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Author Topic: Several proposals  (Read 1235 times)

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Offline Chuck Junkins

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Re: Several proposals
« Reply #15 on: May 17, 2017, 08:12:49 PM »
Whatever you think is best. Keep up the good work, and find more owners for the CPU teams.

Chuck

Harley

Offline Berkshire_JJ

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Re: League Finances
« Reply #16 on: June 09, 2017, 04:34:07 PM »
Since this concern was raised again in the sidebar, I figured I'd weigh in. Apologies that it’s a bit long winded – I’m laid up with a back injury and am bored out of my mind.

It appears the main reason for the contract inflation we're seeing is the amount of cash each team has available. My understanding is that a team can remain in the red for its annual budget indefinitely so long as there's enough cash on hand to cover the shortfall (though not explicitly stated, this appears to be confirmed here and here).

Taking a quick glance at the league's financial report, all but three teams have a cash balance in the black, and a significant number are actually sitting at the $1.75M limit. Given that the average payroll in the league is roughly $2.15M, each team’s buying power in a given season could be nearly doubled depending upon rollover from previous years. I believe this is what Bacardi has (legitimately) leveraged for his FA shopping spree.

In theory, this kind of spending in a single offseason will result in a budget crunch in subsequent years as a team’s cash balance dwindles. However, the financial data that I’m privy to doesn’t suggest that this is happening with any regularity (granted, I’m new to the league so it may be that the current financials are the exception rather than the rule).  I’m guessing this is due to conservative spending for the Charlie-O (looking at you Ajax) and/or the current revenue baselines.

From my standpoint, the best way to combat the salary inflation we’re seeing in FA is pursue one (or more) of the following solutions:

  • Reduce the Cash Maximum: This seems like a no brainer since the current limit is over 80% of the league’s average payroll, and this seems to be the largest contributing factor in skewed FA contracts. I think cutting the cap in half to $875K would be a good starting point to see whether things normalize. But we may have to decrease the number limit over time so as not to penalize Bacardi (and others I assume) for playing within the current rules.
  • Reduce Media Revenue Baseline: I’m honestly on the fence since the current baseline seems reasonable on the surface (40% league’s average payroll), and MLB media revenues in 2016 (found here) clocked in at roughly 44% of 2016 MLB payrolls (found here). So the current CLB figure seems to be right in line with where it should be. HOWEVER, CLB is living in the 1960s and I can’t imagine media revenue comparing so favorably to payroll at that point in time (too lazy to research). I think a legitimate argument could be made either way.
  • Reduce Merchandizing Revenue Baseline: If anything, I think this should be raised a touch since the current value is only 7% of the league’s average payroll. But either way, I don’t think it’s impacting team finances to any great degree.
  • Change ‘Team Owner Controls Budget’ Setting: I literally just noticed that this is set to ‘No, entire revenue available’ which combined with the high cash max is almost certainly why spending isn’t being kept in check by the game. I’m pretty sure the entire cash balance is available each year because of this setting, and that the owner would be enforcing the team’s annual budget if this was toggled on (details here). I personally favor my suggestion in #1 to lower the cash max over time to help regulate spending, but flipping this setting on could be a quick fix.

That’s all I’ve got – hopefully it made for some interesting and informative reading (assuming you made it this far). Looking forward to further conversation as we decide on next steps!

Bump.

Offline Ajax

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Re: Several proposals
« Reply #17 on: June 09, 2017, 09:46:06 PM »
I agree with you that the problem is too much relative cash to average salary.  Although note that most of the league suggestions trend the other way towards increasing incomes.

I think the simple solution is to increase league minimums and player salary expectations so that a full team of min salary players uses 1/2 to 2/3 of the income.  that drives the discretionary spending for higher salary players down to a reasonable amount.

I would suggest stepping up the minimum each year by 5K until we reach equilibrium.

 

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