Financial Issue 4 to 5 years in

[HRBaker]

For the time being I'm keeping my v23 leagues in v23. Reading too much about the financial issues, and simply don't want to screw up my classic leagues. If we do get some corrections or guidance I'll reconsider.

[OutS|der]

Originally Posted by renojedi

Glad you brought this up. This was one of the worst parts of 2023 that apparently is still there. So many two way players in the draft that within 5 years, almost every team has one. And, because they aren't shohei, you get the contract issues you mentioned.

Two way players have never really worked right since they were introduced.

Can you not turn off two way players yet keep Shohei as one under his strategy settings?

[Carplos]

Originally Posted by chanceliebau

It's been a problem since they were added to the game, but two-way contracts are absurd. I'm about ten years into my sim (miraculously) and there are 28 y/o, five-star batters who have rookie league-level pitching skills that are commanding just $5M, and this is in 2030ish. There are also too many two-way guys in general. Shohei is once-in-a-generation player, there shouldn't be 25+ players with two-way skills in every single draft.

The issue isn't having too many two-way players in the draft since that's realistic for high school/college players, the issue is all of them except for rare occasions should only be doing one once they start in the minors. That's the part OOTP seems to be missing, human and AI should be able to choose which one to focus on (without resorting to the editor).

This should be configurable of course. I actually prefer a few more two-way players than is "realistic" since I play fictional, but if you're trying to simulate modern MLB, it doesn't make sense to have so many two way players in the minors.

[Le Grande Orange]

Originally Posted by Carplos

The issue isn't having too many two-way players in the draft since that's realistic for high school/college players, the issue is all of them except for rare occasions should only be doing one once they start in the minors. That's the part OOTP seems to be missing, human and AI should be able to choose which one to focus on (without resorting to the editor).

There are some real-life restrictions around two-way players: (1) a two-way player has to be placed on the 15-day injured list for pitchers, and (2) if optioned to the minors, he must stay there for at least 15 days required by pitchers. In other words, a two-way player is treated as a pitcher rather than a position player for injury list and optioning purposes.

I don't think OOTP recreates these restrictions, however.

There was also the requirement that a player had to have pitched at least 20 innings in the majors and started at least 20 games as a position player or designated hitter, with at least three plate appearances in each of those games, before being eligible for designation as a two-way player. I'm not sure if that requirement applies to new players entering the majors.

[md40022]

Originally Posted by OutS|der

Two way players have never really worked right since they were introduced.

Can you not turn off two way players yet keep Shohei as one under his strategy settings?

Unless I was doing something wrong, I couldn't get this to work.... I played with this quite a bit because the amount of two-way players in the minors is just insanely inaccurate.

After disabling two-way players, I set Shohei's individual strategy to override this, but it didn't play out that way. Computer immediately took him out of the everyday batting order and no matter what I tired I couldn't get him to stay in the lineup. As soon as I'd sim 1 day ahead, he'd be back out of the lineup.

I ended up having to reenable two way players. But there's part of me that is kicking around the idea of removing Ohtani from the game completely or making him just a position player or just a pitcher and then disabling two-way. It stinks that I am even toying with that idea, but I don't know what other options there are

[md40022]

Originally Posted by Carplos

The issue isn't having too many two-way players in the draft since that's realistic for high school/college players, the issue is all of them except for rare occasions should only be doing one once they start in the minors. That's the part OOTP seems to be missing, human and AI should be able to choose which one to focus on (without resorting to the editor).

This. All of this.

[Mike D]

Originally Posted by PSUColonel

I am amazed there hasn’t been any official comment on this.

Never will. Fixing financials isnt a priority cause it doesn't increase revenue.

[rudel.dietrich]

But players can have colored socks now.
So it it all even!

[Le Grande Orange]

Originally Posted by Mike D

Never will. Fixing financials isnt a priority cause it doesn't increase revenue.

Or perhaps such a fix requires having a good plan for any new system. And no such plan exists as yet since it would need considerable discussion and thought.

[SirMichaelJordan]

A lackluster financial system is far too standard in sports management games (even in wrestling sims, which is a sport)

However, other management games shine in this area.

The central selling point is the sport, and most people want to build fantasy rosters.

As an Eagles fan (NFL), I am just in awe of how our GM, Howie Roseman, can navigate cap space, and I could only dream of doing the same in a sports sim in 2023.

[PSUColonel]

Originally Posted by Le Grande Orange

Or perhaps such a fix requires having a good plan for any new system. And no such plan exists as yet since it would need considerable discussion and thought.

I would definitely agree with this...although I'd also point out we are 24 years into this thing.

[Sweed]

Originally Posted by Mike D

Never will. Fixing financials isnt a priority cause it doesn't increase revenue.

Well, it is a business.

[SirMichaelJordan]

Originally Posted by Le Grande Orange

According to real-life references, clubs should have the following regularly ongoing revenue sources:

Gate receipts
Local TV/Radio
Concessions & merchandise
Venue
Advertising & promotions
National

Venue revenue is primarily premium seating (club seats & luxury suites), but also such things as parking and stadium rental for other events. While premium seating could be thought of as a 'modern' category starting with the new parks built in the 1980s and 1990s, the box seats in the parks of old were effectively the premium seating of their day.

National revenue is the income from the league as a whole, and is distributed in equal amounts to each team.

One could argue that advertising & promotions could be combined with concessions & merchandise for OOTP's purposes to streamline revenue sources. But I would argue they should be separate as concessions & merchandise is earned from the fans attending the games, while advertising & promotions can be thought of as the level of corporate support for a club.

To the foregoing can be added revenue that can occur but is not necessarily regularly recurring:

Post-season
Gain on player transactions
Revenue sharing
Luxury tax
Expansion fees

Note that, starting with the 2017 CBA, some of the luxury tax proceeds from paying teams can be distributed to non-paying teams.


On the other side of the ledger, the expenses real-life teams have:

Players (including bonuses and player benefits)
Managers & coaches
Team operations
Venue operations
Scouting
Minor league operations
Administrative & general

Note that real-life sources sometimes roll the costs of the manager and coaches into team operations or as part of player costs. Player benefits include the myriad of in-season benefits the players get such as meal money as well as contributions to the players' pension plan. In 2022 these group benefits cost each team $16 million (plus another $1.67 million per team for the newly created pre-arbitration bonus pool).

Team operations includes such things as travel, hotels, uniforms, insurance, payroll taxes, etc. Venue operations are the cost of operating the team's park, i.e. grounds crew, power, ticket takers, ushers, security, maintenance, etc.

Scouting in real-life sources is sometimes rolled into the player development category, which includes the cost of running the minors. Minor league operations is the cost of running the affiliates which includes the salaries of the players, manager, and coaches, financial support to the affiliate from working agreements, spring training, and so forth. One expense not usually separated out in real-life sources is the cost of signing bonuses to drafted players. Presumably it's included as part of player development.

Expenses which can sometimes occur but are not necessarily regularly recurring:

Loss on player transactions
Revenue sharing
Luxury tax


Real-life example of the 1996–98 Cleveland Indians (which does show signing bonuses for drafted players separately, but on an amortized basis). Percentage of revenue and expense have been added as a convenience to see the proportion each category contributed. The percentage figure for net operating income is that figure divided by the total revenues amount.

                                   1996             1997             1998 	
REVENUES						
						
Gate Receipts (net)              45,658  46.0%    49,279  43.8%    55,830  44.0%
Local Media                      13,631  13.7%    17,014  15.1%    19,649  15.5%
Concessions & Merchandise (net)  17,717  17.8%    18,562  16.5%    20,353  16.0%
Stadium                           7,035   7.1%     8,704   7.7%     9,358   7.4%
Advertising & Promotions (net)    4,046   4.1%     5,031   4.5%     6,171   4.9%
National (net)                   11,225  11.3%    13,932  12.4%    15,600  12.3%
---------------------------------------------------------------------------------
Total revenues                   99,312 100.0%   112,522 100.0%   126,961 100.0%

						
OPERATING EXPENSES						
						
Players                          47,687  56.0%    58,865  58.7%    56,843  52.8%
Major league team                 5,768   6.8%     5,155   5.1%     9,769   9.1%
Player development                8,889  10.4%    10,536  10.5%    11,540  10.7%
Ballpark operations              10,834  12.7%    11,539  11.5%    12,283  11.4%
Administrative and general        8,756  10.3%    10,499  10.5%    12,709  11.8%
Signing bonuses and contracts	  3,212   3.8%     3,630   3.6%     4,412   4.1%
---------------------------------------------------------------------------------
Total operating expenses         85,146 100.0%	 100,224 100.0%   107,556 100.0%

						
OPERATING INCOME (LOSS)          14,166  14.3%    12,298  10.9%    19,405  15.3%

						
SPECIAL INCOME (EXPENSE)
					
Post-season (net)                   624            6,799            5,374 	
Player transactions (net)           616            2,696           (1,355)	
Revenue sharing                  (5,731)          (7,186)         (10,209)	
Luxury tax                            0           (2,065)             (24)	
Expansion fees                        0            9,286                0 	
---------------------------------------------------------------------------------
Total special income             (4,491)           9,530           (6,214)	

					
NET OPERATING INCOME (LOSS)       9,675   9.7%    21,828  19.4%    13,191  10.4%

Good stuff!

The current model does not generate enough revenue, which is why I think cash max is used in the first place to add money from the previous year, even though this option becomes a cheat if you are using "Owner decides the budget.

In my previous post, I should have mentioned that I up the media contracts to match reality and added concessions into merchandise. I then bumped up the player development baseline and scouting to offset the adjusted revenue figures.

The average profit number looks good for the first season with the default roster set. However, as the years go on, that number gets lower and lower, especially with the default inflation settings and using the default cash max settings, as that will also drive up player contracts demands.

[SirMichaelJordan]

Double post

[PSUColonel]

So is there any consensus here? Is the issue likely related to inflation, the mlb setup (as opposed to game engine financial setups) or both?

[SirMichaelJordan]

Originally Posted by PSUColonel

So is there any consensus here? Is the issue likely related to inflation, the mlb setup (as opposed to game engine financial setups) or both?

It is a combination of needing more revenue to be generated to afford the cost of expenses, primarily due to inflated contracts because of high default inflation settings and cash max settings.

If you do not want to increase revenue and expenses to balance out the revenue artificially, then its better to lower either inflation or the cash max.

My current setup

Inflation = 0% - 4% (3% if you want to be conservative)
National Media Contract Baseline = $60mill ($65mill you want to factor in new deals like Peacock)
Local Media Contract Baseline = $60mill (research suggest this number range from $40-$60mil on average: I choose 60)
Merchandise = $40mill (I added concessions under this and research suggest $10 - $20mil for concessions)
Staff Salaries = $1.5 mil (for some reason, managers are criminally cheap)
Cash Max = $1 (personal choice as I want owners to decide budget 100%)

[PSUColonel]

Originally Posted by SirMichaelJordan

It is a combination of needing more revenue to be generated to afford the cost of expenses, primarily due to inflated contracts because of high default inflation settings and cash max settings.

If you do not want to increase revenue and expenses to balance out the revenue artificially, then its better to lower either inflation or the cash max.

My current setup

Inflation = 0% - 4% (3% if you want to be conservative)
National Media Contract Baseline = $60mill ($65mill you want to factor in new deals like Peacock)
Local Media Contract Baseline = $60mill (research suggest this number range from $40-$60mil on average: I choose 60)
Merchandise = $40mill (I added concessions under this and research suggest $10 - $20mil for concessions)
Staff Salaries = $1.5 mil (for some reason, managers are criminally cheap)
Cash Max = $1 (personal choice as I want owners to decide budget 100%)

How do these settings work out over time? It appears the issue is that there might not be enough revenue for teams'??

Hopefully these settings should fix the issues??

[Le Grande Orange]

In 2019, according to Forbes, the breakdown of MLB revenue was as follows (in millions of dollars):

3,200 = gate receipts (includes club seats and luxury suites)
2,200 = local media
0,925 = other stadium revenue (includes concessions, team stores, parking, etc.)
1,100 = sponsorships (includes ad signage, naming rights, etc.)
3,100 = national revenue

In percentage terms:

30.4% = gate receipts
20.9% = local media
08.8% = other stadium revenue
10.5% = sponsorships
29.5% = national revenue

Forbes also listed the following as the five highest local media contracts for the season:

188.0 million = LAN
156.0 million = NYA
116.0 million = ANA
112.0 million = PHI
104.0 million = BOS

[SirMichaelJordan]

Originally Posted by PSUColonel

How do these settings work out over time? It appears the issue is that there might not be enough revenue for teams'??

Hopefully these settings should fix the issues??

Yes, if everything else falls in line assuming cash max isn't change to 0 or to a crazy high number or inflation isn't out of wack, player contracts shouldn't get ridiculous high.The increase revenue will keep the average profit at above $40mil and keep teams from losing profit so much and you'll have more teams in green than red.

[Le Grande Orange]

MLB average team revenue for selected years as derived from various sources. The values on the left axis are in millions of dollars.

The effect on revenue from the 1994–95 strike are evident, as is the enormous drop caused by the greatly shortened and no attendance 2020 season. But in both cases revenue had nearly recovered within three years ($64.95 million in 1993, $64.26 million in 1996; $345.8 million in 2019, $344.0 million in 2022).