Abu Taha's 2006 Financials

Abu Taha · 06-11-2006, 06:57 AM

Okay, I did some research using the Forbes lists for the past several years and a bunch of other sources. I looked at Metropolitan area, and Nielson TV markets, attendance and past performance to come up with what I think is a pretty accurate picture of 2006 MLBs finances.

I started with Forbes and calculated how much each team had to spend on players and personell if you take out non-player costs (the average MLB non-player cost was 54 million and it was not corrolated to market size).

From there I subtracted Attendance Revenue based on 2005 attendance multiplied by 15 dollars.

Next I calculated Market Size and Fan Loyalty. For Market size, I just went with metropolitan area. MLB cities are pretty big, so the lowest is 5; this is easy to tinker for anybody that feels like it. Fan Loyalty was a little more complex. First, I looked at Gate Revenue divided by metropolitan area. The idea isn't to find what team's fans are the most passionate but who puts the most money per capita in their team's coffers, depending on how their team is doing. I think this is as good a definition what the game does with Fan Loyalty as any.

To figure out who had the best Fan Loyalty, I looked over performance for the past 5 years and compared performance to average per capita gate. Based on performance, I divided the teams into 3 categories: Perenial losers, Perenial winners and Mixed. There was a definite distinciton in the average per captia gate that corralated to performance (and didn't corralate to market size, as one might expect). In each category of teams, I divided indivual per captia by the group average to get relative fan loyalty. St Loius was by far the best; Florida was by far the worst. (For large teams like NYY, I capped population at 6.7 million.)

Using Fan Loyalty, expanded Neison Markets and Market Size, I calculated expected Media Revenue. It looked pretty accurate (for example TEX came in at 25.5 and news sources say their local TV revenues are at 25 million).

I subtracted that from the total and whatever is left I called Merchandizing. This way, teams like Boston - who have lower attendance due to a small stadium but still rake in the dough - come up with really high and stable merchandizing revenue, while teams in the opposite situation (Angels) don't.

Finally, I used NY Times calculations of revenue sharing to figure out what percentage of each team's incomes was due to revenue sharing, and multiplied that percetnage against my player budget numbers. I added cash to teams recieving Revenue Sharing (subtracting from Merchandizing) and added to Merchandizing for those contributing. Anyway, this is what I came up with.

Abu Taha · 06-11-2006, 07:05 AM

Okay this is what I came up with if I can figure out how to attach it.

Abu Taha · 06-11-2006, 07:06 AM

And here is one with Revenue Sharing...

aewin · 06-11-2006, 07:45 AM

This book has some recent relevant financial data:

http://www.amazon.com/gp/product/046...lance&n=283155

aewin · 06-11-2006, 10:03 AM

Can you please run me through the column headings.

Raidergoo · 06-11-2006, 10:10 AM

Quote:

Originally Posted by aewin

This book has some recent relevant financial data:

http://www.amazon.com/gp/product/046...lance&n=283155

Tis a good book, but when I ordered it 2 weeks ago, they shipped it to a location that I have not lived at for almost 5 years.

My printout of the transaction has the address correct; Amazon just botched the shipping, and the old condo mgmt returned the box.

Amazon's customer service on this issue bordered on incomprehensible on this, and I gave up. Maybe I can get it for my birthday, as my wife just bought a copy of Total Baseball for me.

aewin · 06-11-2006, 10:15 AM

I got it sent to Australia and they found me!

Abu Taha · 06-11-2006, 10:21 AM

Revenue – Forbes revenue from last year.
05 Income – Money available for players based on Forbes estimates.
Income – OOTP Income with all factors combined from 05.
PO$- Playoff money. I adjusted the totals for this and subtracted it out separately so that CHW and HOU weren’t permanently high.
Gate – This is real world 05 attendance multiplied by 15 to get OOTP estimated Gate from the prior year.
Est TV- This is what I calculated local TV revenue’s to be.
Orig Merch –Merchandizing. This is what left after subtracting TV and gate from Income and adding/ subtracting Revenue Sharing.

RSS/ Cash – This is Revenue sharing adjusted for the OOTP world. I took the % of revenue sharing int eh real workd and applied it to Income.

ADJ REV – Revenue after you calculated out revenue sharing and put in cash.

BUDGET – I looked at the % of the prior years revenue each owner spent and created a Greed factor for Major League owners. I then multiplied it times ADJ REV to get a Budget for the game world. Sadly, we can’t edit the owners so there’s no way of knowing if this will work.

06 Pay- This is MLBs actual 2006 salary totals per team.

aewin · 06-12-2006, 06:47 AM

I am trying to get to a position of reasonably realistic financials for the OOTP Team Editor. Using your work as a base, I have a few Qs.

1) When I calculate adjusted revenue (Total Revenue + Revenue Sharing), I get some different numbers. Discrepancies in red.

2) As I understand OOTP2006, revenue sharing is only ever a negative number - ie cash over the nominated maximum is deducted, but it doesn't go to other teams, it just disappears. Does this affect anything (eg Merchanising Revenue)?

Unless anyone has a better idea, I propose to enter Fan Interest as 50, Cash as $5M and Media Contract Years Left as 3 for each team. Otherwise the third sheet on the spreadsheet has what I understand your work suggests for the other data.

Any comments appreciated.

aewin · 06-12-2006, 07:05 AM

p212 "baseball owners, whose revenue ... [was] ... $4.27 billion in 2004"

p231 Table Avg Revenue 1995-2004 ($ millions), p232 TV Market Size 1995-2005 (100= League Average)
NYY 187.54, 262
ATL 134.38, 102
BOS 131.83, 155
CLE 129.09, 84
NYM 127.96, 244
BAL 125.72, 124
LAD 122.63, 175
ARI 121.13, 64
SEA 119.03, 112
COL 115.44, 59
TEX 113.33, 103
CHC 113.19, 105
SFG 106.5, 84
STL 104.73, 56
HOU 100.18, 86
TBD 92.36, 87
LAA 91.27, 147
CHW 91.08, 90
DET 84.56, 95
PHI 83.87, 130
SDP 82.64, 45
TOR 81.42, 96
OAK 75.13, 61
FLO 74.89, 95
CIN 74.55, 69
MIL 72.39, 39
PIT 72.08, 54
KCR 69.07, 38
MIN 63.36, 69
MON/WAS 55.13, 78

FN175 - ATL 2004 revenue $162M.

FN183 - an average of about $52M in gate receipts based on 2004 attendance/prices, adjusted to 2005 dollars.

I think that is most of what could be useful, although I haven't gone directly to sources referred to in the footnotes.

I recommend the book for OOTP fans.

aewin · 06-12-2006, 07:53 AM

Taking the TV market sizes from the book and dividing by 100 (league average) and multiplying by 5 (league average on 1-10 OOTP scale), I end up with ratings that intuitively seem to me more realistic than those calculated by Abu Taha:

NYY and NYM 10 highest

KCR, MIL, SDP 2 lowest

That is Yankees 5 times smallest market rather than just 2 times.

Abu Taha · 06-12-2006, 09:46 AM

Sorry about the discrepancies. Looks like I copied the wrong column from a spreadsheet I was trying something different on...

Anyway, the problem with setting the media contact to 3 years is that the computer doesn't seem to keep such changes. At least I haven't been able to get it to do so. And once the TV contracts change, then it goes back to the computers default calculations.

The other pitfall is that setting the Fan Interest to 50 will screw up the financials in the long run. Doing that will artificually increase good team's revenue.

This is why: Merchandizing in the game is Mercandizing multiplied by Fan Interest. If Fan Interest decreases 1%, then merchandizing will also decrease 1%. So if Boston gets 62 million in Merchandizing and increases its fan interest to 100, it will have 124 million and blow the whole scheme.

I suggest setting fan interest to something close to what we think it really is in the game. I worked out a formula that takes Gate/ Attendance to get an average ticket price. I then divided each teams ticket price into the league average ticket price to get % above and below mean and multiplied that to get true attendendance revenue for an OOTP world (where the $15 price is sticky; in the real world ticket prices hover between $15 and $48 according to my calculations). I then multipled the percentages I got times 60 to get Fan Interest for each team.

Unfortunately, in the game, Fan Interest is set at 50 for an average so I'll have to do it again. But I think this will be the best way to set fan interest. This will work great for attendance but not as good for Merchandizing (where some teams are pretty well maxed out). For example, Atlanta has low attendance but performs well. If Fan Interest is initially set to its actual level to mimic their attendance figures, the game will increase Fan Interest just because Atlanta wins. The reality is that no matter how well they do, they are not going to draw many more fans.

I am hoping that lower Fan Loyalty makes attendance sticky up and free down, while high Fan Loyalty works the opposite way. That will keep teams like Atlanta from pumpin their money up just by continueing to perform the way they are performing.

I am still thinking of a work around on the issue of being unable to set years for TV contracts.

Final note, I looked into the TV market sizes as indicators of market size and dont think they work. The problem is that it doesn't reflect median incomes in a given city. So San Diego might be small in terms of TV, but its citizens have schloads of money (just look at cost of living calculators and real estate prices). So San Diego can pump more money from a smaller population than Detroit can from a larger one. The thing that corralated best for me when comparing revenue to market size was metropolitan area.

Abu Taha · 06-12-2006, 11:10 AM

Revenue Sharing in this game occurs when you exceed the cash maximum. If its at 10 million, anything you earn above that goes to a general pot.

In real life, Revenue Sharing is based on, well, revenue. I am playing with it turned off. If I use revenue sharing, I'll do it myself, by hand and adjust merchanidzing down for payors, and add cash for payees.

BTW, MLB uses 34% of local revenue plus a separate pot. The pot is the total amount added above average for payors multiplied by .4106. Teams pay in to that pot based on how much they've been above average for the last three years and recieve money based on how much they've been below average for the past three years.

To simply things, 40% seems to work pretty well as a general pot division. Thats what I plan to do.

aewin · 06-12-2006, 10:54 PM

Do you want to have a go at completing sheet 3 on the spreadsheet and posting it so your suggested data for the team editor is all easily accessible in one place?

BTW - I may be wrong about OOTP revenue sharing - I just came across a team with a +ve number for revenue sharing.

06-11-2006, 06:57 AM	#1
Abu Taha Minors (Rookie Ball) Join Date: Jun 2006 Posts: 33	Abu Taha's 2006 Financials Okay, I did some research using the Forbes lists for the past several years and a bunch of other sources. I looked at Metropolitan area, and Nielson TV markets, attendance and past performance to come up with what I think is a pretty accurate picture of 2006 MLBs finances. I started with Forbes and calculated how much each team had to spend on players and personell if you take out non-player costs (the average MLB non-player cost was 54 million and it was not corrolated to market size). From there I subtracted Attendance Revenue based on 2005 attendance multiplied by 15 dollars. Next I calculated Market Size and Fan Loyalty. For Market size, I just went with metropolitan area. MLB cities are pretty big, so the lowest is 5; this is easy to tinker for anybody that feels like it. Fan Loyalty was a little more complex. First, I looked at Gate Revenue divided by metropolitan area. The idea isn't to find what team's fans are the most passionate but who puts the most money per capita in their team's coffers, depending on how their team is doing. I think this is as good a definition what the game does with Fan Loyalty as any. To figure out who had the best Fan Loyalty, I looked over performance for the past 5 years and compared performance to average per capita gate. Based on performance, I divided the teams into 3 categories: Perenial losers, Perenial winners and Mixed. There was a definite distinciton in the average per captia gate that corralated to performance (and didn't corralate to market size, as one might expect). In each category of teams, I divided indivual per captia by the group average to get relative fan loyalty. St Loius was by far the best; Florida was by far the worst. (For large teams like NYY, I capped population at 6.7 million.) Using Fan Loyalty, expanded Neison Markets and Market Size, I calculated expected Media Revenue. It looked pretty accurate (for example TEX came in at 25.5 and news sources say their local TV revenues are at 25 million). I subtracted that from the total and whatever is left I called Merchandizing. This way, teams like Boston - who have lower attendance due to a small stadium but still rake in the dough - come up with really high and stable merchandizing revenue, while teams in the opposite situation (Angels) don't. Finally, I used NY Times calculations of revenue sharing to figure out what percentage of each team's incomes was due to revenue sharing, and multiplied that percetnage against my player budget numbers. I added cash to teams recieving Revenue Sharing (subtracting from Merchandizing) and added to Merchandizing for those contributing. Anyway, this is what I came up with. Last edited by Abu Taha; 06-11-2006 at 07:30 AM.

06-12-2006, 07:05 AM	#10
aewin Major Leagues Join Date: Jan 2006 Location: Perth, Western Australia Posts: 446	Selected figures from Book p212 "baseball owners, whose revenue ... [was] ... $4.27 billion in 2004" p231 Table Avg Revenue 1995-2004 ($ millions), p232 TV Market Size 1995-2005 (100= League Average) NYY 187.54, 262 ATL 134.38, 102 BOS 131.83, 155 CLE 129.09, 84 NYM 127.96, 244 BAL 125.72, 124 LAD 122.63, 175 ARI 121.13, 64 SEA 119.03, 112 COL 115.44, 59 TEX 113.33, 103 CHC 113.19, 105 SFG 106.5, 84 STL 104.73, 56 HOU 100.18, 86 TBD 92.36, 87 LAA 91.27, 147 CHW 91.08, 90 DET 84.56, 95 PHI 83.87, 130 SDP 82.64, 45 TOR 81.42, 96 OAK 75.13, 61 FLO 74.89, 95 CIN 74.55, 69 MIL 72.39, 39 PIT 72.08, 54 KCR 69.07, 38 MIN 63.36, 69 MON/WAS 55.13, 78 FN175 - ATL 2004 revenue $162M. FN183 - an average of about $52M in gate receipts based on 2004 attendance/prices, adjusted to 2005 dollars. I think that is most of what could be useful, although I haven't gone directly to sources referred to in the footnotes. I recommend the book for OOTP fans. Last edited by aewin; 06-12-2006 at 07:35 AM.

06-12-2006, 07:53 AM	#11
aewin Major Leagues Join Date: Jan 2006 Location: Perth, Western Australia Posts: 446	Market Size Taking the TV market sizes from the book and dividing by 100 (league average) and multiplying by 5 (league average on 1-10 OOTP scale), I end up with ratings that intuitively seem to me more realistic than those calculated by Abu Taha: NYY and NYM 10 highest KCR, MIL, SDP 2 lowest That is Yankees 5 times smallest market rather than just 2 times.

06-12-2006, 09:46 AM	#12
Abu Taha Minors (Rookie Ball) Join Date: Jun 2006 Posts: 33	Sorry about the discrepancies. Looks like I copied the wrong column from a spreadsheet I was trying something different on... Anyway, the problem with setting the media contact to 3 years is that the computer doesn't seem to keep such changes. At least I haven't been able to get it to do so. And once the TV contracts change, then it goes back to the computers default calculations. The other pitfall is that setting the Fan Interest to 50 will screw up the financials in the long run. Doing that will artificually increase good team's revenue. This is why: Merchandizing in the game is Mercandizing multiplied by Fan Interest. If Fan Interest decreases 1%, then merchandizing will also decrease 1%. So if Boston gets 62 million in Merchandizing and increases its fan interest to 100, it will have 124 million and blow the whole scheme. I suggest setting fan interest to something close to what we think it really is in the game. I worked out a formula that takes Gate/ Attendance to get an average ticket price. I then divided each teams ticket price into the league average ticket price to get % above and below mean and multiplied that to get true attendendance revenue for an OOTP world (where the $15 price is sticky; in the real world ticket prices hover between $15 and $48 according to my calculations). I then multipled the percentages I got times 60 to get Fan Interest for each team. Unfortunately, in the game, Fan Interest is set at 50 for an average so I'll have to do it again. But I think this will be the best way to set fan interest. This will work great for attendance but not as good for Merchandizing (where some teams are pretty well maxed out). For example, Atlanta has low attendance but performs well. If Fan Interest is initially set to its actual level to mimic their attendance figures, the game will increase Fan Interest just because Atlanta wins. The reality is that no matter how well they do, they are not going to draw many more fans. I am hoping that lower Fan Loyalty makes attendance sticky up and free down, while high Fan Loyalty works the opposite way. That will keep teams like Atlanta from pumpin their money up just by continueing to perform the way they are performing. I am still thinking of a work around on the issue of being unable to set years for TV contracts. Final note, I looked into the TV market sizes as indicators of market size and dont think they work. The problem is that it doesn't reflect median incomes in a given city. So San Diego might be small in terms of TV, but its citizens have schloads of money (just look at cost of living calculators and real estate prices). So San Diego can pump more money from a smaller population than Detroit can from a larger one. The thing that corralated best for me when comparing revenue to market size was metropolitan area. Last edited by Abu Taha; 06-12-2006 at 09:53 AM.

06-12-2006, 11:10 AM	#13
Abu Taha Minors (Rookie Ball) Join Date: Jun 2006 Posts: 33	Revenue Sharing Revenue Sharing in this game occurs when you exceed the cash maximum. If its at 10 million, anything you earn above that goes to a general pot. In real life, Revenue Sharing is based on, well, revenue. I am playing with it turned off. If I use revenue sharing, I'll do it myself, by hand and adjust merchanidzing down for payors, and add cash for payees. BTW, MLB uses 34% of local revenue plus a separate pot. The pot is the total amount added above average for payors multiplied by .4106. Teams pay in to that pot based on how much they've been above average for the last three years and recieve money based on how much they've been below average for the past three years. To simply things, 40% seems to work pretty well as a general pot division. Thats what I plan to do.

06-11-2006, 07:45 AM	#4
aewin Major Leagues Join Date: Jan 2006 Location: Perth, Western Australia Posts: 446	This book has some recent relevant financial data: http://www.amazon.com/gp/product/046...lance&n=283155

06-11-2006, 10:03 AM	#5
aewin Major Leagues Join Date: Jan 2006 Location: Perth, Western Australia Posts: 446	Can you please run me through the column headings.

06-11-2006, 10:15 AM	#7
aewin Major Leagues Join Date: Jan 2006 Location: Perth, Western Australia Posts: 446	I got it sent to Australia and they found me!

06-11-2006, 10:21 AM	#8
Abu Taha Minors (Rookie Ball) Join Date: Jun 2006 Posts: 33	Revenue – Forbes revenue from last year. 05 Income – Money available for players based on Forbes estimates. Income – OOTP Income with all factors combined from 05. PO$- Playoff money. I adjusted the totals for this and subtracted it out separately so that CHW and HOU weren’t permanently high. Gate – This is real world 05 attendance multiplied by 15 to get OOTP estimated Gate from the prior year. Est TV- This is what I calculated local TV revenue’s to be. Orig Merch –Merchandizing. This is what left after subtracting TV and gate from Income and adding/ subtracting Revenue Sharing. RSS/ Cash – This is Revenue sharing adjusted for the OOTP world. I took the % of revenue sharing int eh real workd and applied it to Income. ADJ REV – Revenue after you calculated out revenue sharing and put in cash. BUDGET – I looked at the % of the prior years revenue each owner spent and created a Greed factor for Major League owners. I then multiplied it times ADJ REV to get a Budget for the game world. Sadly, we can’t edit the owners so there’s no way of knowing if this will work. 06 Pay- This is MLBs actual 2006 salary totals per team.

06-12-2006, 10:54 PM	#14
aewin Major Leagues Join Date: Jan 2006 Location: Perth, Western Australia Posts: 446	Do you want to have a go at completing sheet 3 on the spreadsheet and posting it so your suggested data for the team editor is all easily accessible in one place? BTW - I may be wrong about OOTP revenue sharing - I just came across a team with a +ve number for revenue sharing.