OOTP5 Financial FAQ Part One - Arbitration Made Easy

asamford · 03-10-2003, 07:19 PM

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 .400 studios 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.

OF - SAM HESSER
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.

John · 03-10-2003, 07:41 PM

outstanding article... can't wait for part 2

fasteddie_21 · 03-10-2003, 07:42 PM

Definitely need this in the FAQ area. Great job...thanks for all the folks who this will help

chippered · 03-10-2003, 07:52 PM

Nice job!

YoungEagle · 03-10-2003, 08:01 PM

Excellent read, really spells it out clearly. This should be an immense help to the whole community.

BFats · 03-10-2003, 08:09 PM

thanks explains everything cleary

smeyers003 · 03-10-2003, 08:35 PM

Nice job of taking the confusion out of arbitration

Cooleyvol · 03-10-2003, 08:41 PM

Markus/Steve/Joe/Scott,

This needs to be in the game's manual...........

Andy,

Superb explanation!!

A.J. Holz · 03-10-2003, 08:47 PM

Andy rocks!

Lessee...copy...paste...save...memorize.

Thanks!

jammincrowe · 03-10-2003, 09:27 PM

VERY WELL DONE.. thanks !

Dargone · 03-10-2003, 09:37 PM

Great job

Neuqua458 · 03-10-2003, 09:43 PM

Andy = MVP

ey215 · 03-10-2003, 09:56 PM

This is just bloody brilliant!

KUTGW!

magicmike · 03-10-2003, 10:29 PM

Thanks thanks thanks!

spleen1015 · 03-10-2003, 10:34 PM

Very good work Andy!

MTXperience · 03-10-2003, 11:00 PM

So this thread doesn't degenerate into backpatting for Mr. Samford let me just point out that the Aces need to do quite a bit of recovering if they are to show the promise they did in their expansion year.

Of course I kid Andy... the Padres suck more than anyone.

DaleReeck · 03-11-2003, 12:05 AM

Quote:

Originally posted by asamford
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.
[/B]

Speaking of this, this really needs to be fixed in the game. My favorite is when the player says "let me hear your offer". So, now, not only do we have to mind read the computer player, but, if we don't guess his salary demand within a few tries, he gets pissed off to the point where he won't sign or requires a super high salary. Very unrealistic in my opinion.

A player should always have a figure in mind, it shouldn't be a secret. Or, if he doesn't specifiy a number, then what would be really cool is a counter offer button, like the trade screen has. You make an offer, he offers something different, then you counter offer, etc. Much more realistic in my opinion. Usually, as long as a player doesn't refuse to play for you outright, an owner and a player can usually come to an agreement, as long as the team is willing to pay. But that isn't represented here currently.

Aussie Mark · 03-11-2003, 12:32 AM

Great job Andy!!

Charlie Hustle · 03-11-2003, 12:42 AM

Great read!

I've been lurking here and playing OOTP since v2, and this is one of the most useful and worthwhile posts I can remember.

Can't wait till the next installment.

Carlton · 03-11-2003, 01:45 AM

Excellent work Andy

03-10-2003, 07:19 PM	#1
asamford Banned Join Date: Dec 2001 Location: Snellville, Georgia Posts: 1,769	OOTP5 Financial FAQ Part One - Arbitration Made Easy 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 .400 studios 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. OF - SAM HESSER 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. Last edited by asamford; 03-10-2003 at 07:55 PM.

03-10-2003, 07:42 PM	#3
fasteddie_21 Minors (Triple A) Join Date: May 2002 Location: Greenville, SC Posts: 220	Definitely need this in the FAQ area. Great job...thanks for all the folks who this will help __________________ "That wasn't crying, Felix. That was a warning!"

03-10-2003, 08:47 PM	#9
A.J. Holz All Star Reserve Join Date: Apr 2002 Location: Atlanta, GA Posts: 650	Andy rocks! Lessee...copy...paste...save...memorize. Thanks! __________________ NABA - Tijuana Toros / Commish ORB - Oakland Athletics (former owner) MBBA - Seattle Storm JOBL - Grand Forks Varmints (former owner) FIBB - Chicago Fire TMBU - Tulsa Tomcats (former owner) ACL - Oakland A's (former owner) ACB - Rockville Superbas

03-10-2003, 09:27 PM	#10
jammincrowe Minors (Rookie Ball) Join Date: May 2002 Location: MA Posts: 45	awesome VERY WELL DONE.. thanks !

03-10-2003, 09:37 PM	#11
Dargone Hall Of Famer Join Date: Feb 2002 Location: Interwebs Posts: 2,862	Great job __________________ I was never one to patiently pick up broken fragments and glue them together again and tell myself that the mended whole was as good as new. What is broken is broken -- and I'd rather remember it as it was at its best than mend it and see the broken places as long as I lived.-Margaret Mitchell

03-10-2003, 07:41 PM	#2
John Minors (Double A) Join Date: Mar 2002 Location: Pittsburgh PA Posts: 186	outstanding article... can't wait for part 2

03-10-2003, 07:52 PM	#4
chippered Minors (Double A) Join Date: Nov 2002 Posts: 191	Nice job!

03-10-2003, 08:01 PM	#5
YoungEagle Major Leagues Join Date: Mar 2002 Location: Wayne, MI Posts: 364	Excellent read, really spells it out clearly. This should be an immense help to the whole community.

03-10-2003, 08:09 PM	#6
BFats Minors (Rookie Ball) Join Date: Apr 2002 Location: Queens, NY Posts: 38	thanks explains everything cleary

03-10-2003, 08:35 PM	#7
smeyers003 Major Leagues Join Date: Mar 2002 Location: Rochester, NY Posts: 416	Nice job of taking the confusion out of arbitration

03-10-2003, 08:41 PM	#8
Cooleyvol Hall Of Famer Join Date: Dec 2001 Location: Union City, TN Posts: 6,383	Markus/Steve/Joe/Scott, This needs to be in the game's manual........... Andy, Superb explanation!!

03-10-2003, 09:43 PM	#12
Neuqua458 Minors (Rookie Ball) Join Date: Jun 2002 Location: Chicago Posts: 33	Andy = MVP __________________ RWBL Chicago Cubs JBL Nippon Ham Fighters BL2 Tampa Bay Devil Rays

03-10-2003, 09:56 PM	#13
ey215 All Star Reserve Join Date: Oct 2002 Location: Woodstock, GA Posts: 581	This is just bloody brilliant! KUTGW!

03-10-2003, 10:29 PM	#14
magicmike Major Leagues Join Date: Dec 2002 Location: Hawaii Posts: 365	Thanks thanks thanks! __________________ aloha and mahalo HCBL Kansas City Royals 2003 AL Central Champs SMLB Houston Astros VLB Anaheim Angels UBL Pittsburgh Pirates "Barry Bonds? I'll tell you what, if he hit a home run off (Bob) Gibson or (Don) Drysdale and stood and admired it, they'd knock that earring out of his ear the next time up." - National League Umpire Doug Harvey

03-10-2003, 10:34 PM	#15
spleen1015 Hall Of Famer Join Date: Jan 2002 Posts: 6,005	Very good work Andy!

03-10-2003, 11:00 PM	#16
MTXperience Major Leagues Join Date: Mar 2002 Location: St. Louis, MO Posts: 372	So this thread doesn't degenerate into backpatting for Mr. Samford let me just point out that the Aces need to do quite a bit of recovering if they are to show the promise they did in their expansion year. Of course I kid Andy... the Padres suck more than anyone.

03-11-2003, 12:32 AM	#18
Aussie Mark Major Leagues Join Date: Dec 2001 Location: Downunder Posts: 489	Great job Andy!! __________________ Cheers Mark

03-11-2003, 12:42 AM	#19
Charlie Hustle Minors (Rookie Ball) Join Date: Mar 2003 Location: Chillicothe, OH Posts: 39	Great read! I've been lurking here and playing OOTP since v2, and this is one of the most useful and worthwhile posts I can remember. Can't wait till the next installment.

03-11-2003, 01:45 AM	#20
Carlton Hall Of Famer Join Date: Mar 2002 Posts: 3,765	Excellent work Andy __________________ "I am at that stage of my life where I keep myself out of arguments. I am 100% self sufficient spiritually, emotionally & financially. Even if you say 1+1=5, you are ABSOLUTELY CORRECT. Enjoy!"