OOTP5 Financial FAQ Part 2a - Team Finances Year By Year
Allright, here's part 2 of the financial FAQ. I think some of the OOTP veterans will find a lot of this to be common sense and or telling them what they already know. Others will have their own systems in place that accomplishes the same thing, but hopefully there's something in here for everyone. Comments, criticisms, debates, and any other comments from the peanut gallery are welcome and encouraged.
Find Part One here:
http://www.ootpdevelopments.com/boar...threadid=27941
Disclaimer: I am not affiliated with Out of the park Developments in any way, nor was I a beta tester for v5. I guess I could be fairly described as a "fanboy"
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With the introduction of arbitration and higher minimum salaries into OOTP5, budgeting your payroll and maintaining positive cash flow have now become more of a challenge. To help those that might be overwhelmed by the new system, or completely new to the game, I have attempted to put a rough guide on managing your team's finances in OOTP5 on a yearly basis.
League Specs: Coaches/Scouts-off, Salary Cap-no, Team Cash Max - $20 million
NOTES: I haven't played with coaches or scouts since OOTP3, preferring the challenge of not beinga ble to stockpile brilliant coaches, and so that every team's prospects have an equal chance of developing. I prefer a cash maximum of no lower than $20 million so that AI teams have the resources to budget wisely in the free agent market, and rarely does a top player go unsigned.
Team Specs: Average Market/Average Loyalty, Fan Interest-55, Last Year's Revenue - $70 million, This Year's Payroll - $72 million, Cash - $7 million
A quick glance at the finances of our mid-level mid-market team show us that we're right about on budget. We might lose a little money this season, but it won't deplete our entire cash reserves. If the $72 million has been spent wisely we might have a successful season, earning a playoff berth and a boost in revenues, so that we could break even or make a small profit. However, we're going to be concentrating more on decisions that affect future seasons, rather than the present season, although issues concerning the present season will come into play. While a successful GM will monitor his team constantly looking for ways to improve via unsigned free agents, trades, and callups, they will also begin planning for the following season (and seasons beyond) not long after the umpire has cried "play ball" on opening day.
APRIL
Most players won't want to begin negotiating extensions until May, so although we can see which players' contracts expire at the end of the season, there's not much point in trying to make any offers yet. Spend April evaluating the talent that will be due for an extension or arbitration and get a general idea on which players you'd like to keep around, and who you'll cut loose.
MAY
On May 1st, players will begin listening to offers. Although you may prefer to wait until later in the season to sign players to extensions, now is the time to begin planning how to handle your players who's contracts are expiring or going to arbitration at the end of tthe season. To see who is eligible for what, go to the main Team Roster screen and select 'Salary Info' from the drop down menu. Click on the Years Left column twice and it will sort by remaining contract years and group all of the 1 YR's at the top. A player with one year left on his current contract will have one of three notations next to 1 YR:
Auto Res - Players salary will be automatically renewed for the $300,000 minimum.
Arbitr - Player is eligible for arbitration, if the player is not released at the end of the season or signed to a multi-year extension, he will be signed to a one year contract with the amount determined by OOTP's arbiter, NO MATTER WHAT. Even if you have no cash, or negative cash, and $0 available for extensions or free agents, a player eligible for arbitration will be assigned a salary that is added to your payroll. You will not lose a player eligible for arbitration because you cannot afford his new contract. The only way you will not retain a player eligible for arbitration is if you release him at the end of the current season.
FA - player is eligible for free agency and must be signed to an extension if you wish to retain his services.
We don't have to worry about players who's contracts are due to be automatically renewed. They'll be back next season at their same $300,000 salary, unless for some reason you think they aren't even worth that much money, you could release them at the end of the season with no financial penalty. That leaves us with the players eligible for arbitration or free agency. Make a list of these players, and their current salaries.
SP J. Crane (25, 9/8/8/9) - 10,500,000/FA
SP B. Kosecki (34, 6/7/6/6) - 4,700,000/FA
MR K. Murphy (24, 7/6/6/7) - 300,000/ARB
1B J. Agua (26, 6/7/6) - 4,750,000/ARB
UT W. Lopez (33, 5/3/5) - 950,000/FA
OF S. Rodriguez (28, 7/10/8) - 7,500,000/FA
OF J. Lewis (25, 5/6/5) - 300,000/ARB
OF R. Mills (27, 5/4/4) - 500,000/ARB
Now, to see how much money we can spend on resigning the players look at the Team Financial Report on the Front Office screen. You'll see a total for signing extensions, and a total for signing free agents. The amount available for extensions is the total amount of all players' contracts who are due for arbitration or free agency plus cash on hand. For us, that means we have 36 million dollars to sign extensions ($29M+$7M cash). However, instead of figuring out how we're going to spend the $36M, let's look at it a different way.
If we let all 8 players go, our payroll would drop from $72M to $42.5M. We can project that we'll bring in somewhere around $70 million in revenues and we'll have around 5 million in cash (since we're projecting losses of $2M for this season). With our cash maximum set at $20M, the maximum amount of profits that we could make & retain next season would be $15M (cash max - current cash). If our goal next season is to fill the cash reserves back up to full, we'll want to keep our payroll around $55 million. Any less, and those extra profits just disappear, when they could've been spent on players. If we want to come somewhere close to breaking even again next season, we'll want to keep our payroll around $70 million, which would give us $27M to spend on free agents and arbitration. If we want to spend every last dollar we've got, we can do that too, but unless it brings a world series appearance along with more revenue and higher fan interest, we could be gambling with multiple of years of negative revenue, meaning no money to sign free agents, and less money to retain current players.
Now that we know how much money we want to spend, we can estimate how much it will take to resign each player, or how much they will receive in arbitration. Let's start with the players eligible for free agency. When we click on the 'offer extension' button we will see one of four responses from the player:
1. A specific contract request (4 million for 5 years) - More often than not a player will sign for slightly less money, or a year or two less than what he is requesting, although occasionally it will take no less than his demands.
2. "Let me hear your offer" - The player gives you no real idea what it will take to sign him. The best way to get a good idea of how much it will take to sign him is to do a player search for players with similar ratings at the same position and near him in age and see how much they are currently making. Make sure to note whether or not the player you are comparing was signed via free agency or an extension, as players will usually get more in free agency than they would if they signed an extension. (an easy way to find out is free agency contracts signed are noted in the player history, while extensions are not).
3. "I want to test free agency" - Although they say that, they will still be willing to sign an extension. Use the same process described in #2 to get an idea of where to start your offers.
4. "I want to play for a winning team next year" - You'll see this response if the player has a strong desire to play for a winner (although others who don't care will sometimes give this response as well) and your team is currently under .500. If this is a player you want to sign, you'll have to wait until your team's record climbs above .500 and sign him immediately.
Take your list of players eligible for free agency and estimate what it would take to resign each one. Also, note who you would replace the player with if you were to let him go, whether it be an emerging prospect, a current back-up, or if you'd have to acquire someone via free agency or trade. Let's take a look at our potential free agents:
continued next post