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The SHL and NHL: A system in symbiosis?

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The NHL would do well to allow Sweden's hockey program to do what it does best: develop world-class hockey players.

Brian Bahr/Getty Images

In the early 1970s, Europeans began to take the World Hockey Association and National Hockey League by storm, led by Swedish players such as Ulf Sterner joining the New York Rangers, Thommie Bergman coming over to play with the Detroit Red Wings, and Börje Salming and Inge Hammarström becoming Toronto Maple Leafs.

At the time, 96.7 percent of the league's players were Canadian

Today almost 10 percent of players within the NHL are Swedish, and the national team has advanced to the final at the Winter Olympics twice in recent times: winning gold in 2006 and finishing the tournament as runner-up in 2014.

JdlR Photo credit: Getty Images

Sweden's top professional league — the Swedish Hockey League, or SHL — is arguably the third-best league in the world, despite the country supplying their best players to the NHL year after year. Players such as Henrik Zetterberg, Niklas Bäckström, and Erik Karlsson currently ply their trade on the opposite side of the Atlantic, while Nicklas Lidström, Peter Forsberg and Mats Sundin were NHL superstars who played little of their careers in their native Sweden.

The move to North America creates an influx of talent to both the NHL and the American Hockey League, and an equal loss of potential quality for the SHL. How can Swedish clubs survive what amount to "video game trades" when elite athletes transfer to an NHL organization?

The transfer agreement

In the past, player movement would take an athlete's inter-European hockey contract into account when working out the details. Because individual countries may have different reasons to want to limit a transfer or block it altogether, national organizations now have control over their own talent. Therefore, the Swedish Ice Hockey Association (SIHA) now negotiates on behalf of all Swedish clubs (including those in the top-tier SHL) when dealing with the NHL about player transfers.

In the current agreement between the NHL and SIHA, as soon as a player is signed by an NHL club, the team is required to pay $240 000 (USD) to SIHA. That number jumps to $325 000 for the 11th (and above) Swedish player signed to an NHL contract in any given season.

This money is then distributed through to the Swedish clubs that previously held the player's license. For example, Anders Andersson was licensed at 16 years of age to North IceHockey club, moved to East IceHockey at 18, got drafted into the NHL at 19, and signed an NHL entry-level contract at 20. In this particular case, the transfer fee will be distributed among the clubs who held his license over the previous four years, so North and East will get 50% of the money — $120 000 — for the two years each organization had previously invested in Andersson.

This method of distributing funds leads to some small clubs getting a fair bit of money down the line. Vice President of the SIHA, Peter Forsberg, was very happy when speaking about this and pointed out clubs at all levels from SHL to Regional Division 4 as in the case of Nor IK and Sudret HC, and Regional Division 3 teams Arlanda and Mariestad (for former Montreal Canadiens prospect Sebastian Collberg) as recipients of NHL transfer funds.

Last year those funds amounted to approximately 60 million Swedish kronor (about $10 M USD).

This money will usually be spent on training for coaches, club facilities, etc. which will benefit the club long term. Swedish clubs also pay a development fee when signing players from other teams, thereby making sure that there is a movement of money down through the divisions, but maybe not as much as it could or should be.

In this relatively new deal between the NHL and SIHA, the big push from the SIHA was that NHL clubs had four years from signing a player to bring him over to North America, whereas this was previously two years. This was done in order to let the player receive more of his development in Sweden compared to the two years they previously had.

This essentially means that the product the NHL club would get after four years would be a better-developed player that can perform for the team on a regular basis instead of struggling in unfamiliar surroundings in the AHL. This was highlighted to me as a success — for both parties of the agreement — by Forsberg.

NHL clubs paid out approximately $60 million kronor (about $10 million USD) in Swedish player contract fees last season

What the SIHA wanted to achieve with this was that players get to develop in familiar surroundings, and maybe succeed to get a few international matches on the CV.

If you are drafted into the NHL at 18, the selecting team then has four years to monitor the prospect, and rather than bringing over a 20-year-old with some developmental question marks, you can continue to monitor the prospect from overseas; something that has been made easier with video highlights from leagues and better coverage in general. Forsberg continued to say that he would prefer after the four years had passed that the NHL club could still sign the player to a professional contract and then loan him back to the Swedish club, "which would still benefit everyone."

How does Forsberg rate the relationship between the SIHA and the NHL? "Good, very good even. It’s an important negotiation and there is obviously things we never thought would happen that can happen, but our relationship is really good."

It’s also worth remembering that, right now, Sweden leads the Western European nations in producing top-quality hockey players, but at any given time this can change, with Finland and the Czech Republic being the current best candidates to take over the global number-three position. "The important thing is that the country that has most players negotiate a good contract as it blazes the trail for the other countries to get a good deal as well," says Forsberg.

What Forsberg would like to see happen is NHL clubs being a bit more patient. "They obviously want quality and we really want to provide quality players that can make an impact at that level."

For Swedish hockey to benefit more from its own talent, he would like to see players developing longer in Sweden, citing William Nylander (a Toronto prospect) as a prime example. "Why should he really be in AHL? He would get a lot of ice time in Modo, and Modo would really benefit from having him there. He would also bring in audience to the arenas with his skill on display; getting a few caps in the national team. It would certainly benefit us all in the long run.

"But these things take time to change and we can see both sides of the coin and I hope the general managers can see our side as well. It comes down to getting a player that is ready to play something that the NHL clubs would cherish as well."

Forsberg then highlighted something he would like to see become the norm, mentioning Dallas Stars' rookie Mattias Janmark as an example. Janmark moved from AIK to Frölunda to develop at a higher level for a year, then continued to play in Sweden during pre-season and the first few games of the regular season this year before going over to Dallas and taking a regular spot on the NHL team.

"This is what we want to achieve, this is how it should be. Everyone was surprised by how good he was and that he managed to take a roster spot, but that’s how it should be when the system works. You get a player that is ready to play at an NHL level, not play in a farm team".

Another thing that is worth pushing for is to have the prospects play at the World Junior Championship, says Forsberg, using Filip Forsberg (Nashville) and Elias Lindholm (Carolina) as examples where they have had a great working relationship with the respective clubs. The Vice President of the SIHA had told the clubs that "we want them to play on the first line, on the power play and boxplay [penalty kill], and we will have them in front of the cameras at all the time we can.

"After the WJC tournament the clubs had called back saying 'this was not the same players we gave you, they are so much better now.' It is a once-in-a-lifetime opportunity and something everyone should be part of. A young player would benefit more from playing such a tournament rather than get low minutes in NHL or sit as the 13th forward in the stands."

Relegation in the Swedish System

The SHL is not a closed league (few European leagues are) and the impact of losing a good young player for a team could easily be the difference between staying up or having to play to avoid relegation to a lower tier.

A team that gets relegated from the SHL to Allsvenskan loses a lot of money, and turnover in the club will be cut dramatically. The implications of this are obviously massive.

Last year, HV71 paid the largest amount in salary of any SHL club, bringing in a flood of expensive talent in an effort to avoid the relegation zone; a move that proved successful. As the amount of turnover and marketing value is huge for a team in the country's top league, such a desperate expenditure could be recouped with another season in the SHL.

One club, Västerås (former team of Hockey Hall of Fame inductee Nicklas Lidström), was not so lucky, and was forced by financial difficulties to restart the team as Västerås Ungdom (Youth), a bit like Florentina in Italian football, and has climbed back up to play in the second-tier Allsvenskan. AIK was relegated to the third-tier Division 1, now called Hockeyettan, in 2003-04 for similar economic reasons.

This season, talent factory Modo, whose fans have seen the likes of Peter Forsberg, Markus Näslund, Henrik and Daniel Sedin, and Mats Zuccarello (to name but a few) come through the ranks, is facing a similar fate.

The Modo situation

Last season, William Nylander produced 20 points (eight goals, 12 assists) in 21 games in the SHL.  When he left to join the Toronto Maple Leafs organization, Modo plummeted down the leaderboard.  When the team fell in the standings, fewer people bought tickets to attend the games, and were not present to purchase merchandise or concessions.

Nylander Photo credit: USA TODAY Sports

Few clubs have given the NHL the quality and quantity of players through its history as Modo. Wouldn’t it make sense for NHL general managers to try to keep a team of that calibre doing well, rather than take one of their top talents and place them in a secondary league in North America? Modo obviously has a system that is successful, so to tap that system of all talent and see it crumble, is that a good strategy?

Last year Modo had most of their wins with Nylander in the lineup, and could possibly have avoided the relegation series if he had still been part of the team. I understand that a team's GM will have to do what is best for his NHL club, but having one of your top prospects play in an unfamiliar environment with lower-quality talent may not be the best solution.

Rethinking the development of European prospects

NHL teams have no obligations to support a team in another country or league, I am aware of this, but what really is the harm of thinking a step further?

Sweden is 7.5 hours away on an airplane; it is not at the end of the world. With the updates and highlights online it is much easier to keep track of your prospects, even if they are over in Europe. Most Europeans speak more-than-passable English, and the time difference is not so bad if you want to talk to them or their coaches.

One argument for moving Europeans to North America to play in the AHL is the NHL-sized rink, but the difference isn't really as large as it's sometimes made out to be. The alternate dimensions don’t seem to be holding Auston Matthews back in Switzerland, nor did they prevent Team Canada from being able to translate their game in the Sochi Olympics. Nor has it affected either Mattias Janmark or KHL transferee Artemi Panarin. I think it is time to put that old idea to rest.

There are obviously arguments for both sides of the coin: in North America you play to make the NHL, whereas in Sweden and other European leagues you play to reach the top of the league (or to receive a promotion to a better one), and if you are good enough you will also get the chance to play for your national team. In Europe there seems to be more focus on building each team to win, while it often appears that the AHL is more a place to keep a close eye on your prospects.

What benefits a player’s development most: playing in the AHL or SHL (or a similar league)? What drives the move over the Atlantic? The NHL clubs? The parents and players expectations? Or is it agents pushing for a move in order to get their share of the money?

I don't know the answers to these questions, but it is something to consider for the future. One thing is certain: no matter their nationality, all players want to play in the NHL at one point. You want to be measured against the best. The question is: which is the best way of getting there for all parties involved?