Lada Togliatti and Yugra Khanty Mansiysk of Russia are the two victims of the cost-cutting drive by the KHL, Europe’s most popular ice hockey league which contains primarily Russian teams, meaning the league will now consist of 25 teams for the 2018-2019 season.

The decision was made at a meeting in Moscow and is part of the long-term plan introduced by the KHL last year to increase the commercial potential of the league.

Following an assessment of the performance of its teams, the KHL drew up a three-team list of potential teams to be cut - Lada Togliatti and Yugra Khanty Mansiysk and Severstal Cherepovets - after they all ranked poorly when assessed by a ratings system.

Lada Togliatti and Yugra Khanty Mansiysk were chosen after the league claimed Severstal Cherepovets’ poor rating was mitigated by the impressive progress they had made over the course of last season, where they finished eighth in the Western Conference, meaning they qualified for the playoffs for the first time in five seasons.

Severstal Cherepovets also saw an increase in attendances during the last campaign whilst the KHL also pointed out that they do not rely on state funding and are punctual in paying the salaries of their players.

Lada Togliatti and Yugra Khanty Mansiysk, on the other hand, were deemed to be overreliant on state funding with figures of 82 per cent and 70 per cent respectively.

KHL also claimed the two teams do not attract strong enough television ratings to justify their place in the league whilst their low budget for players’ wages makes them uncompetitive in the market.

Lada Togliatti and Yugra Khanty Mansiysk are unlikely to be the last teams to be removed from the league as KHL are said to be aiming for a maximum 24 teams in the league.

"Let me remind everyone that the goal of our strategy is to raise the sporting quality of the clubs, reduce the share of their state funding, and increase the commercial potential of the league," KHL President Dmitry Chernyshenko said. 

"The highest share of state financing of any clubs in the league were to be found at Lada Togliatti and Yugra Khanty Mansiysk, and both these clubs aroused little or no TV demand.

"The budgets for players will not make either team competitive.

"We expect that the state funds which were spent on these outsider clubs will now, under the control of the Russian Hockey Federation, be directed to children's and junior sports, and the construction of new rinks to help nurture new talent - young players who will grow up into high achievers in the sport."

KHL have also announced that they will be lowering their salary cap in another cost-cutting measure and have decided that the ceiling for the 2020-2021 season will be 900 million Russian rubles (£11 million/$16 million/€13 million) with no exceptions being made for star players.

This new limit will be phased in gradually with a "soft"cap being used for the next two seasons.

Under this system, clubs may exceed the given limit if they pay a luxury tax amount of 20 per cent of the sum by which the club exceeds the limit.

The cap will fall to 850 million rubles (£10.5 million /$15 million/€12 million) for the 2019-2020 season and then further reduced to 800 million rubles (£10 million/$14 million/€11 million) for the following season with the luxury tax increased to 30 per cent.