(i) The Upper and Lower Limits of the Team Payroll Range shall be determined in accordance with the following formula:
Preliminary HRR for the prior League Year multiplied by [x] the Applicable Percentage (as defined in Section 50.4(b) of this Agreement), minus [-] Preliminary Benefits, divided [/] by the number of Clubs then playing in the NHL (e.g., 30), shall equal [=] the Midpoint of the Payroll Range, which shall be adjusted upward by a factor of five (5) percent in each League Year (yielding the Adjusted Midpoint) until League-wide Actual HRR equals or exceeds $2.1 billion, at which point the five (5) percent growth factor shall continue unless or until either party to this Agreement proposes a different growth factor based on actual revenue experience and/or projections, in which case the parties shall discuss and agree upon a new factor. If a significant (i.e., $20 million or more) one-time increase or decrease to League-wide revenues (e.g., by reason of the addition or loss of a national television contract or the scheduled opening of one or more new arenas which is expected to result in a significant increase in League-wide revenues) is anticipated in the next League Year, the parties will endeavor to estimate the expected increase or decrease and incorporate that estimate into the above-stated formula for calculating the Adjusted Midpoint.
After adjustment for the revenue growth factor, the Payroll Range shall be constructed by adding $8 million to the Adjusted Midpoint to establish the Upper Limit, and subtracting $8 million from the "Adjusted Midpoint" to establish the Lower Limit.
(ii) Notwithstanding paragraph (b)(i) above, in the 2005-06 League Year only, the Lower Limit of the Range shall be $21.5 million and the Upper Limit of the Range shall be $39.0 million.
(iii) For the 2006-07 League Year, and each subsequent League Year, the Lower Limit and the Upper Limit of the Range shall be calculated by the Independent Accountants no later than June 30 of the immediately preceding League Year, using Preliminary HRR and Preliminary Benefits, which shall be based upon the Initial HRR Report for the immediately preceding League Year.
(iv) In each League Year, the Lower and Upper Limit calculations set forth in paragraph (b)(iii) above shall be subject to adjustment upon the Independent Accountants' issuance of the Final HRR Report for the immediately preceding League Year, which Report shall set forth the Actual HRR and Benefits figures. If, as a result of re-calculating the Payroll Range by using the Actual HRR and Benefits figures set forth in the Final HRR Report –rather than Preliminary HRR and Preliminary Benefits figures used to calculate the Range in paragraph (b)(i) above –the Adjusted Midpoint of the Range would be either increased or decreased by $3 million or more in either direction, then the Payroll Range for such League Year shall be adjusted accordingly, effective as of the first day of the NHL Regular Season, based on the figures set forth in the Final HRR Report. The NHLPA, upon further consultation with the NHL, may elect to reduce the threshold for adjusting the Payroll Range in the manner set forth in this paragraph for future League Years to an amount lower than $3 million. Illustration: Assume that the Initial HRR Report for Year 2 calculates Preliminary HRR for Year 2 to be $1.9 billion, and Preliminary Benefits to be $66 million. Calculating the Range for Year 3 would occur on or before the June 30 immediately preceding Year 3 as follows:
The Midpoint is (54% of $1.9 billion) - $66 million
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30 Clubs in the NHL
($1.026 billion - $66 million) / 30 = $960 million / 30 = $32.0 million
The Adjusted Midpoint is calculated by increasing $32.0 million by five (5)
percent, to $33.6 million.