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Old 03-10-2003, 07:55 PM   #1
Steve Kuffrey
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OOTP5 Financial FAQ Part One - Arbitration Made Easy-asamford

With the introduction of arbitration, higher minimum salaries, and veteran refusals to be sent to the minors, the financial aspects of OOTP5 is seemingly presenting the greatest learning curve in the switch from version 4. I am not affiliated with Out of the Park Developments nor was I a beta tester for v5, but in an attempt to help out some of my fellow online leaguers who have asked (as well as anyone who might be finding the new system difficult) I have put together a rough guide on how the new financial system works. If anyone has any additions or corrections or questions, add them to this thread. Steve, feel free to sticky this or put it in the FAQ section, or do nothing with it

PART ONE: Arbitration Made Easy

In OOTP4, finances were relatively simple. A player would either be signed to a guaranteed contract for a specific amount of money for a specific amount of time, they were signed to a $100,000 contract that could be renewed for the players' first 5 seasons (including partial seasons), or they were signed to a Minor League Contract which would cost the team nothing. In OOTP 5 the minimum salaries have been raised to $300,000 which can only be renewed for a players first 3 seasons (including partial seaons), at which point the player is eligiblie for 3 seasons of arbitration. To best explain how this works, let's follow the career of a fictional prospect. For simplicity when discussing ratings they will be of the reduced option variety.

In the 2002 Amateur Draft the Montreal Expos select OF Sam Hesser with the first overall pick in the draft. Hesser is rated Brilliant/Brilliant/Brilliant and already has ratings of 2/2/4. Viewing the Minor League Report we can see that our scouts recommend that Hesser can already play AA ball, so we place him on the AA roster to begin his pro career. He spends most of the 2002 season at AA, and near the end of August his ratings have improved to 3/3/5 and scouts recommend he be promoted to AAA. He finishes the season at AAA, and after proceeding to the 2003 season his ratings again improved to 5/4/6. We decide that, at only 22, Hesser could use a little more time in the minors and another ratings boost before being promoted to the majors. By the all-star break, Hesser's ratings have improved to 6's across the board and most GM's would agree that he is ready to be a contributor in the bigs. At this point, we have a decision to make. As soon as Hesser is placed on the major league roster, he will be assigned a $300,000 contract and his clock begins ticking. Whether or not he is called up on April 1st or September 1st, he will be in Year One out of Three of $300,000 contract renewals.

With the Expos needing all the help they can get, and not wanting to risk Hesser losing ratings and/or talents by sitting in the minors for too long, we decide to call him up to the major league roster. When looking at Hesser's player card we see that he now has a $300,000 contract which expires after 2003. However, this information is misleading, so to see his true contract status we select Salary Info from the drop down menu on the Team Roster screen. Next to Hesser's name you'll see $300,000 1 YR Auto Res which means that he is eligible for automatic contract renewal and after the 'Proceed To Next Season' button is pressed he will once again be automatically assigned a $300,000 contract. Even though 2004 will be his first full season in the bigs, because we called him up at some point during the 2003 season, he will be in his 2nd of 3 "cheap years." Once again, when looking at the 'Salary Info' page we'll see $300,000 1 YR Auto Res. so we don't have to worry about Hesser's contract this year. When the "Proceed To Next Season" button is pressed and we begin the 2005 season, Hesser is again automatically assigned a $300,000 contract for the 3rd of his 3 "cheap years". Now when we look at Hesser's status on the 'Salary Info' page we'll see $300,000 1 Yr Arbtr. We may also get an e-mail from Hesser telling us that "his contract expires this year" and that he'd "really like to sign a contract extension." However, this is also misleading, because we have three choices of how we can handle Hesser's contract:

1. Do Nothing. When the "Proceed To Next Season" button is pressed at the end of the 2005 season, OOTP's arbiter will automatically assign Hesser a salary for the 2006 season. The salary assigned appears to be based upon ratings and can be as low as $350,000 for the lowest rung of players all the way up to $7 million (possibly even more) for a young superstar similar to Hesser. A list of all players and salaries awarded via arbitration can be found under 'League News'. There is no surefire way to know how much a player is going to be awarded via arbitration, but you can get an idea of how much a player will get by looking at how much similarily rated players were awarded in past seasons.

2. Release Hesser at the end of the season. This is OOTP's method of refusing to offer a player salary arbitration. By releasing the player at the end of the season the team will suffer no financial penalty, and the player will become a free agent, able to be signed by any team during the following season's free agent period.

3. Sign Hesser to a multi-year extension. You can attempt to negotiate an extension with the player, thereby avoiding arbitration. However, the player will usually be seeking at least as much, or possibly even more than they would be awarded in arbitration, and will generally not sign a contract that lasts longer than 2 or 3 years, so it's questionnable whether or not this is an effective financial strategy in OOTP. One advantage would be knowing exactly how much the player is going to cost you next season rather than having to guess. Once the player has been signed to an extension, his contract is the same as any other veteran signed to a contract, in that once his contract expires, an extension will have to be negotiated or the player will be a free agent. As we know, in negotiating extensions, sometimes we can insult the player with our offers to the point that he will tell us "your chance is gone. I will play elsewhere next season". Even if you fail to negotiate an extension with the player, if you do not release him at the end of the season, he will be assigned a salary via arbitration, and will be playing for your team. I haven't seen any evidence that if you piss a player off in negotiations and then he is "forced" to stay with your team via arbitration that it has any effect on his effectiveness as a player or willingness to negotiate with you in the future.

For the purpose of this tutorial, we will choose to do nothing with Hesser in 2005, meaning his 2006 salary will be assigned by OOTP's arbiter when the "Proceed To Next Season" button is pressed. At the beginning of the 2006 season we can view 'League News' or Hesser's player card and see that Sam (who has continued to develop in the majors and now has ratings of 7/8/7) has been awarded a salary of $5,750,000 for the 2006 season. Although a relative bargain for a slugger with those ratings, it's quite a jump from the $300k we paid him last year and will cause enough of a hike in overall team payroll that a team working with a tight budget or under a salary cap will need to plan accordingly (more on this in Part 2). Now, when we view the 'Salary Info' page we will see next to Hesser's name $5,750,000 1 YR Arbitr, meaning that Hesser will be eligible for arbitration once again and we have the same three choices of how to handle it. Even if Hesser's ratings stay the same, you can be certain that he will get a raise in arbitration, however, once again he will be demanding that amount or more for an extension, and will most likely not accept any offers for longer than 2 to 3 years.

We will again do nothing with Hesser meaning that when we 'Proceed To Next Season' to go into 2007, Hesser will again be assigned a salary by OOTP's arbiter for his 2nd of 3 arbitration years. We see that Hesser was awarded a salary of $6,500,000, a moderate raise from the year before, but nothing that would unexpectedly cripple a team's financial plan. 2007 will proceed the same as the previous year. We see on the 'Salary Info' page next to Hesser's name $6,500,000 1-Yr Arbtr. We again do nothing with Hesser and he will again be awarded a salary by OOTP's arbiter when we 'Proceed To Next Season' to enter 2008. Hesser, now 26, has developed into one of the league's brightest young hitting stars with ratings of 8/10/8 and he is consistently a top performer, so the arbiter assigns Hesser a salary of $7,500,000 for his 3rd and final year of arbitration. This season when we view the 'Salary Info' page we seenext to Hesser's name $7,500,000 1-Yr FA meaning that he is eligible for free agency at the end of the season and if we want to keep him we will have to sign him to an extension. Seeing as how Hesser has helped lead the Expos to a couple of playoff appearnces and a resurgence of popularity of baseball in Montreal, we can afford to sign him to that 5 year contract worth $13,000,000 a season that he is asking for. Hesser will then go on to lead the Expos to their first ever championship, and they all lived happily ever after.

2002- Drafted - Minor League Contract
2003 - Called up to Majors In July - $300,000 (1)
2004 - $300,000 (2)
2005 - $300,000 (3)
2006 - $5,750,000 (ARB 1)
2007 - $6,500,000 (ARB 2)
2008 - $7,500,000 (ARB 3)
- eligible for free agency -

Coming Soon: Part 2: OOTP5 Team Financials Year-By-Year, or How To Operate a Financially Successful Pennant Winning Team in OOTP5.
Steve Kuffrey
DABS Atlanta Braves - 2008 Eastern Division Champ
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