It really seems like the development budget in 12 is really more instructional leagues, minor league spring training, and roving instructors. Whereas I agree with LGO on the concept, it seems like Markus uses it to counter too much money. It sounds as though the effect is small. However, from a purely game balance view I welcome this budgets sometimes increase too fast meaning teams can afford more draft bonuses than they should be able. The market aspect of free agents helps to even things out in that area.
Although, the cost of the minors leagues could and maybe should be modeled. All minor league players have contracts and some are the not minimum for their level, I think it kind of comes out in the wash. In today's baseball the only difference in affiliates comes with the lowest minors. Some have a combination of 3 Short A and below teams and some have 2. So putting the cost of minors and the differences is pretty minimal for the modern game considering the difference is really if teams have a GCL/AZ team which should be minimal. However from a historical viewpoint, I can see how what LGO is saying is would be grand. Historically, the Branch Rickey method was only open to teams who had the funds to buy out and run those minor league clubs.
In the modern game minor league costs to the parent club are actually the salaries of the minor league players. So yes the number of minors affects this but it seems more like having minor league contracts actually cost you something is more in order than player development being linked to the number of clubs. Right now the game balances this out. The club does not receive its portion of ticket sales nor does it pay the salaries of minor players.
Revenue is problematic as well. Minor league teams are their own brand and there is a pretty big disparity in minor league club revenues.
HowStuffWorks "How Minor League Baseball Teams Work" "Despite the positive trends of the past decade or so, not all minor league clubs enjoy the degree of success of Buffalo, Indianapolis, Louisville and Durham clubs; around 25 percent of the clubs still draw fewer than 1,000 fans per game. Only time will tell if minor league baseball's roller-coaster ride of the past century will continue. " To note Buffalo has something like a 10,000 capicity and sells around 460,000 tickets are year. Over 140 games that averages over 3,000 a game.
The same sight breaks down a high level cost split. "Major business expenses include rental of the ballpark (owned and maintained by the city), player-related expenses, payroll for around 100 employees (office, promotional, field, parking staff) on any given game day, National Association of Professional Baseball Leagues dues, and ticket taxes. The Devil Rays negotiate and pay player salaries, and the Durham Bulls participate with them in paying for bats, balls, equipment and uniforms. Since umpires must remain neutral, the National Association of Professional Baseball Leagues trains, assigns and pays umpires."
A very small tidbit on revenue split between parent and affiliate.
Minors extend agreement through 2020 | MiLB.com News | The Official Site of Minor League Baseball
"The only change of any real substance in the new PBA is that the NAPBL has committed to a slight increase in the tax on ticket revenue that Minor League teams pay to Major League Baseball. O'Conner emphasized that the increase will be incremental, "escalating in a fair and equitable way, not so precipitous as to be painful." "
So in essence minor league clubs add revenue and cost to the parent. The main cost the parent pays are players and it looks like coaches. Beyond that there is not much minor league cost. The cost is tied to the amount of players which is tied to the number of clubs. So the player development budget has really little to do with this. A better model would just be minor league contracts that cost something and teams receive minor league revenue. Again, I think the current model is ok here because minor league revenues and cost are omitted. It is inaccurate in that in most cases the share of ticket sales will not cover the cost of player salaries but I am not sure if the difference is significant for most teams. Sure the GCL and AZL have no tickets sales but how much are you paying these guys beyond bonuses? Probably not much.
If we want cost of the minors we should have revenue. It could make a interesting future model if minor league contracts actually expire and teams negotiate new contracts. You might have to fight for a team like Durham while say the SWB Yankees might a little less attractive. You find some minor league teams like Reno that sold for $7 million and some not so great A clubs that sold for over a million while others struggle to get 1,000 fans in for a game. In some cases, the quality of minor leaguers is a factor in some cases it is good branding by the minor league club. So the revenue might get complicated.
Bringing this back to player development, this budget would really be for roving instructors and instructional leagues. Other than player salaries the day to day cost of minor league teams seems to be borne by the minor. The development cost are directly related to players and administration. We are not talking about stadium cost or cost of uniforms or anything with day to day operations here just the players and support staff for players maybe some travel expenses for promotions and demotions.