Swedish top hockey clubs are contemplating with grandiose plans for the future,  but are the plans realistic and why at all are the clubs considering retreating  from the supposively safe haven of Elitserien?

Since the KHL was announced last year, the top Swedish Elitserien clubs of Färjestads BK, HC Frölunda, Linköpings and HV71 fear becoming squeezed between the two giants; the NHL to the west and the KHL to the east.

The four Swedish clubs are among the highest income generating hockey clubs on the European continent, but they don't feel that they can compete with the NHL and the KHL.

While the NHL's import of European players has declined considerably since the CBA in 2005, Sweden continue to lose many players to the NHL. With the start up of the Russian-led Kontinental Hockey League (KHL) in 2008, the situation has gone from bad to worse. Though the KHL didn't sign many Swedish players in its first season, the Elitserien did lose some of its most skilled players such as Johan Åkerman, Tony Mårtensson and Matthias Weinhandl.

Last Summer, HC Frölunda's chairman, Mats Ahdrian, commenting on Frölunda's record turnover of SEK127 mio. (US$21 mio), said that while the result was good seen from a Swedish perspective, its not good enough in the light of the challenges which Frölunda and the Elitserien are facing from the NHL and KHL.

"We are doing very well in the Elitserien", Ahdrian said. "But in order to keep and attract the best players, we have to pay higher salaries. This in turn requires an increase in the turnover", Ahdrian said. "To compete with the Russians and the NHL, we have to at least double our turnover, and I hope we will be able to accomplish that within two or three years".

What adds to the story is that the fault-lines between the affluent and poorer Swedish clubs have grown bigger in recent years. The poorer clubs have argued for a salary cap which would seriously hamper the richest clubs' attempts to compete with the KHL and NHL. Several Elitserien clubs have furthermore argued for the Elitserien to be closed (like the Finnish SM-Liiga). This proposal has naturally faced strong resistance from the clubs in Allsvenskan.

The debate has raged in the Swedish media for more than a year now, and the fans have rubbed their eyes in disbelief over the fact that some of the best Swedish clubs are even contemplating the idea of leaving Elitserien in favour of an international league.

What future plans the Elitserien clubs exactly have in mind still remains unclear. Last year, Frölunda and Färjestad openly announced that they have received offers to join the KHL. At the same time, there was talk about developing the Nordic Trophy, a summer exhibition tournament, into a regular league with participation of Finnish, Swedish, Norwegian and possibly Danish teams.

Ideas and options for the future

A few days ago, Håkan Loob, the club manager of Färjestads BK listed the options for the future. His list, however, didn't remove the fog, but merely summed up the options which have been aired in the debate:

• Elitserien to be continued albeit reformed
• A new Swedish professional league with possible inclusion of foreign clubs
• A Nordic league
• A European League
• A pan-European KHL League with an Eastern and Western Conference

Håkan Loob is currently working full-time studying the options and has announced that he will present his conclusions by the end of the year.

Yesterday, HV71's chairman, Hans-Göran Frick, however, painted a cleaerr picture of what the socalled NT group (Frölunda, Färjestad, HV71, Linköping and Djurgården) has in mind.

In an interview with Aftonbladet, Frick was not shy of pointing out that his long-term goal is a NHL style European Hockey League with an Eastern, Central and Western Conference.

According to Frick's strategy, a Nordic League should be established as a first step. The league should start with 10-12 teams (5-6 Swedish and Finnish teams). This league, which could also include a Norwegian team (Vålerenga, Oslo), could start as early as 2010-11, but more likely in 2011-12 when the current agreement among the Finnish SM-Liiga clubs expires. In the longer run, the league could be expanded to 16 teams from the four Nordic countries; Finland, Sweden, Norway and Denmark. The Swedish teams listed by Frick are HC Frölunda, Djurgården, HV71, Linköpings HC, Malmö Redhawks and Färjestads. The teams listed from Finland are TPS Turku, Jokerit, Espoo Blues, Kärpät Oulu and Tappara Tampere. The Norwegian team listed is Vålerenga, Oslo and from Denmark, an unspecified team from Copenhagen. Its interesting to note that the past years' winners of the Finnish SM-Liiga, JYP Jyväskylä and HPK Hämeenlinna aren't mentioned.

In the longer run, the Nordic league may be turned into a Nordic Conference of a European Hockey League. In this setup, Frick also envisions a Central Conference with teams from Central Europe (Austria, Germany, Czech Republic, Slovakia and Switzerland). According to Frick, the candidates for such a conference comprise Eisbären Berlin and Kölner Haie (GER), SC Bern and ZSC Lions (SUI), Slavia and Sparta Prague (CZE), Slovan Bratislava and HC Kosice (SVK) and Red Bulls Salzburg and Vienna Capitals (AUT).

When merged into a European Hockey League, Frick envisions that each conference have their separate playoffs (as in the NHL) and that a final round be played between the three conference winners to find a European champion.

Important questions unanswered

 Frick's ideas leave a lot of questions unanswered.

The most obvious question concerns the selection of teams for the conferences. For instance, Frick's list of teams in a Nordic league (or conference) does not include teams north of Stockholm (e.g. MODO, Timrå, Luleå and Skellefteå); neither does the list include Leksands IF, the hockey hot-spot of Dalarne and one of the most popular clubs in Sweden.

As for Finland, the list doesn't include the 16-fold Finnish champions of Ilves, Tampere, nor the current champion of JYP Jyväskylä, or the Finnish champion of 2006, HPK Hämeenlinna. As for Norway, Frick's, and others', proposals beg the question of how it would affect the Norwegian hockey league if it loses Vålerenga, the most successful club in Norwegian hockey history and a team that is winning the Norwegian championship nearly every year. As for Denmark, the proposal suffers from the fact that Copenhagen hasn't been a Danish hockey hot-spot for nearly three decades. Though a multi-arena with a capacity of 15,000 is being planned in Copenhagen, it's still uncertain whether the Danish capital would ever be able to sustain a hockey team on the scale envisioned by Frick and others.

But the plan also raises more fundamental problems. The biggest question is whether it would improve the financial competitiveness of the Swedish elite clubs at all if they joined a Nordic or European league. It may be enough just to point to the failed attempts of establishing a European league in the past.

If this isn't enough to sow seeds of doubts, one could then point to the finances of the Swedish clubs.

Compared with other hockey clubs in Europe, the Swedish top clubs are generating a lot of income. Last season, Färjestads BK generated a staggering SEK 180 mio. (US$30 mio.) in turnover. From a financial point of view, however, the position of the Swedish clubs isn't very good. Even though the turnover has doubled or tripled in the past five years, in nearly all clubs, the return of investment remains incredibly low. Last season, Färjestad ended up with a round zero in profit.

In order to compete with the KHL, the Swedish clubs will have to increase their turnover at a much faster pace than the KHL clubs. They may, as Mats Ahdrian has stated, at least have to double their turnover before they are in a position to compete.

Currently around 40-50 percent of their income is generated from gate receipts. TV rights account on average for about 10-20 percent while sponsor income accounts for 30-50 percent.

Among those income streams, sponsor income is the most uncertain factor. As the global financial crisis has shown, sponsor income is very sensitive to the business cycle and is often one of the first expenditures that businesses cut when they face financial strains. For the Swedish clubs, it would be hazardous if they pin themselves to this sort of income in their quest for becoming more competitive in the future.

As for TV rights, the Elitserien clubs already have the most lucrative deal in the world. The previous deal was worth SEK200 mio. and gave each Elitserien club an extra annual income of SEK18 mio (or US$3 mio). By comparison, the NHL teams only get US$2 mio. from TV rights!

It is not guaranteed, rather it is actually unlikely, that the teams in a Nordic league would get a much better TV deal. Aftonbladet, a leading Swedish newspaper, has speculated that the teams in a Nordic league could each get as much as SEK60 mio (US$10 mio) per year. This sounds ludicrous as this would almost put the Nordic hockey teams in the same league as the teams in the English football premier league. It is perhaps more likely that the Nordic league would receive a worse deal than the TV deal than the Elitserien clubs have right now. The fans and the media are not enthusiastic about a Nordic league.

In the end, the clubs may have no other option than to raise their gate receipts, and significantly. The immediate problem they would face here is that most of the teams (HV71, Färjestads, HV71 and Frölunda) usually already play at capacity crowds and that several of the clubs have only just started repaying the debt of the construction of their arenas. As new and bigger arenas are not in the cards for a foreseeable future, the clubs would have to raise the ticket prices drastically, perhaps five-fold. One doesn't have to be a genius to predict how the fans would react to this. In a Nordic league there is no guarantee that the Swedish clubs would play at full arenas if they even lowered their ticket prices.

History has shown that European hockey is intrinsically a local sport. In nearly every European country it is the derbies between neighbouring clubs that draws the biggest crowds and the most attention from the media. So far, the European Hockey Champions League has done nothing to change this.

From this perspective it would seem that the Swedish, and Finnish, clubs are playing a huge gamble in their plans for the future.

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