Bonus Fund Uses

[niles08]

I have been around long enough now that I like to think I am beginning to be considered a "veteran", and then I get to the point like this where I am clearly a rookie.

I have 38,000,000 in bonus funds and am unsure exactly what I can or should spend bonus funds on.

Here is what I know of as possibilities:

Renovate ballpark
Convert to cash(while remaining below $120,000,000 budget)

It looks like you could theoretically use your bonus funds to cover when your over the cap. Although this may be frowned upon I assume? My thinking is if your $10,000,000 over the cap it would be $10,000,000 divided by the number of sims(25?), that would be $400,000 multiplied by 5 per sim subtracted from your bonus funds which is $2,000,000 per sim in bonus funds lost. If you have 25 sims in a season, that is $50,000,000 in bonus funds lost leaving you with -10,000,000 in bonus funds assuming you had 40,000,000 to begin with. I would assume you would have a nice surplus at the end of the season in cash to pay for the bonus funds negative number. Once again, I don't endorse this, but something I think could be done as almost a "luxury tax" type system.

I don't know of any others so I am hoping that you can guide me in the other possibilities.

Also, is there any discussion worth having on adding other possibilities? I don't know of any off the top of my head that would make great sense, but I think it would be worth a discussion or brainstorming of ideas on the board to see if any are knock-out ideas?

The only things I can come up with:

Funds can be used for game-day promotional giveaways($1,000,000 in funds results in 1% fan interest boost, maximum of $10,000,000 per season. If a full $10,000,000 is used one player gets a 1 spot bump in local popularity. This is assuming the promotional giveaways were jerseys or such of his).

I know we can convert PP to Cash, but what about converting bonus funds to PP? $1,000,000 in bonus funds=1 PP?

[agrudez]

It looks like you could theoretically use your bonus funds to cover when your over the cap.[/fieldset]

No, nothing lets you play over the cap (short of ethically questionable contract terms or loading up on retained salary trades). The cash to budget reward is primarily for teams whose budget is below the cap and they want to spend to the cap. The entire point of bonus funds was that long, long ago in a galaxy far, far away money didn't matter in this league. There were teams with literally hundreds of millions of dollars in cash on hand. That was a significant problem, but we thought it'd be too jarring to take it ALL away, so we let teams keep up to 40M apiece. Then, we made things like stadium maintenance fees, et al. to drain it more on a recurring schedule.

For the current moment, think of bonus funds as a "rainy day" fund. It's sitting there - largely unusable (beyond stadium related things) - waiting for you to have a really shitty season that causes you to hemorrhage profit. When that happens, you can bring your bonus funds in game to max out your cash on hand and keep the train on the tracks. Some other potential uses:

Raising your draft budget
Raising your scouting budget
Spending more in IFA
Spending more on coaches
Renovating your stadium
Adding seats to your stadium
"Buying out" a player (ie. cutting them so they come off your cap and paying their salary in a lump sum)

[niles08]

It looks like you could theoretically use your bonus funds to cover when your over the cap.[/fieldset]

No, nothing lets you play over the cap. The cash to budget reward is primarily for teams whose budget is below the cap and they want to spend to the cap. You could use it to up your draft budget, spend more in IFA, spend more on coaches, up your scouting budget, etc., too, though.

The entire point of bonus funds was that long, long ago in a galaxy far, far away money didn't matter in this league. There were teams with literally hundreds of millions of dollars in cash on hand. That was a significant problem, but we thought it'd be too jarring to take it ALL away, so we let teams keep up to 40M apiece. Then, we made things like stadium maintenance fees, et al. to drain it more on a recurring schedule.

For the current moment, think of bonus funds as a "rainy day" fund. It's sitting there - largely unusable (beyond stadium related things) - waiting for you to have a really shitty season that causes you to hemorrhage profit. When that happens, you can bring your bonus funds in game to max out your cash on hand and keep the train on the tracks.

I would disagree with your statement that says "nothing lets you play over the cap". Heading into the off-season I had a projected payroll for 2038 of $120,000,000. Had I not done anything, I would be $10,000,000 over the cap when the season started. According to the constitution, I would have a penalty as described above for each sim, and could theoretically have fit it in without worry but it would have just drained my bonus funds and caused some commotion. No bigger commotion however that the guy who changed his players from position to pitchers before the rule 5 and expansion draft

[agrudez]

Hm, you're right. I remembered there being verbage that insinuated prolonged time over the cap would result in commissioner intervention, but that is actually in an unrelated section of the constitution:

"•Contracts: It is the responsibility of GMs to police themselves regarding contracts acquired via trades. Teams that exceed the Salary Cap due to a trade will be notified of the violation and have one sim to adjust or the Commissioner will make a move that will get the team under the Salary Cap."

So, if you make a trade that puts you over the cap, the commissioner gives you one sim to fix it before he starts cutting players from your roster (which is, rightfully, pretty draconian). If you willfully go over it via offseason moves, you can just pay a cash penalty every sim (which is, wrongly, pretty minor). That should probably be cleaned up in the constitution - the intention seems that the former would also apply to the latter, but it isn't spelled out explicitly.

[niles08]

I agree...I am just looking at ways to spend my bonus funds lol. I pretty routinely have quite a stash there and even this season with a high payroll still had a huge end of balance for the season. Seem's like that money could be used for something else.

I would imagine removing the salary cap(or having a luxury tax on it), would help ease most teams bonus funds. Say cap is $110,000,000 but after $110,000,000 for the season you are charged $1,000,000 in bonus funds for every $500,000 you are over...So those teams that finished with a team payroll of $115,000,000 would owe $10,000,000 in bonus funds or something.

Just thinking out loud.

[agrudez]

I would imagine removing the salary cap(or having a luxury tax on it), would help ease most teams bonus funds. Say cap is $110,000,000 but after $110,000,000 for the season you are charged $1,000,000 in bonus funds for every $500,000 you are over...So those teams that finished with a team payroll of $115,000,000 would owe $10,000,000 in bonus funds or something.

The whole point of a cap is to try to level the playing field between the 'haves' and 'have nots'. Your proposal would take an axe to league parity. Rockville generated 165M last season in revenue. Under your proposal they could operate at a ~130M payroll while still being in the black. Hawaii is set to have a 78M budget. Assuming ~10M of that is earmarked for coaches, draft, etc. that means Rockville would be able to comfortably operate a payroll 190% that of Hawaii's.

[niles08]

I would imagine removing the salary cap(or having a luxury tax on it), would help ease most teams bonus funds. Say cap is $110,000,000 but after $110,000,000 for the season you are charged $1,000,000 in bonus funds for every $500,000 you are over...So those teams that finished with a team payroll of $115,000,000 would owe $10,000,000 in bonus funds or something.

The whole point of a cap is to try to level the playing field between the 'haves' and 'have nots'. Your proposal would take an axe to league parity. Rockville generated 165M last season in revenue. Under your proposal they could operate at a ~130M payroll while still being in the black. Hawaii is set to have a 78M budget. Assuming ~10M of that is earmarked for coaches, draft, etc. that means Rockville would be able to comfortably operate a payroll 190% that of Hawaii's.

I show Rockville's revenue as $130 not $160? Rockville also had player/coach expenses of roughly $109,500,000. If we are going to compare apples to apples, Rockville's playoff money of $12,900,000 should be removed from context, so say the revenue is $117,000,000 with expenses of $109,500,000.

Hawaii made $74,606,632 in revenue and had player/coach expenses of roughly 62,000,000.

The biggest difference between the two is obviously gate revenue/season ticket revenue

Hawaii: $19,000,000 roughly
Rockville: $50,000,000 roughly

A difference of $30,000,000 in revenue. The main difference being that Hawaii drew roughly 1,750,000 less fans than Rockville during the season. It's unreasonable to think that Hawaii couldn't have drew more people had they fielded a better team. The team in 2032(who won 69 games) had 2,635,000 people watch the games, nearly what Rockville had this season so the ability to draw people is not an issue for Hawaii. They have also been in the 4,000,000 range several times during their franchise history for the season.

Hawaii's player payroll this year was $56,000,000, and could have been $75,000,000 had they signed a few "high popularity players" they would have drawn better than they did thus creating more revenue and a higher owner budget for next season.

Anyways, this would be my proposal(or a proposal lol)

I do think it would be interesting to have "competitive comp" rounds in our draft similar to what MLB currently does. We could say the lowest 5 earning revenue teams get an extra pick at the end of the 2nd round. I think it would very much so even the plane for those "low budget" teams to have an additional pick at the end of the 2nd or 3rd round.

I would also be in favor of implementing a luxury tax to anybody going over the cap as I mentioned above($500,000) for every $1,000,000 over the cap using the "player payroll" number shown at the end of the season. That money could then be turned and be split evenly among those "low budget & revenue" earning teams each year by raising their budgets that amount...

For instance say there was 5 teams in the league that were over the salary cap by a total of $29,000,000. That $29,000,000 would be split evenly($5,800,000 per team) among the lowest budgeted 5 teams in the league and added to their budget for the following season.

[agrudez]

Sorry, I looked at RCK's expenses, not revenue. Ironically, OMA actually has the highest revenue at 155M.

Anyway... I'm going to bow out of the debate now. I see your proposal and vehemently disagree with its implementation - not much more to be said on my side other than a rehash of that in my signature bloated paragraph style. Topics like this (the 'haves' exacerbating their gap from the 'have nots') have been brought up a couple times over the years and, to my recollection, Matt has been pretty consistently in favor of maintaining parity anyway.

[niles08]

Sorry, I looked at RCK's expenses, not revenue. Ironically, OMA actually has the highest revenue at 155M.

Anyway... I'm going to bow out of the debate now. I see your proposal and vehemently disagree with its implementation - not much more to be said on my side other than a rehash of that in my signature bloated paragraph style. Topics like this (the 'haves' exacerbating their gap from the 'have nots') have been brought up a couple times over the years and, to my recollection, Matt has been pretty consistently in favor of maintaining parity anyway.

Your right, I do have the highest revenue. I also have the 3rd highest ticket prices and picked up $9,000,000 in playoff revenue. My media revenue is also higher than others(but my fan interest in high and I know interest, loyalty, and market size drive this). My payroll was only $95,000,000 last season however so it's not like I am pushing for this because I am over the cap each year.

[RonCo]

I think the idea that you can decide to be over cap and bleed cash/bonus funds is an under-used part of the rules. In Justin's example ($120M payroll), the annual penalty would be $50M. So, ultimately, a team could _possibly_ play at that level for a long time, but would certainly eventually run out of cash and be forced to drop under the cap again. Teams do lose money to the ether, but it's never as much as $50M. (I think we lost something like $25M one season at our peak revenue/cost effectiveness)

I like this much, much better than the "Draconian" steps of Matt needing to cut players, but it does require an occasional check...or, I'd say that GMs choosing to take this approach on purpose should report it, and ensure their funds are being properly docked.

Ultimately, it means that rather than make a tough and controversial choice to cut players, he simply goes in and reduces cash on hand. I'll note that if this were to happen, it would substantially handcuff a team like this as the season went on, because that $20m in on-hand cash would be gone by June, and since it can't be reloaded in the middle of the season, a GM's ability to spend on miscellaneous things in the middle of the year would be degraded. I think. Dunno. Haven't really thougth about it.

But this is an esoteric element of running a BBA team that is rarely examined.

[aaronweiner]

The cap is NOT on player expenses.

The cap is on current salaries on any given franchise for that season.

Buyouts at the beginning of a season, for example, don't count against the cap. So I could have three players making $20 million per season, cut them all, sign three more, and pay double the amount while being charged for the "dead money" if you will.

That's where budget comes into play: it puts a cap on the amount of this sort of activity.

[RonCo]

The cap is NOT on player expenses.

The cap is on current salaries on any given franchise for that season.

Buyouts at the beginning of a season, for example, don't count against the cap. So I could have three players making $20 million per season, cut them all, sign three more, and pay double the amount while being charged for the "dead money" if you will.

That's where budget comes into play: it puts a cap on the amount of this sort of activity.

Exactly.

Example: If I cut Jose Chavez, I pay his $12M and it gets accounted to expenses...but that $12M is no longer assessed against my salary cap status. So I can spend $110M all year on that (bringing my expenses to $132M), without ever going over the salary cap.

[RonCo]

But, my point here is that (as Alan and some others have shown us), there are inventive ways to field a team that is actually over the cap. The penalty for that is spelled out as 5x the value you're over cap. So by that rule, a savy GM could purposely put himself over the cap and just agree to pay the penalty. It would semi-quickly drain his bonus funds, so he could only do that for a limited time. But given _that_ rule, it's a valid way to run your team.

[RonCo]

Thinking about it a little, suppose it's possible, if you can keep your revenue stream very high forever, that you could use that approach and stay $4-$5M over the cap and pay that penalty forever...but it would be a very unstable way to run the team--meaning that it would take only one season (like YS9's 2037) to make the approach collapse.