Ficcibain

Next year’s Winter Games in Sochi, Russia will mark the fifth straight Olympics in which NHL players will be allowed to compete. For the players, their fans, the International Olympic Committee, and other stakeholders, there are tremendous benefits to this. For the NHL, however, the value is not so clear-cut. The Games fall in the middle of the NHL season, putting a strain on teams’ schedules; the league does not get a cut in the revenue generated; and there is no resulting boost in TV ratings or fan attendance within the NHL’s home markets.

Why then does the NHL continue to let its players participate? The stock answer is that it is good for the sport in general. However, a major reason lies in the presence of an emerging rival league: the Kontinental Hockey League (KHL) in Russia. The KHL has become increasingly successful in luring top European talent away from the NHL so that they can play closer to home. Thanks to this trend, and thanks to the fact that most of the Olympic rosters are indeed from European countries, the payoffs are high for the KHL with respect to favoring Olympic participation. No matter what the NHL does, the KHL is relatively better off if it allows its top players to participate.

The NHL is fully cognizant of this, and so its decision is a very calculated one. If the NHL were to prevent its players from participating, there would be an instantly-galvanized group of frustrated European players who would defect en masse to the KHL, thus exacerbating an already-concerning trend. The competitive balance between the two leagues would seismically shift in favor of the KHL, and so the payoff to the NHL would not be as high as one would originally suppose. Of the scenarios at hand, the NHL is in fact better off sending its players to Sochi next year.