Friday, 21 March 2014

A LADA Money Spent

Pictured to the left is Alexander Semin during his brief stint with Lada Togliatti of the Russian SuperLeague. Lada Togliatti had been a part of the Russian hockey scene since 1976 when they were founded as Torpedo Togliatti. Officially, they played their first exhibition game on August 31, 1976 against Dizelist Penza which ended in a 3-3 tie. Since their founding, Lada played in the Volgar Sports Palace which held a paltry 2908 fans since its opening in 1975. When the KHL came along as the next best thing to the NHL in 2008, a rink with 2908 seats simply wouldn't do in this magnificent, new league. A new arena was needed or Lada wasn't going to retain membership in the KHL.

Lada wasn't really in a position to build a state-of-the-art arena. While Lada had certainly a pile of amazing achievements on their side - rising from the Soviet League's Class A3 system to the Russian SuperLeague, becoming the first non-Moscow team to win the Russian SuperLeague in 1994, and becoming the first Russian team to win the IIHF Continental Cup in 2006 - they ran into financial problems in November of 2005 when sixteen players walked away from the team after not being paid. With Lada's regular season in jeopardy, they called up players from their second-tier team to finish the season. Needless to say, things in Lada were a little sketchy when it came to their financial situation. Hard to believe that just six months earlier in April, they had lost in the Russian SuperLeague Final to Dynamo Moscow.

In 2008, with their finances still in question, the KHL decided that the 2900-seat Volgar Sports Palace, seen below, simply wasn't up to KHL standards any longer, and the team was removed from the KHL. While the KHL will cite the arena as the main cause for concern, one shouldn't forget that this team basically teetered on the brink of insolvency each year in the KHL with the travel demands and the demand to attract and retain players to remain competitive.

Lada suspended their franchise after 2008 as they needed to get their finances on-track and find themselves a suitable arena if they hoped to return to Russia's premiere hockey circuit. Things began to look up when it was announced by Governor Konstantin Titov - the head of the region at that time - that a brand-new arena would replace the aging Volgar Sports Palace, and that construction on this new facility would begin in 2009 where the Volgar Sports Palace stood. It was an ambitious plan that Lada CEO Alexander Chebotarev envisioned to help his struggling club become the jewel of the Samara region once more.

Problems plagued the construction from the start in 2009. The original estimates for a new 10,000-seat arena came in at an estimated $35-40 million, but the design company and the region were stuck in a battle over costs and architectural plans. Costs sky-rocketed as the hired contractors and companies squabbled over costs and design with the region, and the dream of having this arena ready for 2010 or 2011 suddenly fell into limbo. Funding was provided for up to "52 million rubles" by the region for the continued construction of the facility.

The problem with that last statement is that 52 million rubles, in December 2009, would have been equivalent to approximately $1.73 million USD. One American dollar was worth approximately 30 Russian rubles at the time, so it became clear that this funding was nothing more than a ruse. Even if the region had promised 520 million rubles, they still would have only had half the money needed in the original estimate of $35-40 million!

The second issue was that the Volgar Sports Palace wasn't actually destroyed and replaced. The newly-named Lada Arena was actually built in the northwestern part of Togliatti. In other words, not only did the funding provided not meet the costs of the building, but there was considerable delay in getting green lights to build the arena in this new area.

With the Lada team still in self-imposed suspension, the team decided to play out of the newly-formed Supreme Hockey League in 2010 - the KHL's version of the AHL. The team aligned itself to be the reserve team for HC Yugra, and they took to the ice back at the Volgar Sports Palace once more as they tried to win a VHL championship, but they have yet to capture that accolade. The team finished dead-last in the VHL in 2010-11 with a record of 15-36-3-2 (W-L-OTW/SOW-OTL/SOL) for a mere 53 points, and did not qualify for the playoffs.

In 2011-12, Lada finished in seventh-place in the WHL Western Conference with a record of 18-22-5-8 for 72 points - a 19-point improvement from the inaugural VHL season. They qualified for the playoffs against second-seeded Dizel Penza, but Dizel Penza would win the best-of-five series by a 3-1 margin. While Lada's improvement signaled that they were on the rise once more, they still were playing in a substandard arena by KHL standards. In comparison, Donbass Donetsk, who joined the VHL at the start of the year, was promoted to the KHL after winning the Western Conference.

The 2012-13 season saw changes in the VHL as the top-sixteen teams would qualify for the playoffs and the conferences would be abandoned. Lada saw improvement once more as they finished ninth-overall with a record of 24-17-5-6 for 88 points. They actually were tied for seventh-overall with three other teams, but were dropped to the ninth-seed after tie-breakers were applied. Lada would play eighth-seeded Ermak Angarsk in the opening round, and they would defeat Ermak Angarsk 3-2 in the best-of-five series for their first VHL series win! They would meet third-seeded Toros Neftekamsk in the second-round, but Toros was too much as they downed Lada 4-1 in the best-of-seven series. Again, it was a season of improvements, and Lada had finally found solid financial footing after years of uncertainty thanks to their three years in the VHL. Things were definitely looking up.

On the arena front, things were moving slowly, but progress was being made. While the original idea was to have a 10,000-seat arena, that was scaled back to a more manageable plan of approximately 6500 seats, but additional amenities were added to the design. A practice rink was added for the team to skate on and host additional events with a seating capacity of 500 people. A parking garage with underground parking was added with a capacity for 1000 cars. A café with fifty dining room seats was added. Catwalks above the lower bowl were also added for fans to be able to view games. A press box capable of holding fifty reporters and a broadcast booth for up to five radio broadcasters and four TV broadcasters was also added. In short, the pipe dream was coming together.

Fantasy became reality this season as the doors to the new Lada Arena opened. 6112 fans - a capacity crowd - made their way into the new arena to watch Lada Togliatti play in their new home. Needless to say, it was a long time coming. Now you're probably asking how much this arena's final tally cost the people of the Samara region. It wasn't close to the $35-40 million estimate. Not even remotely near it. The final tally was more than double the price originally estimated - 2.6 billion rubles or approximately $87 million USD. However, I suspect that number is far too low considering all the delays and political in-fighting that happened. With conservative estimates, the arena's final cost probably ended up somewhere around $150 million after all was said and done. In any case, here's Lada Arena.

Looks pretty impressive, right? We had reported on The Hockey Show yesterday that the arena cost the people of Russia $2.6 billion, but I checked some Russian sites and it turns out that the figure was in rubles. I will take to Twitter and correct the information there as well as a few people commented on the cost of the arena. In any case, Lada Togliatti, with their new arena, will re-join the KHL next season.

Let's just hope that they can remain a viable business this time.

Until next time, keep your sticks on the ice!

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