded that Kuznetsov is moving on? How far is the KHL willing to go in order to keep their brightest young star from leaving for North America – and what can they offer to Traktor if Kuznetsov decides Chelyabinsk is too small for him? How much interest is there from SKA – and will another KHL powerhouse make a major move in the race to get Kuznetsov?

And will Kuzya eventually get fed up with this charade and hop on a plane across the ocean sometime this summer? Many Caps fans certainly hope the answer to the last question is yes.

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  • Hattmarrington

    WE MUST GO DEEPER…what if it’s all a hoax, and Kuzy’s just trying to sap GMGM into giving him an Ovi-esque 10 year deal? hmmm

  • http://twitter.com/FedFedRMNB Fe(yo)dor Fedin

    It’s impossible due to the ELC regulations.
    Mike Comrie. used a loophole to get an FA status and sign the deal he wanted, but that has been closed already

  • Mj90ncaps

    So basically, he won’t come to NHL? Wants more money and he can’t get it in Washington.

  • DanW

    We need Ovie to play recruiter here. Perhaps Semin and Orlov too, but Ovie needs to start tweeting/calling/visiting kuzya and buying him fruit baskets

  • Viennamic

    3.8 is roughly all the caps could give; but people are leaving out all that Joe Hadeed money when they think about what Washington could offer…

  • Dave_b

    Somebody needs to do a pro/con list for a 19/20 year old superstar. It seems like you can get paid much more money in the KHL than the NHL, but then there are other things to factor in like crummy medical care and planes.  If you are 19/20 years old are you better off getting a huge contract in the KHL and having your career ended after a year or getting an NHL ELC and having your career ended after a year.  The KHL MIGHT BE the risk averse option if you want to ensure financial well being for the rest of your life based on 1 year’s worth of pay.

    Could the next NHL CBA take into account that the NHL might need to pay more on ELCs in order to ensure we get you superstars here? Is Kuznetsov an isolated incident? What is stopping Yakupov or Grigorenko from jumping ship to the KHL. Yakupov has been injured recently so maybe he realizes the value of one large payday

  • Yv

    It seems really murky water there and Kuzzya still can go where he wants. The Caps can be in play if they will offer maximum ELC with P bonuses which give him around 3.8M$ per year for 3 years. The main unsettled question is whether Caps will lose Kuzzy rights due to 2 year after draft NHL limit if he stays in KHL and will not sign with Caps next summer. That would be a real blow to Caps. 
    This problem of unsigned European (Russian) draftees is even more murkier and someone should investigate it and write in depth. If Kuzzy will signed even this minimal QO for two years with Traktor Caps might lose him forever according to 2-year NHL rule.

  • http://twitter.com/IgorKleyner Igor Kleyner

     Good point about having to sign draft picks within 2 years or losing the rights.  I know there used to be an exception for European players – but can’t find it in the CBA now.  Although, for example, Igor Makarov was selected by Chicago in 2006 but signed only in 2010, and he played in Russia prior to signing with them.

  • http://www.russianmachineneverbreaks.com Ian Oland

    The most interesting part of this post is the revelation that the KHL can give special stipends (on top of their new contracts) to players to keep them in the league. That could be a huge wildcard in these negotiations. The President of the league, Dmitry Medvedev said this yesterday:

    “Kunzetsov told me [at the MHL u-18 ASG in Chelyabinsk] that his negotiations with Traktor are going really well. He was also happy to get to know that he’s eligible for KHL bonus [for young players]. I hope he stays in our league.”

    Sigh.

    Thanks for the translation, Fedor.

  • http://www.russianmachineneverbreaks.com Ian Oland

    Joe Hadeed, show me the money!!!

  • http://twitter.com/IgorKleyner Igor Kleyner

     Here is another example – Kirill Petrov drafted by NYI in 2008, never signed with Isles, playing in the KHL. Islanders still own his rights here.  Go figure…

  • http://twitter.com/FedFedRMNB Fe(yo)dor Fedin

    Due to the lack of transfer agreement between the NHL and the KHL team drafting player out of KHL holds his right for indefinite period of time.
    Same thing was with SM-Liiga for a short period of time (see: Toronto Maple Leafs still holding Leo Komarov’s rights).

  • brian!

    Wow, you did a terrific job on this piece.  Extremely informative!  Thank you for posting it.

  • Yv

    What about that Swedish guy whose rights Flames traded just before expiration date to NYR after being under the threat of losing him b/c of been unsigned for two years.
    And is an Agreement signed by NHL and KHL last summer somehow can be treated as transfer agreement also? 
    Someone should find out and clarify. Otherwise, Caps, Kuzzya, NHL and KHL will end up in worst situation than with Radulov.

  • Yv

    Moreover, to my understanding CBA was amended 1-2 years ago and exclusion rule regarding European draftees unsigned within 2 years was removed. So that all draftees seemingly should be under the same rule ‘unsigned within 2 years you are free agent if you are more than 20 years old’, and maybe that has been applied to that Swedish player. Really should be all this clarified before Kuzzya decide to sign another KHL contract. Or he will end up in future in Nabokov situation.

  • Pattyo

    Et tu, Kuzya?

  • http://twitter.com/IgorKleyner Igor Kleyner

    well, our second favorite Dmitry in the world explains it all right here: http://sports.yahoo.com/nhl/blog/puck_daddy/post/Red-scare-Why-there-s-nothing-to-fear-about-Rus?urn=nhl-250782
    And no, the most favorite is not this guy http://en.wikipedia.org/wiki/Dmitry_Medvedev)

  • http://twitter.com/FedFedRMNB Fe(yo)dor Fedin

    It’s all about the agreement. Sweden has the agreement, KHL doesn’t.

  • Rhino40

    Я сказал: “Корзины с фруктами», не “Столичная корзины”, Саша!

  • Anonymous
  • Dmitry

    I assume you’re talking about Alexander Medvedev, Prestident of the KHL, and not Dmitry Medvedev President of Russia.

  • http://twitter.com/IgorKleyner Igor Kleyner

    Yeah, Ian got his Medvedevs crossed.  That’s nothing though, you should hear him try to pronounce that name!  Every time he tried I was worried he was going to bite his tongue off squeezing out the [DV] part of it.

  • http://twitter.com/IgorKleyner Igor Kleyner

    interesting read – but honestly, way too one-sided.  Almost as if the details were filled in to fit the premise.