I think that, in a newly created league, you should be allowed to renegotiate contracts. I understand that, the first year of a new contract can't be renegotiated... and that's fine. But this is a new league. It should be assumed that these players have been under contract for a while.. you know, a guy with 9 years in the league has been under contract before.

I hate seeing an 11 year veteran, who is on the downside of his career, with a very large, long term deal.

I would like to suggest 2 alternatives.

1) Put players on a roster with no contract. Let the owner of the team dish out contracts. The players do not have to accept these contracts. If they are not under contract at the start of the regular season, they become free agents. If there is no human owner, the AI then gives them all contracts.
2) This would require all teams to have an owner to start... All players are free agents and give 6 FA sims for teams to vie for the free agents and build their team.
2a) Another version could be you start from the beginning of the season, as though the season just ended, with all players being free agents. Then go through FA and the draft, etc. The first draft order would have to be randomly determined and serpentine as well.