[FleetWalker]

The final piece of the league creation puzzle is the most difficult: the economics.

First there is no draft in my leagues, players get generated as free agents and than sign contracts with whomever. There are no international discoveries, international free agents, independent league free agents. All the world's baseball players begin in one the leagues that exists in the game. All players generated are between 14 and 22.

I limited contracts to 5 years, although extensions are allowed. Trades are also allowed between leagues...I'm not sure about that one. I wish OOTP allowed you to replace trades with the transfer system used in a lot of international sports or allowed you to specify that only cash trades were allowed, which from a game play standpoint is approximately the same thing.

The end result is that no player seems to stay with a team or even league for more than a few years. I'm sure it resembles baseball before the reserve clause, and what association football fans experience, but wow, don't get attached.

As for the salary structure:

A league creator can control four team revenue streams

1. Gate revenue
For the average team, this will be 1/2 * avg attendance * ticket price (note that the gate split is irrelevant for this calculation, what the average team loses in home games it gets back in away games). I fixed ticket prices for each league. I also made sure each team had the same stadium size. Thus, teams can mostly control attendance by winning and/or being otherwise popular (although market size is a factor).

2. National Media Contract
This can either be the same for each team or can vary by market size. I'm unclear why, when homebrewing a league, you would ever let it vary. I assume that local media contracts vary by market size, so allowing the national media contract to vary by market size just makes it a second local media contract. Anyway, I made it fixed for each team. That makes it the minimum expected revenue for each team.

3. Local Media Contract
I assume this always varies by market size. From a league design standpoint, it would make sense to make this 0 because teams don't have any ability to control this revenue stream and that seems unfair. But eliminating it does reduce realism. In the base setup 55% of media revenue is local, but I changed that to 25%. For purposes of verisimilitude that percentage increases as you go down the promotion-relegation ladder because realistically there just aren't going to be significant national media contracts for lower tier leagues.

4. Merchandising
I honestly don't know what effects this. No doubt market size, but maybe also success. Anyway, I didn't have a good theory for setting this so I set it to 10% of total media revenue. It's much higher in the base game, but it seemed like something over which teams have little control.

5. Playoff Revenue & Cash Trades
I think these are the only other two sources of revenue for a team. Neither is something you can adjust, although I assume ticket price is a factor in playoff revenue. Playoff revenue can be a big deal, but since it rewards success on the field that's fine. Teams obviously have complete control over cash trades (assuming there is a willing counter-party), so that's fine too.

Aside: It seems like most of a team's revenue sources in the game are determined by things over which a team (in the game) has little control. You can't set an advertising budget, improve your stadium, run promotions, negotiate media contracts, negotiate concession contracts, relocate the team to a bigger market, the list goes on. The economic model for revenue is simplistic, but even worse it isn't really determined by things the player can impact. It needs a serious revamp.

I figured the average team's revenue would be Gate + Media + Merchandising. I adjusted these number by three factors:
1. The BBQUAL of the league (each league quality level below 5 reduced revenue)
2 The level of the league (each tier below the top in the promotion-relegation pyramid reduced revenue)
3. The economy of the host country of the league. This was for verisimilitude. I compared the Per Capital GDP of the host to Per Capital US GDP and used that to reduce revenue (although there are countries like Singapore where this factor would increase revenue, none of them ended up hosting a league in my game).

Once I had this average revenue, I assumed it would be enough to pay for a team of average players. Since roster size in my leagues was 26, I divided it by 26. That was the salary of an average player. The other salaries are just multiples of the average salary. Whether or not this is what the game designers intended, it seems basically how the default game is set up. I think they used average revenue / 24 or something, but it's pretty close to what I came up with.

Cash Max (5%), Player Development (3%), and Scouting (2%) are just percentages of average revenue.

In my test runs, these formula seem to work decently. Better players move to higher-tier better-playing leagues. If you generated a list of the best players, they were almost all playing in the first or second tier league in the US or possibly in Japan or Canada. It may turn out after playing longer that I ditch the whole system, but now I'm happy enough.

So that's it. I thought the process might help someone else in their thinking about how to set up a world like this.