Any improvements in the Financials?

[r0nster]

thought we had Luxury tax in game already (IE revenue sharing) for that's what Luxury tax is for

[wallewalls]

Originally Posted by Markus Heinsohn

The problem is that the current real life rules are rather complicated, and adding them to the game without adjustments is a lot of work and would confuse the majority of users. We'll likely look at this after the release, right now it is not a priority I'm afraid.

oh i get it. trust me, i'm still planning on playing this game nonstop when it comes out lol

[dave1927p]

I'd like to see an option for a salary cap floor option over luxary tax. But I'd expect it would be difficult for the AI and be too time consuming to add.

[Le Grande Orange]

Originally Posted by Markus Heinsohn

The problem is that the current real life rules are rather complicated, and adding them to the game without adjustments is a lot of work and would confuse the majority of users. We'll likely look at this after the release, right now it is not a priority I'm afraid.

The two main areas of difficulty, in my estimation: (1) the manner in which payrolls are calculated for luxury tax purposes [Article XXIII C of the CBA], and (2) the various provisions for clubs which exceed the luxury tax threshold, which now, for the first time, include having a club's highest available amateur draft pick moved down if it exceeds certain thresholds. [Article XXIII B 4 (c) of the CBA]

In regards to item #1, those accounting methods are not that bad. Basically, it means taking the average annual value of the guaranteed years of a player's contract, plus a pro-rated share of any signing bonus or buyout amount spread out over the guaranteed years. The one change implemented in the new CBA was that the salary of an outrighted player now counts for the entire season in determining a club's luxury tax payroll, whereas previously it only counted up to the date the player was outrighted.

(The one other item of note is that the real-life calculations for each club include a 1/30th share of the benefits players get; in 2016 this was just under $13 million per MLB team. This naturally pushes up a club's luxury tax payroll higher than it is purely for player salaries. This per-club benefit amount can actually be estimated in a very simple way, if OOTP ever decides to factor this aspect in.)

Item #2 is where things get tricky, as now draft positions for a club can be affected by its luxury tax status.

[BrianSul]

Also in Historical the financials are not working very well. Try playing the 1968 A’s and you see the system paying rookie players like Reggie Jackson the highest salaries on the team. It should pay players with less than 3 years of service on the low end of the range. Only established stars with 5 or more years of service should be making big salaries.

[udbacker58]

Originally Posted by Markus Heinsohn

The problem is that the current real life rules are rather complicated, and adding them to the game without adjustments is a lot of work and would confuse the majority of users. We'll likely look at this after the release, right now it is not a priority I'm afraid.

You under-estimate your user base. The more realistic (even if complex), the better is the motto for many.

[Le Grande Orange]

All I can say is that I've probably done more research into the financial aspects of both major and minor league baseball than anyone else posting here. I've got a ton of data sitting on my hard drive that could serve as a useful reference. (Not to mention some ideas as to how to set up a more realistic and still flexible financial system.)

[dward1]

Originally Posted by Le Grande Orange

All I can say is that I've probably done more research into the financial aspects of both major and minor league baseball than anyone else posting here. I've got a ton of data sitting on my hard drive that could serve as a useful reference. (Not to mention some ideas as to how to set up a more realistic and still flexible financial system.)

what would your 3 most important changes be if you were in control?

[Le Grande Orange]

Originally Posted by dward1

what would your 3 most important changes be if you were in control?

Bit of a difficult question since the financial system is a highly interconnected entity, but the biggest general change is to bring revenue and expenses into balance.

Right now, you either have to choose between realistic revenue numbers or realistic payroll numbers; you can't have both because OOTP does not model at all the myriad of other expenses real clubs have. These real expenses would be such things as spring training, club travel, stadium operations, advertising and marketing, minor league operations, general and administrative costs, etc. In OOTP nearly all of a team's expenses are its players; in real life, on average, player payroll is closer to roughly 50% on average. This mismatch between revenue and expenses makes it a lot harder to tune OOTP's financial world against real-life examples.

The question is, which, if any, of these other areas of expense should be directly controllable by the user? Even if one answers 'none' (an answer I'd agree with, other than perhaps minor league operations) these expenses can still be abstracted based on real data so as to provide realistic levels of revenue against which player expenses can be adjusted.

When both revenues and expenses have realistic-looking values, whether for today's baseball environment or that of sixty years ago, it becomes a lot easier to see if everything is balanced and working correctly.

[Calvert98]

Originally Posted by Le Grande Orange

Bit of a difficult question since the financial system is a highly interconnected entity, but the biggest general change is to bring revenue and expenses into balance.

Right now, you either have to choose between realistic revenue numbers or realistic payroll numbers; you can't have both because OOTP does not model at all the myriad of other expenses real clubs have. These real expenses would be such things as spring training, club travel, stadium operations, advertising and marketing, minor league operations, general and administrative costs, etc. In OOTP nearly all of a team's expenses are its players; in real life, on average, player payroll is closer to roughly 50% on average. This mismatch between revenue and expenses makes it a lot harder to tune OOTP's financial world against real-life examples.

The question is, which, if any, of these other areas of expense should be directly controllable by the user? Even if one answers 'none' (an answer I'd agree with, other than perhaps minor league operations) these expenses can still be abstracted based on real data so as to provide realistic levels of revenue against which player expenses can be adjusted.

When both revenues and expenses have realistic-looking values, whether for today's baseball environment or that of sixty years ago, it becomes a lot easier to see if everything is balanced and working correctly.

The minor financials however are conflated a bit, because there are independent revenue streams associated with those operations, right?

And I agree, I wouldn't want control over those other expenses. And to that, another question is when you are given your budget from ownership, it never squares with revenue; so that being the case, the question: is it a matter of you getting that budget, which already incorporates those costs, and further, you are only allowed control over direct "baseball-operations" such as payroll, development, scouting, etc...once you do get that budget?

[Le Grande Orange]

One general point about finances is OOTP doesn't really reflect the idea of markets being distinct geographic entities. You could put an ML team in Topeka and it might out-earn the Yankees, under the game's current financial system. While there are some positive aspects to that approach, I think many would say it is unrealistic. Many would prefer a more city-based market approach, where a club's revenue potential is dependent on some degree to the city's size and its economic capacity to support a major league team.

I put a lot of thought into trying to create such a city-based approach that would be viable both historically and currently. It's a complicated matter, really, with no one right answer.

Originally Posted by Calvert98

The minor financials however are conflated a bit, because there are independent revenue streams associated with those operations, right?

In real life there is an agreed-upon split of the expenses of minor league clubs. The main cost paid by the ML is the salaries of the players and managers, along with some other selected items, such as the minor's spring training expenses, baseballs and bats, etc. The minor league club is responsible for paying whatever the ML parent doesn't pay for. Thus the affiliate has to pay for team travel, stadium operations, front office staff, etc. (Some ML clubs do own outright their affiliates; most do not.)

Even though minor league players are not paid much, the sheer number of players in a minor league system adds up. Then one has to add in the cost of the administrative costs of overseeing all those affiliates, the various instructors, and so forth.

Originally Posted by Calvert98

And I agree, I wouldn't want control over those other expenses.

Some of them can be argued both ways. I just generally prefer a more streamlined experience, as well as not implementing systems if there isn't a good amount of data to serve as a reference.

Originally Posted by Calvert98

And to that, another question is when you are given your budget from ownership, it never squares with revenue; so that being the case, the question: is it a matter of you getting that budget, which already incorporates those costs, and further, you are only allowed control over direct "baseball-operations" such as payroll, development, scouting, etc...once you do get that budget?

Yeah, the whole notion of budgets and whether an owner likes to keep profits versus reinvesting back into the team, or is a free-spender and is willing to spill some red ink for a few seasons to win a championship is an interesting area to ponder. Lots of room for interesting discussion.

[Calvert98]

Originally Posted by Le Grande Orange

One general point about finances is OOTP doesn't really reflect the idea of markets being distinct geographic entities. You could put an ML team in Topeka and it might out-earn the Yankees, under the game's current financial system. While there are some positive aspects to that approach, I think many would say it is unrealistic. Many would prefer a more city-based market approach, where a club's revenue potential is dependent on some degree to the city's size and its economic capacity to support a major league team.

I put a lot of thought into trying to create such a city-based approach that would be viable both historically and currently. It's a complicated matter, really, with no one right answer.
.

I thought that "market-size" in the game, which is directly drawn from each metro-area's real-life stats, is one of the primary variables directly impacting revenue (attendance, merchandise, etc...). Is it an issue that it's just not weighted enough in the calculation?

Anyway, agreed, lot's of interesting room for discussion.

[Le Grande Orange]

Originally Posted by Calvert98

I thought that "market-size" in the game, which is directly drawn from each metro-area's real-life stats, is one of the primary variables directly impacting revenue (attendance, merchandise, etc...). Is it an issue that it's just not weighted enough in the calculation?

Market size in OOTP is a misnomer, as it doesn't really reflect anything to do with the population of the host city, which is how most would interpret the term 'market'.

Of course, taking into account just the population size of a city isn't really sufficient, as it does not factor income. I would say population times per capita income yields something closer to a truer measure of an area's economic ability to sustain a major league sports club.

Any system that takes markets—defined here as fixed geographic areas with a specific economic capacity arising from its population size and per capita income—shouldn't be locked into contemporary valuations, but be flexible enough to use historical valuations. That's where things get interesting. (At least for the U.S., the data required to put together a reasonable facsimile of past city economic capacity is freely available through the U.S. Census Bureau web site, though one does have to dig around a bit. Finding such data for other countries might be more difficult.)

[walt526]

I'll echo the earlier sentiment that historical would be greatly improved by importing accurate contracts. It's part of the Lahman database. Granted it won't be 100% accurate for all FA years, but it will be an improvement over the current version.

[Calvert98]

Originally Posted by Le Grande Orange

Market size in OOTP is a misnomer, as it doesn't really reflect anything to do with the population of the host city, which is how most would interpret the term 'market'.

Of course, taking into account just the population size of a city isn't really sufficient, as it does not factor income. I would say population times per capita income yields something closer to a truer measure of an area's economic ability to sustain a major league sports club.

Any system that takes markets—defined here as fixed geographic areas with a specific economic capacity arising from its population size and per capita income—shouldn't be locked into contemporary valuations, but be flexible enough to use historical valuations. That's where things get interesting. (At least for the U.S., the data required to put together a reasonable facsimile of past city economic capacity is freely available through the U.S. Census Bureau web site, though one does have to dig around a bit. Finding such data for other countries might be more difficult.)

I agree that income level should be accounted for.

As to Market size/definition, for professional sports, the closest Fed-data you can get is "metro-area" CBSA, which BLS uses in its database for the top 51, which is what would drive those assumptions. You then would use MHI or MEAI, depending on what would get you closest. That's probably the easiest way to determine it per market.

And you can actually have more spending per household (say interest) in one market over another, which could in-fact out-weigh an income or population advantage of another comparable market, but perhaps not both; it depends on how big of a gap exists between those factors. Markets that are both large and densely populated will usually outweigh that variable for example.

Anyway, interesting thoughts.