As you are all aware, and has been discussed many times, both the leagues financial structure and the overall team competitiveness imbalance is an as much a crisis in the HFNHL as it is in the NHL. Unfortunately it does not appear that the NHL is going to resolve itâ€™s issues soon and as such the Admin team has been reviewing options. Please understand that these changes while great news for some teams are going to be a challenge for others and we respect those differences. Our objectives/criteria in evaluating options were threefold: (i) Control Costs (ii) Increase parity in the league (iii) Ensure any new system does not become administratively burdensome Many creative options were unfortunately passed on due to administrative constraints. While this represents the planned approach there are a couple of caveats. (i) When, or if, the NHL finally sorts itâ€™s mess out we will examine it and consider changes but only if it makes sense and is administratively feasible (ii) As noted later on, we are looking at a sim add-on that may make cap monitoring easier to manage and will update everyone if required. (iii) The approach below has some recognized loopholes. The league will monitor activity and if it is determined that certain loopholes are being overly exploited we may make amendments to close them in the future. Anyway, without further adieu, here are the planned 2005-06 HFNHL changes. 1. Entry Draft Having an Entry Draft will be contingent on a satisfactory level of information being available (TBD). Worse case scenario is that 2005 picks will become 2006 so that teams that traded picks will not get shorted. 2. Salary Rollback of 25% This would only apply to players currently under contract or are being signed to a contract that applies to the 2004/05 seasons. Anyone resigning RFA's and UFA's for next season will be negotiating in a post-rollback environment (i.e. minimum qualifying offers for 2005/06 season will be based on 75% of current contract plus 10% where required.) 3. Salary Cap Soft cap at $40M going to a hard cap at $45.0M with a 100% luxury tax in between. The Tax money would be allocated as such: 60% to the 5 lowest revenue teams 30% to next 5 lowest revenue teams 10% for teams 11-15 Teams that do not meet an avg 70OV minimum will not be eligible to share in any luxury tax allocation. As the Sim does not accurately capture avg game expenses during the season (it only shows current game expenses) the following method will be used to calculate cap adherence. (i) There will be three check points, start of season, game 30-35, and the trade deadline but there are no penalties attached to any single checkpoint. (ii) Team payroll will be recorded at each check point on a spreadsheet and weighted average of the three will be used to determine luxury tax and annual excess of hard cap (plus applicable penalties) at season end. (iii) To avoid timing issues related to injuries impacting pro payroll and possibly close the gap with regards to teams hiding players on their farm team we will calculate payroll at these points as such - Top 21 OV players at 100% of salary (excluding 'dummy' types) regardless of whether they are on the farm or pro team, and all others at 10%. If there is a tie of multiple players with an equal OV for the 21st position the highest salary player will be used. Added March 11th: Maximum signing bonuses are being reduced from 50% of base salary to 25% (life of contract) and 50% of the signing bonus will be applied against the cap in year 1. These bonuses are applied against the entire year and are not transferred from a cap perspective if the player is traded during the year. One exclusion will be prospecting type signings defined as the signing of a player that has played less than 25 NHL games. Note: We are looking into a SIM add-on that may do this monitoring more efficiently and will update if there is any applicable change to the above. Penalties for being over the hard cap, in addition to the luxury tax, would be the forfeit of draft picks based on amount by which a team has exceeded the hard cap. These penalties are necessarily stiff to discourage teams from turning the hard cap into a soft cap. <$500k 4th round pick $500k - $1M 3rd round pick $1M - $1.5M 2nd round pick $1.5M+ 1st round pick *All picks will be the earliest available 4. Revenue Revenue will be turned up one notch. That should raise the average revenue to approximately $33-$34M plus endorsements. This would still leave a gap that would challenge teams to manage their budgets. While the average is up there will be a big gap in revenues between the top end and low end teams. I think even under the $28M average revenues range anywhere from $20M to $38M depending on team performance. Hopefully the cap will increase competition and parity and thereby shrink these huge revenue spreads. 5. One time dispersal draft Just prior to the 2005-06 waiver draft a dispersal draft will need to be held where teams still over the $45.0M will have to `release' players to get under the cap. I suspect this will only impact 3 or 4 teams and even then there is sufficient advance warning to make the necessary trades.