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FA draft is the key to making the game more competitive.
Here is the best way to make the game more competitive. Either make the FA draft the same order as the rookie draft, or give the top picks to teams with the lowest PB values, regardless of the previous seasons wins and losses. This will give an extra good player to the worst teams every year. Makes for a good balancer.
Contraction will only make the league more competitive for a couple of years, then teams will drift up or down accordingly.