Waivers

History
In 2012-13, the Conn Smythe Corner utilized a free-agent acquisition system where all players dropped went directly to free agency after clearing waivers. Teams were free to pick up players at any time, and as many times as they wanted.

In 2013-14, the League adopted a FAAB (free-agent acquisition budget)-based waiver system, eliminating free agency in order to even the playing field by giving all clubs an equal opportunity to acquire any player made available through the use of waivers. The cap was set to $64,300,000 to mimic the NHL's real-life salary cap. Minimum bids on players were set to $500,000. Waivers processed on Monday, Wednesday, and Friday. In order to limit the influence of waiver pickups on the outcome of a given matchup, no waiver claims were to be processed on Saturday and Sunday - the last two playing days of a head-to-head matchup.

In 2014-15, the FAAB-based waiver system was modified to include waiver processing on all weekdays with the continued exception of Saturday and Sunday.

In 2015-16 the FAAB-based waiver system underwent significant changes. Using data from the 2013 and 2014 seasons, a soft-cap upper limit of $42,000,000 was set along with a hard-cap upper limit of $52,000,000. Incremental bids were introduced, requiring general managers to increase their bids by $50,000 at a time.

Soft and Hard Cap
The salary cap can be subdivided into two sections: the soft cap, and the hard cap.

The Soft Cap refers to the season-specific budget set at the start of the season that all GMs may use freely. GMs may trade for additional soft cap dollars at any time from other teams to replenish their soft cap.

The Hard Cap refers to the margin of allowance from the following year's cap. GMs may spend money directly from the next season's cap in the event they no longer have any soft cap space. GMs are allowed to borrow up to a predetermined amount for use in the existing season. In 2015-2016, the margin of allowance was set to $10 million, meaning teams were free to use up to $10 million from the following season's cap in the event they had $0 in soft cap space remaining. Hard cap space is not renewable, meaning that once dollars are spent from the margin of allowance, they are charged to the following season's cap. Because trading of future cap space is not possible, teams cannot "make up" whatever they spend from the following season's cap in the current season. Once the offseason begins, teams are able to trade money from the following season's cap, but not until that point.

Waiver Cap Formula
For Year x (2016 and beyond): Year x-3 spent * 0.20 + Year x-2 spent * 0.3 + Year x-1 spent * 0.5 wherein the previous year (x-1) is weighted at 0.50 (50%), x-2 is weighted 0.30 (30%) and x-3 is weighted 0.20 (20%) - this arrangement follows so that x-2 is always weighted at 60% of the remaining combined Year 1+2 weight (totalling 0.50).

2015-16 Waiver Cap
Because only two years of data are available, as a special one-time case, the salary cap for 2015 has been computed as such using all available data:

Note: It has been decided that the soft cap upper limit will be $42,000,000 in 2015 to account for the draft date being two weeks before the start of the season.

Note: 25% * $42,000,000 = $10,500,000. However, the margin of allowance will be rounded down to the closest million in computing the hard cap limit.

Discussion
Because of the ample amount of average space left per season (between 35% and 40%) of the cap in 2013 and 2014, the value of our spending currency has not been very high in The League. This new waiver cap formula aims to re-establish the value of the league’s cap currency to account for actual spending patterns.

A salary cap of $52,000,000 would allow for a maximum of approximately 104 minimum-wage bids and, using the actual average amount spent per move over the past two years of ~$1,300,000, 40 moves.

40 moves is 10 moves above the average number of moves from the past two seasons, allowing some degree of flexibility afforded by the margin of allowance.

Using $1,300,000 as the approximate actual average amount spent per move over the past two years, a soft salary cap set to the amount of $42,000,000 for use in the last season (2014) would have resulted in up to 32 moves, 2 above the average from the past two seasons combined, leaving $400,000 in cap space.

GMs who are willing to spend some of their margin of allowance will have to weigh the tradeoff between spending in the current season and taking away flexibility from their following season. A scenario where a team is “all in” (read: Atlanta Thrashers) and spends to the upper hard cap limit is entirely possible provided that team is prioritizing short-term performance. It wouldn’t make much sense for teams out of the postseason to break the soft cap limit by any significant amount, on the flipside.

The net effect of this could reduce the average amount of cap remaining from ~35% to less than ~25% of the hard cap limit.

The salary cap was originally conceived to allow for a maximum of ~129 minimum-wage moves per season. The change this salary cap formulation will have on the league may is subtle but significant in that it will not limit GMs from making a lot of moves, but it will boost the value of the waiver budget, which had acquired a lower-than-ideal worth over the past two seasons according to the amount of cap space remaining every year.

As a result, we may observe new spending habits, which will always be reflected in every season’s cap thanks to the floating, weighted nature of the formula.