Russian Answer to NHL Spreads Sway Amid Ukraine Sanctions

As the U.S. and Europe widen sanctions on Russians and companies they control for failing to defuse a crisis in Ukraine, the Kontinental Hockey League may allow President Vladimir Putin to expand his influence abroad.

In today’s decisive seventh game, Russian team Metallurg Magnitogorsk beat Lev Praha of the Czech Republic 7-4 to win its first Gagarin Cup. Lev joined the KHL two years ago, with clubs from the capitals of Slovakia and Croatia among four teams from outside Russia to have entered the league in the past six years.

In the aftermath of its annexation of Crimea and the failure, according to the U.S. and the European Union, to help dissipate a crisis in eastern Ukraine, the KHL may be a way for Russia and its political and financial elite to increase their wealth and influence through “soft power,” said Michael Romancov, a political scientist at Charles University in Prague.

“This is one of the most successful Russian attempts of spreading their soft power beyond their borders,” Romancov said by phone. “So far, economic and sport relations between the EU and Russia are exempt from any sanctions, but the future will depend on how the situation in Ukraine unfolds.”

Stanley Cup

The victory in Magnitogorsk tonight made Metallurg the first KHL champion to be managed by a North American. Head coach Mike Keenan will celebrate the triumph in an industrial city about 8,600 kilometers (5,300 miles) from where he guided the New York Rangers to victory in the National Hockey League’s 1994 Stanley Cup Final.

Lev, which has no Russian players on its roster, was vying to become the first team from outside Russia to lift the Gagarin Cup, named after Russian cosmonaut Yuri Gagarin, the first man in space.

The KHL’s management approved expanding the league to include three new clubs, adding Helsinki’s Jokerit and two from Russia -- Lada Togliatti and a team from Sochi, which has no official name yet, according to a statement published today.

Sports is a “form of popular culture that reinforces Russia’s soft power,” Agnia Grigas said in a Chatham House paper published in 2012. Grigas characterized Russia’s use of soft power as “the creation of loyal interest groups that involves co-opting decisions makers through financing and valuable connections and contracts.”

Soft Power

“Russia’s Kontinental Hockey League, which since 2008 has united teams from the former USSR, is one such mechanism,” Grigas said. “In addition, a number of athletes from the Baltic states choose to play for Russian teams or train in Russia where they sometimes receive better funding.”

Teams owned by tycoons in President Vladimir Putin’s inner circle and sponsored by state companies including OAO Gazprom and OAO Rosneft, may be hurt by U.S. and EU sanctions.

One of the latest expansion teams, Jokerit, was bought last year by Russian billionaires Gennady Timchenko and brothers Boris and Arkady Rotenberg, who are subject to U.S. sanctions. The latter of the brothers is president of Dynamo Moscow, a two-time Gagarin Cup winner, while Moscow’s other team, CSKA, is owned by Rosneft, whose chief executive offer, Igor Sechin, is also under U.S. sanctions.

Arkady Moshes, head of the EU’s Eastern Neighborhood and Russia research program at the Finnish Institute of International Affairs, questions whether Russia’s hockey diplomacy has improved its standing in countries still simmering with resentment over Kremlin-backed Communist rule.

Not Effective

“I believe that the KHL is not an effective instrument of soft power,” Moshes said by phone from Helsinki. “I do not think that it helps Russia to make others want what it wants without resorting to coercion or money, which is the classical definition of soft power.”

Lev’s co-owner is Evgeny Myshovskiy, who’s also on the board of directors for Gazprom Schweiz AG, a subsidiary of LLC Gazprom Export. While neither Rosneft or Gazprom are subject to sanctions, U.S. officials have threatened to impose penalties on Russian industries, including banking and energy, if Putin increases tension in its neighbor.

The league isn’t immune to the crisis in Ukraine. Dinamo Riga may leave the KHL due to the conflict, former Latvian President and Dinamo Riga board member Guntis Ulmanis said on March 19.

Latvian Demurral

“If the aggression continues and doesn’t stop, then of course cultural links, and sport, and team, and other links will be stopped,” Ulmanis said on the television show Sastregumastunda.

The league began in 2008 and three years later suffered the loss of 43 people from the Lokomotiv Yaroslavl team, including former NHL players, in a plane crash.

Lev Praha coach Kari Jalonen sees the potential for the KHL to become a pan-European league.

“Lev has already shown that even a relative newcomer stands a chance of winning the cup,” he said yesterday in Prague. “I don’t want to comment on politics. My job is to get the team ready and win.”

To contact Bloomberg News staff for this story: Michael Winfrey in Prague at mwinfrey@bloomberg.net; Lenka Ponikelska in Prague at lponikelska1@bloomberg.net

To contact the editors responsible for this story: James M. Gomez at jagomez@bloomberg.net Paul Abelsky, Balazs Penz

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