Here are the steps and the thought process I went through in setting up my contract, hard salary cap league.
First I had to make a lot of decisions about what I wanted the league to be like and what I definitely wanted included. In my case I wanted:
1. Dynasty-like but I wanted more turnover than a true dynasty
2. I wanted closer parity between the offensive positions than most leagues have.
3. I wanted to use a lot more players in the starting lineup than most leagues use.
4. I wanted defensive players to not be an oversight, but I wanted the offensive players to be slightly more important... about a 60/40 split in total scoring between offense and non-offense players as a whole.
5. I wanted to use an auction primarily.
6. But I wanted to have a rookie draft using draft picks in an NFL style (that is, non-serpentine... last place picks first in every round).
7. I wanted to include some other positions especially if I thought they were something that skill could do a fair job of predicting... in my case, I added head coach and punter as fantasy positions.
8. I wanted more decision making on the part of owners than most leagues have.
So based on what I wanted to have, a lot of my decisions were made for me. Contracts and a hard cap fit well with both the slow turnover, use of an auction, and wanting more decision making, so I pretty quickly settled in on that.
Before I could do much more with contracts I had to finalize the starting lineup, roster size, and scoring system so I could see what the value of players would be. I went with min of 45, max of 55 players on the roster. 26 starters (1 QB, 2 RB, 1 flex QB/RB, 4 WR, 2 TE. 2 DT, 2 DE, 3 LB, 2 CB, 2 S, 1 coach, 1 punter, 1 kicker, 1 team kick return). I adjusted scoring systems in MFL and checked the results and used a VBD-style approach to see what player value for that season had been. Decided TE's needed more ppr than others and gave them 1.0 ppr, with WR getting .5 and RB .25. Bumped up the IDP scoring until overall I met my 60/40 ratio I wanted.
Now I have my scoring system and lineup, I was able to determine what the value of these players in an auction SHOULD be. Maurile Tremblay has a nice article on doing that, and the Draft Dominator can do it as well.
I realized the structure of the contracts and the salaries would be a big deal. A concern to focus on is the cost of a well-priced, high-performing player vs the cost of a minimum salary player who turns out to be a stud. If your minimum salary is $1 and your stud costs $4000 and an average player costs $40, then the $1 stud is a bigger impact on the league than a league where your stud costs $100 and your minimum player costs $1 and your average player costs $10.
So using my values, I started playing with different minimum salaries and team cap room. I decided to go with $1 as the minimum salary and adjusted the cap room from there. I liked what I saw when I used a team cap room of $500, which gave an average salary of $10 per player, and using VBD values would have the studs be worth about $100.
And I also needed a mechanism that would over time help keep salaries somewhere in the realm of what the player was performing at, and how I was going to do that had to be decided in conjunction with the above cap decision. In my case, I considered using a "salary increases every year by some %" method but rejected it in favor of a system that would make the owners use decision making to apply the increases in exchange for additional contract years. I went with a base 3 year contract... after year 2, the owner can give a 1 or 2 year contract extension but it carries with it a raise. So you get 2 years with a player at his acquired price and then have to decide if he's worth paying more in his 3rd year plus his added 4th and/or 5th extended years, or whether to keep him on the cheap in year 3 and then maybe lose him in free agency. I also added Franchise and Transition tags that can be placed on a player when his contract is up which get him paid as a top player at his position. With Tags and the extensions, someone could conceivably keep a player his whole career using these if he's willing to keep shelling out the raises to extend or tag the player.
I decided I didn't want salary cap penalties. On one hand, for a league with 660 players on rosters, that's a lot to keep track of, and second was I wanted a lot of activity, trades, waivers, etc. So I didn't want to add a feature which would limit them without really good reason. This is also why I have it so when a player hits waivers his contract is terminated and whatever salary he's acquired at is his new salary. Teams will cut good players mid season if they are vastly overpriced.
For waivers I went with blind bidding waivers with your bid having to fall under you cap when you take into account whoever you'll cut in the waiver move. The rookie draft requires setting of a base salary. After playing with the numbers I already came up with in setting the cap, I decided if I took the average salary of the bottom half of fantasy starters, that would give a 1st round player salary at each position that I liked, for the most part. I.e. we start 24 RBs (2 per 12 teams), so the average salaries of the 3th to 24th highest paid RBs is the 1st round rookie RB salary. There are also minimums for the positions where most players are just a couple of dollars like IDPs. I decided not to have the 1.1 pick have a higher salary than the 1.5 pick, for example, mostly because I wanted to encourage a lot of rookie pick trades. Salaries then drop off by 1/3 each round and are the minimum in round 4.
I know that is a lot to read through, but I'd really recommend that you use some sort of approach similar to mine for determining the cap number. Don't just pick a number. Decide your scoring and lineup and then determine player value and use that to actually make some spreadsheets of what players would cost in different systems until you find one that your league likes.
Decide what features you'd like to see in the league and then design your contracts to fit them. If you'd like to see my league's rules, you can find them here:
http://football3.myfantasyleague.com/2008/...=24223&O=26
Hope some of that is of use. I got a lot of good input from FBG Bob Henry who shared with me his league's rules and how they had worked out for his league, so hope I can give something back.
