Revenue Sharing?

[Dave Stieb II]

First chance to break the seal on '24 tonight and just having a look around.
And it appears that revenue sharing at 48% "shared percentage of income" is the new MLB default in a Standard Game.
Not sure where to begin with the questons but "Why?" seems like a good place to start, since revenue sharing does not exist IRL but now the financials have been tinkered with to include it as a default in this "realistic sim". Which leads to a question about "How?" badly the financials will get messed up if we do away with this non-existent (IRL) leftist re-distribution of income.
Next is "What?" exactly does this mean. Does it mean that 48% of every team's income goes into a pot and is re-distributed evenly or how exactly does it work?
I mean, if that is the case, then the financials will bare no resemblance to RL if left unchanged, and, yet, will probably get messed up if this is the new norm and I turn it off.
Anyway, what is it? How does it work? Who decided this was realistic or an improvement over RL? If these questions have already been asked or answered in another thread, I apologize and please direct me there.
Thanks/

[Matt Arnold]

https://tbonesbaseball.com/how-mlb-t...n%20by%20teams.

[bigd51]

Quick search...

https://www.blessyouboys.com/2021/12...ow-to-solve-it

So how does revenue sharing work?

Teams presently contribute 48 percent of all local revenues, including gate receipts, local TV revenue, concessions, parking, sponsorships, etc, and the funds are then divided equally among all 30 teams. Part of the rationale is that it takes two teams to put on a game, so both teams should share in the revenue generated by those games.

As a result, in 2018, each team received $118 million from this fund, according to baseball_reference with larger market teams putting in more and smaller market teams less. About half of teams are net recipients and the other half net payees. Teams also receive a share of national revenues, which were estimated to be $91 million per club in 2018, and they still have kept 52 percent of their own local revenues. And their payroll is how much?

In 2019, the Marlins received about $70 million, while the Rays are usually in the $50-$60 million range, according to The Athletic. The Indians, Pirates and Reds are around the top five payees, off and on. The Dodgers paid about $90 million in 2019. The Red Sox, Cubs and the Yankees round out the top four, at above $60 million.

MLB needs some form of sharing local revenues, because the revenue generated during the regular season is mostly local, and there is an enormous disparity in money generated between a market like Los Angeles or New York, and that of Pittsburgh or Kansas City. In the NFL, all the games are broadcast nationally, and all the television revenue is divided evenly. So when the Packers are playing the Cowboys, the Lions get an equal cut of the TV revenue, for example.

MLB’s national television revenues from TV contracts with ESPN, Fox, and Turner broadcasting will be renewed starting in 2022, and those revenues are divided among all 30 teams, as are revenue from streaming games on MLB.tv. The national TV contracts skew heavily toward post season play.

[Matt Arnold]

But otherwise, it does exist in real life. Our version isn't exactly the same, but splitting out revenue sharing and the luxury tax gives a little more control over financials. We may decide to change that down the road, or you can change it yourself in your games, depending on what kind of balance and financial setup you want.

[AdamLindsBeard]

Originally Posted by Dave Stieb II

Who decided this was realistic or an improvement over RL? If these questions have already been asked or answered in another thread, I apologize and please direct me there.
Thanks/

My hunch is your questions were asked and answered by Bud Selig and Don Fehr, who were running the show in 2002 when revenue sharing was brought in IRL as part of the CBA.

[Dave Stieb II]

I apologize and stand corrected. I didn't realize that much money was being "shared". If I were a Pirates or Marlins fan, just for example, I would really be pissed that they don't spend more than they do. Friggin' freeloaders.

But back to what's most important, Matt. How is the 48% revenue sharing going to work in OOTP? Is it all going into one big pool and then being redistributed at 3.3% of the total?

I know the luxury tax in OOTP isn't as detailed as IRL but I have no problem with that....It is what it is and I just do what I can to try replicate it.

They key is knowing exactly how it works, hence my question to better understand how the 48% works.

[Dave Stieb II]

Originally Posted by AdamLindsBeard

My hunch is your questions were asked and answered by Bud Selig and Don Fehr, who were running the show in 2002 when revenue sharing was brought in IRL as part of the CBA.

Too bad I didn't quote Matt before my reply to HIM.
Had I seen your smug/gotcha post, naturally I would never have apologized directly thereafter.
Run along now. Troll elsewhere.

[Matt Arnold]

48% of each team's revenues go into a pool, and everyone gets 1/30th of that back in the "revenue sharing" line on their balance sheet at the end of the season. Or, more precisely, the revenue sharing line on the accounting tab will show the net of what they put in vs what they get out.

In the end, I bet for most teams, the owners will take that revenue sharing money and you won't ever end up seeing it...

[Dave Stieb II]

Originally Posted by Matt Arnold

48% of each team's revenues go into a pool, and everyone gets 1/30th of that back in the "revenue sharing" line on their balance sheet at the end of the season. Or, more precisely, the revenue sharing line on the accounting tab will show the net of what they put in vs what they get out.

In the end, I bet for most teams, the owners will take that revenue sharing money and you won't ever end up seeing it...

Thanks for the quick response, Matt. I'm glad you have added it to the game!....now that I know revenue sharing of this magnitude exists. LOL

And I bet you are correct about the owners. It certainly is clear that many of the small market owners are doing that IRL, rather than re-investing it in their clubs. It is a disgrace.

[Matt Arnold]

Originally Posted by Dave Stieb II

Thanks for the quick response, Matt. I'm glad you have added it to the game!....now that I know revenue sharing of this magnitude exists. LOL

And I bet you are correct about the owners. It certainly is clear that many of the small market owners are doing that IRL, rather than re-investing it in their clubs. It is a disgrace.

It's actually been an option in the game past years, but it was always either/or vs luxury tax (ie. you had to choose one or the other). This year was split so you could have both, since MLB has both. And especially with the ability to have revenue sharing dollars impact the international bonus pool money, it's a nice way to get the systems playing together.

[Dave Stieb II]

Originally Posted by Matt Arnold

It's actually been an option in the game past years, but it was always either/or vs luxury tax (ie. you had to choose one or the other). This year was split so you could have both, since MLB has both. And especially with the ability to have revenue sharing dollars impact the international bonus pool money, it's a nice way to get the systems playing together.

Uh huh. Now I remember. It was an either/or in prior years and I always chose the luxury tax because I had no idea rev sharing existed anywhere close to this level. But your response leads to 2 more questions:
how does revenue sharing affect the international bonus pool money? (I think I read about that during the last negotiations but I've had some trauma since and I don't remember details like this nearly as well)
does the road team still get 20% of the gate on top of all this other corporate welfare?

[MathBandit]

Originally Posted by Dave Stieb II

how does revenue sharing affect the international bonus pool money? (I think I read about that during the last negotiations but I've had some trauma since and I don't remember details like this nearly as well)

I don't know the answers to the other questions so will leave those for someone that does, but for this one the default OOTP24 setting (which I believe mirrors RL) is that teams that are 'poor' and benefit from revenue sharing also get increased IAFA bonus pool money.

The idea being that to counterbalance the revenue and spending of the Yankees and Dodgers, teams like the Athletics and Rays can invest more money into IAFAs to built up more talent that way to help even the playing field. Of course in practice it often ends up that those owners just pocket the money or trade away the bonus pool anyways so they don't have to spend it, like you said.

[Dave Stieb II]

Originally Posted by MathBandit

I don't know the answers to the other questions so will leave those for someone that does, but for this one the default OOTP24 setting (which I believe mirrors RL) is that teams that are 'poor' and benefit from revenue sharing also get increased IAFA bonus pool money.

The idea being that to counterbalance the revenue and spending of the Yankees and Dodgers, teams like the Athletics and Rays can invest more money into IAFAs to built up more talent that way to help even the playing field. Of course in practice it often ends up that those owners just pocket the money or trade away the bonus pool anyways so they don't have to spend it, like you said.

Alright, thanks mathbandit. That pretty much covers all my questions.
Stunned about the 48% sharing - I never knew or forgot about it somwhere along the way. But I now understand more fully how aggravated fans of these 'cry poor teams' must be - and justifiably so.
I mean, sharing a piece of the revenue pie to that degree, the luxury tax share, and a greater IFA pool and they do what, exactly, with it?
Corporate freeloaders and corporate welfare junkies.
Of course, I'm not talking about a club that takes a step back for a couple seasons to reload or, per Jerry Dipoto, "re-imagine" and decides to avoid paying 'term' for a short period. In those cases, or at least some of them, that makes good logical sense.
But the Pirates owner, for instance, should be forced to sell his team to someone with an interest in putting a competitive ball club into the nicest stadium in MLB and foregoing the welfare. And there are others.

[MathBandit]

Originally Posted by Dave Stieb II

Alright, thanks mathbandit. That pretty much covers all my questions.
Stunned about the 48% sharing - I never knew or forgot about it somwhere along the way. But I now understand more fully how aggravated fans of these 'cry poor teams' must be - and justifiably so.
I mean, sharing a piece of the revenue pie to that degree, the luxury tax share, and a greater IFA pool and they do what, exactly, with it?
Corporate freeloaders and corporate welfare junkies.
Of course, I'm not talking about a club that takes a step back for a couple seasons to reload or, per Jerry Dipoto, "re-imagine" and decides to avoid paying 'term' for a short period. In those cases, or at least some of them, that makes good logical sense.
But the Pirates owner, for instance, should be forced to sell his team to someone with an interest in putting a competitive ball club into the nicest stadium in MLB and foregoing the welfare. And there are others.

The numbers I've seen are that between national TV deals, local TV deals, and revenue sharing, each team brings in over $100M annually before selling a single ticket or piece of merch. 7 teams have a total 2023 payroll below $100M, per fangraphs.

[andyhdz]

Originally Posted by Dave Stieb II

..with this non-existent (IRL) leftist re-distribution of income.
/

Those commies trying to indoctrinate us!

[Dave Stieb II]

Originally Posted by andyhdz

Those commies trying to indoctrinate us!

Well, I've never associated communism with corporations - seems like a bit of an oxymoron to me.
But I have no problem calling out corporate welfare basket cases and junkies when I seem them - whether they are banks, auto manufacturers, baseball owners....I could go on and on but we haven't got all day.

[Le Grande Orange]

Originally Posted by Dave Stieb II

Stunned about the 48% sharing - I never knew or forgot about it somwhere along the way.

It sounds like a lot but when you actually work through the formulas used — which are complicated — it's not quite that bad in practice. The system has grown more complex over the years.

MLB's revenue sharing system is described in detail Article XXIV of the CBA. Note that the text of the 2022-26 CBA still has not yet been publicly released, even though it's been a year since the settlement.

Note that in real life some clubs are disqualified from receiving revenue sharing funds they would otherwise be entitled to based on their defined market size. If a club was a luxury tax payer in the prior season(s), it forfeits some or all of the revenue sharing funds it was otherwise entitled to.

The following clubs cannot receive revenue sharing (according to the 2017 CBA):

Both New York teams, both Los Angeles teams, both Chicago teams, Toronto, Washington, Philadelphia, Oakland, San Francisco, Boston, and Texas.