New Rules for Teams in Financial Trouble

[HFNHL Commish]

Gents,

As has been alluded to on the boards recently, new rules for teams in financial trouble were enacted during the regular season, but were never formally publicized due to my own oversight. Mea culpa.

Starting now, GMs that have cash balances (real or projected per the Finance page) below $3M are required to assess the cash effect of every trade submitted. This is as simple as submitting the salaries of the players traded, the salaries of the players acquired, and calculating the difference. The DoPP's office will then have full authority to use this information in determining whether or not to approve a trade. For anything that truly raises a red flag in the DoPP's office, those trades may be forwarded to me at the DoPP's discretion.

This should stop a lot of teams from ever coming REALLY close to insolvency. However, should a team become insolvent, we are now adopting our own version of Chapter 11 reorganization...

For any team entering insolvency during the season, barring exceptional circumstances (read: if the Commissioner's Office really, really feels the need to swing the axe), penalties will be forestalled until the end of the season. GMs in insolvency will have to report to a "parole board" to discuss plans to get out of insolvency by the end of the playoffs. Refunds of endorsement fees can be discussed as part of these plans, as can payouts of endorsements already achieved. In addition, so long as immediate steps are taken to improve a team's cash situation, the parole board may hear a GM's argument to keep endorsements in place that can be "projectably achieved". The point is that the league is willing to work with the GM, but the onus is on the GM to develop and execute a plan of action.

I will freely admit that this is a change in policy for the league. However, with finances continuing to be a hot-button issue, and teams increasingly reliant on endorsement money, I think it makes for better policy for the league to work with teams during the season to avert problems at the end of the season.

Respectfully submitted,

Matt Gledhill
HFNHL Commissioner

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[Dryden]

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[Default101]

I like this, and am glad the league is taking such a strong and intelligent route to deal with this.

My first 2 years in HFNHL I was trapped down under 3M and slowly progressed up to about 8M. I was one of these teams for a long time, and I will give some hints to new GM's, or GM's trapped in this kind of situation.

#1 - No big free ageent signings!: This year was the first time i've signed someone to a big contract, 4.4M was the price I put forward to get Scott Hannan. That is the biggest acquisition i've made over that time, and didn't make it before I had enough cash, before that I set my own cap, at a very low number and would offer guys up at bargains. Someone ALWAYS falls through the cracks. Two years ago it was Dwayne Roloson at 2.3M Last year it was Darcy Tucker at 1.5M. These guys aren't superstars but they will make your team respectable and add some talent.

#2 - Trade some assets for cash. I've made several deals that did end up leaning towards the opposing GM, but to even up the field cash was added to the deal. The league has several well off GM's that if you explain your situation can afford to give up a little cash here and there. If you're smart with your Payroll a little cash here and there can go a long way.

#3 - Consider Rebuilding: If you have a bunch of big contracts and you'll need to add and add to become a contender, consider shutting it down and rebuild. I didn't have much of a choice but i'm thankful that was my situation becasue it made it a lot easier to take this route. I know some people worry that they don't have as much info about prospects as others, but when you're rebuilding, anyone can read up on a little information here and there, compare rankings and make a semi-educated choice in who to pick, especially in the top 10, also bring in guys who could soon be ready to recieve entry level contracts. I've had some good young players like Phil Kessel, Keith Yandle and Steve Mason at a combined price of 2.55M that kept me competitive and saved a lot of cash.

I've gone from 3M to just over 33.5M in my finances using these 3 things. It is a bit of a trying route, but when you're involved in a league as great as this just try to enjoy it, and stay active with ideas of rebuilding your team.

 

[MatthewFlames]

I will give some hints to new GM's, or GM's trapped in this kind of situation.

Excellent post Ryan - with some very important advice.

For those who were dealing with the Flames at the deadline know that I was operating under these rules last year and it really worked.

In addition I've been talking to Nick our new OTT GM, and have talked a lot with Jon in CAR about all these financial issues and have passed on my advice and if anyone wants any advice track me or Ryan down.

 

[Ohio Jones]

The Blue Jackets were also operating under these constraints towards the end of last year, after years of (admittedly) somewhat reckless FA spending and declining revenues (despite a fairly good team on paper).

I can attest that they are both reasonable and easy to work with, as long as you have your club's long-term health at heart. I made a series of moves designed to get my costs under $50 million last season, and to position my team for predictable cost certainty going forward. In the process I managed to win the Central Division title and lose out in the second round to a similarly-challenged Flames squad.

I'm now sitting with the most money I've had in my bank account in years (a respectable $19 milion) thanks to these cost management initiatives, some decent playoff gates and endorsements. This from a low of under $2 million at one point this season. I know next year will still be challenging, so I'll monitor things closely, but I encourage any team facing financial challenges to engage the assistance of the admin team and those GMs who have gone through this process. Tough decisions may be required, but it's infinitely preferable to having to step down from your team.

 

[MatthewFlames]

I'm now sitting with the most money I've had in my bank account in years (a respectable $19 milion) thanks to these cost management initiatives, some decent playoff gates and endorsements.

Yes, three teams, yours mine and Brocks all got out of some financial troubles last season which is really good to see for the health of the league. Also the Sharks have a reasonable cash balance now and with continued management should be in the healthy category soon. There are still a couple franchises where things don't look rosy but these rules will help.

 

[PasiK]

Yes, three teams, yours mine and Brocks all got out of some financial troubles last season which is really good to see for the health of the league. Also the Sharks have a reasonable cash balance now and with continued management should be in the healthy category soon. There are still a couple franchises where things don't look rosy but these rules will help.

13.6mil at the moment, I was going to keep payroll in about 45mil level in next season, but probably will be closer to 50mil.

I want to fight to playoffs

but two years struggling with salaries have teached something