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Writer's pictureRyan Lake

INTERNATIONAL PLAYER TRANSFERS IN ICE HOCKEY

International player transfers in hockey are generally regulated and governed by the International Ice Hockey Federation (“IIHF”). Typically, there are four principal types of transfers that occur in hockey.[1] The first type of transfer is the transfer of a player from an IIHF league to another IIHF league.[2] The second occurs when a player in an IIHF league transfers to the NHL or the KHL.[3] A third category is when a player transfers from the NHL to an IIHF member league.[4] Finally, the fourth type of transfer occurs when a player transfers from the KHL to the NHL or vice versa.[5]

I.               First Type of Transfer: Between IIHF Member Leagues

First of all when a player is transferred between two IIHF member leagues, the IIHF transfer regulations outline the proper procedures. For example, IIHF bylaw §206 states that a player must obtain an international transfer card.[6] This card must be signed and agreed to by the player, the transferring league, and the acquiring league.[7] Further, the transfer must be confirmed by the IIHF.[8] Additionally, if the player is currently under contract with a club, the transfer fee may be negotiated among the clubs.[9] According to §5.5 of the IIHF International Transfer Procedure, a player may be transferred while under contract, as long as an agreement has been reached between the player, the acquiring club, and the current club.[10]

II.             Second Type of Transfer: IIHF to NHL

Secondly, when a player is transferred between an IIHF member league and the NHL, a different set of IIHF procedures govern the transfer process. Section 6 of the IIHF International Transfer Procedures governs the transfer of players between IIHF member leagues and non-member leagues.[11] According to this section of the IIHF Transfer Procedures, “player transfers with non-member organizations having a transfer agreement with the IIHF will be executed to follow the conditions specified in the agreement.”[12]

In 2007, the NHL and the IIHF agreed to a transfer agreement that was scheduled to last until 2013.[13] This agreement called for the NHL to pay to the IIHF $9,000,000 for the first 45 free agent players that were transferred to the NHL.[14] Every player transferred after the first 45 would have a $200,000 transfer fee associated with them.[15] However, this agreement allowed for either party to opt out after one year.[16] Both the NHL and many of the IIHF member leagues exercised this opt-out provision.[17] The NHL opted out of the agreement claiming “the change could save NHL teams a combined total of about $11 million a year to sign between 50 and 60 young players from six European leagues affiliated to the IIHF.”[18] Additionally the six leading IIHF leagues, [19] decided to opt out of the agreement claiming that the $200,000 fee per player was far too small of an amount to properly compensate the clubs for the loss of their top talent.[20] The IIHF member leagues also claimed that many of the players transferred to the NHL ended up playing minor league hockey in North America, and it would be better for the players and the European game if the players stayed in their IIHF league.[21] To support this claim the clubs cited the statistic that,

“Of the 59 European players who signed NHL contracts before the 2007-08 season, only six were good enough to play there. Seven returned to European clubs while 46 were sent to North American minor leagues.”[22]

Currently, since all of the top IIHF leagues and the NHL are no longer party to the agreement, the transfer procedures remain in flux with nothing more than the standard IIHF procedures to govern the transfers. However, certain aspects of the original agreement were written into the NHLs Collective Bargaining Agreement (CBA). The CBA is negotiated between the NHL and the NHL Players Association (NHLPA).[23] One of the most important aspects of the agreement in relation to player transfers is the prohibition on player poaching.[24] The concept of player poaching is when an NHL club knowingly pursues a European player that is under contract with a club affiliated with an IIHF member league.[25]

Further, after the collapse of the 2007 agreement in 2008, the NHL signed agreements of understanding with some of the individual leagues. One such example is when the NHL and Sweden’s Elitsrien came to terms on an agreement in 2010. The agreement declared that a standardized transfer fee should be paid for each player leaving Sweden for North America.[26] The agreement outlines a transfer fee of $1,600,000 that must be paid by the NHL for each player that is transferred from Sweden.[27] This amount is more than the $200,000 transfer fee that was agreed to in the IIHF-NHL agreement. Sweden’s ability to raise the price on the transfer of players provides evidence that the NHL is willing to pay a higher amount for top-level players. However, the current CBA expressly prohibits the paying of a transfer fee outside of an executed agreement between the NHL/NHLPA and the foreign league.[28] Therefore, individual NHL clubs are not currently capable of entering into negotiations regarding transfer fees.

III.           Third Type of Transfer: IIHF to NHL

The recent NHL – NHLPA labor dispute highlights the third type of player transfer, a transfer from the NHL to an IIHF member league. The conflict over the new CBA forced NHL players to transfer to IIHF member leagues, at an unprecedented rate.[29] During the 2012 labor dispute between the NHL and NHLPA, 226 NHL players transferred to IIHF member leagues.[30] Fortunately, the transfer process from the NHL to an IIHF member league has the most defined procedures out of the four transfer categories. Specifically, there are two applicable sections of the IIHF International Transfer Regulations. First, if a current NHL player is under contract with an NHL club then §3 of the Regulations, controls,[31] but if, the player is a free agent under the NHL CBA then §6. 3 is applicable.[32]

Under the first scenario, when a player is under contract with an NHL team, a special procedure known as a “loan” must occur. A loan can take the form of either a “limited or unlimited transfer.”[33] A limited transfer occurs when a player is currently under contract and desires to play in another league for a limited amount of time.[34] The length of the limited transfer is defined by the contract terms that are agreed to by all interested parties.[35] The interested parties would include the player, the current club, the acquiring club, the NHL and NHLPA. The NHL and NHLPA are considered parties because the NHL player’s contracts are governed by the CBA. Therefore, for a player to be transferred while under contract, multiple parties must agree to the terms.

Another type of loan is known as an unlimited transfer.[36] The major difference between a limited transfer and an unlimited transfer is the designated length of the transfer.[37] Unlike a limited transfer, the duration of an unlimited transfer is not a material aspect of the transfer and therefore, does not need to be included in the terms of the contract. If the duration of the transfer is not specified under an unlimited transfer the regulations state that, “the transfer will automatically terminate on June 30th for the Northern Hemisphere and August 31st for the Southern Hemisphere of the current season, returning the player to his former member national association on that date.”[38] Regardless of whether the loan is limited or unlimited, an important aspect of the regulation is that the player’s contract with the NHL does not terminate.

A third type of transfer that can occur between the NHL and the IIHF is a transfer of a free agent NHL player.[39] When this type of transfer occurs §6. 3 of the IIHF International Transfer Regulations governs. Section 6.3 specifically applies to the transfer of a free agent player of a non-member organization to an IIHF member league. Section 6.3 states that;

“A player of a non-member organization, without an IIHF transfer agreement, who wishes to join an IIHF member national association must apply for an ITC (international transfer card) from the member national association where his rights remained at the time he left to play with a non-member organization.”[40]

This type of transfer is remarkably straight forward since the player does not have an existing contract with a club. As a result, a player’s status under the CBA of the NHL makes a substantial difference when dealing with an international transfer.

IV.           Fourth Type of Transfer: NHL & KHL

The fourth and final category of player transfer is between the NHL and the KHL. The NHL and the KHL executed a Memorandum of Understanding that states each league will refrain from poaching players.[41] This Memorandum outlines the policies and procedures to allow for player transfers as well as standardized discipline for all disputed transfers. For more information regarding contested transfers, please see INTERNATIONAL TRANSFER DISPUTES IN ICE HOCKEY – PART 1: THREE KEY CASES

[1] 2012 IIHF International Transfer Regulations, (May 2011), available at http://www.nijb.nl/pdf/2012%20IIHF%20International%20Transfer%20Regulations.pdf

[2] Id.

[3] Memorandum of Understanding

[4] 2012 IIHF International Transfer Regulations

[5] Id.

[6] Id.

[7] Id at §206; “Players who wish to move from one country, irrespective of whether or not they are registered with the member national association of that country, to the member national association of another country are required to have a valid IIHF international transfer card (ITC). The ITC must be signed by the player, by the member national association of that country, by the new member national association and confirmed by the IIHF. The transfer becomes valid on the date it has been confirmed by the IIHF.”

[8] Id.

[9] 2012 IIHF International Transfer Regulations §5; §5.5 “The transfer of a player during the term of his contract will not be subject to any restrictive regulations, provided that an agreement is reached between all three parties concerned (the former club, the player, and the new club).”

[10] Id.

[11] Id at §6 Transfers with Non-Member Organizations

[12] Id.

[13] NHL will no longer pay transfer fees to European teams, (2008) http://sports.espn.go.com/nhl/news/story?id=3447121

[14] Player Transfer Agreement signed, (2007), http://www.iihf.com/home-of-hockey/news/news-singleview/recap/41.html?tx_ttnews%5BpS%5D=1183240800&tx_ttnews%5BpL%5D=2678399&tx_ttnews%5Barc%5D=1&tx_ttnews%5BbackPid%5D=187&cHash=d93edbeb2f

[15] Id.

[16] NHL will no longer pay transfer fees to European teams

[17] Id.

[18] Id.

[19] Sweden’s Elitserien, Switzerland’s National League A, Germany’s Deutsche Eishokey Liga, the Czech Republic’s Extraliga, Finland’s SM-Liiga, and Slovakia’s Slovak Extraliga,

[20] NHL will no longer pay transfer fees to European teams

[21] Id.

[22] Id.

[23] National Hockey League Collective Bargaining Agreement, (2004) available at http://origin.agilitycms.com/nhlpacom/PDF/nhl_nhlpa_2005_cba.pdf.

[24] Kate Zdroheski

[25] Id.

[26] New NHL contract, (2010) http://www.swehockey.se/Startsidesnyheter/2010/m/Nytt-NHL-avtal-klart/

[27] Id.

[28] National Hockey League Collective Bargaining Agreement Memorandum of Understanding (2013) available at http://cdn.agilitycms.com/nhlpacom/PDF/Summary-of-Terms-1-10-13.pdf

[29] NHL Players Overseas, (2012) http://www.tsn.ca/nhl/feature/?id=75388; the current number of players, under contract with an NHL team, playing overseas has reached 185 and is continuing to rise.

[30] Lockout Tracker, (2013) available at http://www.thefourthperiod.com/lockout_tracker.html

[31] 2012 IIHF International Transfer Regulations §3

[32] Id. at §6.3

[33] Id at §3

[34] Id.

[35] 2012 IIHF International Transfer Regulations §3.2; “The duration of a limited transfer shall be negotiated and agreed by the new club and the player and may be for any specified period of time. A limited transfer card must be for a period, which specifically corresponds with the duration of the new player contract.”

[36] Id. at §3

[37] Id at §3.2

[38] Id.

[39] 2012 IIHF International Transfer Regulations §6.3(2012). §6.3 goes on to state that, “When the new MNA and the home MNA are the same (the player is transferring back to his home MNA), then no ITC is required unless the player being transferred was or is a National Hockey League Approved by 2011 IIHF Annual Congress, Bratislava 11 (“NHL”) contracted player. If a NHL contracted player is transferring to his home MNA, then the new MNA must apply for an ITC from the MNA of the non-member organization (MNA where NHL club is located). If a NHL contracted player is transferring to a MNA other than his home MNA, then the new MNA must apply for an ITC from his home MNA and obtain a written approval from the MNA of the non-member organization (MNA where the NHL club is located) No written approval is required when the home MNA is USA Hockey or Hockey Canada. As a matter of clarification, any player who wishes to transfer from a non-member organization to an IIHF member national association will be subject to the IIHF Statutes & Bylaws and Regulations upon signature of the ITC Card. Thus, these regulations including any sanctions will apply to the transfer of such players.

[40] Id.

[41] Memorandum of Understanding

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