Multiple Debate Items(Salary Cap, Media Revenue, Minimum Ticket Price, Stats, Salary Retention)

[niles08]

Before anything...I just want to point out that I genuinely love this league and community that I have been lucky to be apart of now for almost 3 full years!

I was planning on this being a podcast, but I think if I write it out it's more likely to be looked at and digested. I may be completely wrong on multiple items but that's what debates are for. The presidential nominees are typically all wrong too and they get debate time on national TV, why shouldn't I get it on the BBA boards?

A lot to digest, but here are my main debates/ideas to be discussed:

1.) The bottom of the league and top of the league for revenue could/should be much closer.
2.) Media Revenue needs to be the same for each team.
3.) Eliminate the hard salary cap with penalties.
4.) Eliminate salary retention.
5.) Change ratings to a 1-5 system rather than 1-10, eliminate overall actual/potential ratings.


Supporting Document:

https://docs.google.com/spreadsheets/d/ ... sp=sharing

Proposal to change “Media Revenue”.

As General Managers in the BBA, we typically have control over most of our revenue, whether that be by placing a winning team on the field, controlling how much a seat to watch our baseball team costs for both season ticket and single gate revenue.

The controllable categories of revenue for our GM’s are:

Merchandising Revenue: This can be controlled by having popular players on your team. The more popular your players are, the more likely the jersey and other items will sell. At least I assume that’s what this is. Regardless, I think it is somewhat controlled and honestly looking at 2040 numbers, the split is only about $4,000,000 from top to bottom.

Gate Revenue/Season Ticket Revenue/Playoff Revenue: These all can be controlled by way of the above. Put a winning team on the field or don’t charge a crazy amount to watch a poor product unless money is more important than volume to you.

I am going to dive in a bit and show who had the top of each along with what their ticket prices were in 2040.

Gate Revenue:

Top: New Orleans--$37,663,191--
Bottom: Twin Cities--$16,977,390--

Season Ticket Revenue:

Top: Vegas--$49,209,282
Bottom: Hawaii--$13,700,907

Interestingly enough, New Orleans barely cracks the top 10 with $31,428,000 in season ticket revenue. Twin Cities still sits below that at #22 with $22,348,925 in season ticket revenue. I am pulling playoff revenue out when figuring “Total Revenue” looking at the revenue streams as playoff revenue is not something that every team is guaranteed and should be a bonus.

When looking at 2040 Gate/Season Ticket/Merch revenue Des Moines leads the basement with a total of $31,689,344 in total revenue. Keep in mind that New Orleans made $8 million more than this in Gate Revenue alone this season. Keep in mind as well that Des Moines had a ticket price of $8.53 compared to New Orleans $17.88. Des Moines was in the top half of the league for attendance, despite a poor product on the field in 2040.

Seattle however, despite an awfully poor showing in 2040 as well and a ticket price of $30.38, brought in nearly $56,000,000 in gate revenue, or nearly double what Des Moines was able to bring in despite Des Moines winning 5 more games than Seattle. Seattle, despite winning 66 games, finished in the top half of the league in ticket revenue.

Long story short, we can control our ticket revenue to an extent. Granted Market Size is a bit different and is a contributor in selling tickets while your club is in the cellar, however market size can also change and will rise with years of continued winning.

Fan Interest is another thing that is controllable. There have been many studies that show fan interest is only marginally affected by ticket prices. It is actually affected more by winning, and the very most by signing/extending popular players. Sign your players that are popular and watch your fan interest blossom.

The average ticket price right now in the BBA is $18(excluding Des Moines). Had Des Moines raised prices to be even league average, based on comparable teams, they would be much close to the top and the top would be closer to the bottom.

Let’s look at Wichita, who is somewhat similar to Des Moines. They have ticket prices of $16.97 in 2040, and made $50,000,000 in controllable revenue. That’s $20,000,000 more than Des Moines.

Long story short, these are franchise GM decisions that are causing revenue to be low, not “OOTP” decisions. We shouldn’t penalize those clubs that are bringing in ticket revenue by limiting what they can do with the money when it comes in.

Anyhow, moving on to why I am actually bringing all this up.

I think it’s unfair for teams to be given more money than others due to TV or Media Revenue. Is it real life? Yes. Is it fair? Probably not.

In Omaha, we received $80,000,000 from media revenue (top in the league), Hawaii gets $55,000,000, or for those with calculators $25,000,000 less. For no reason at all. Should I really have a $25,000,000 cushion over others in the league just because?

Total media revenue for 2040 for the BBA was $2,003,000,000 in 2040 which works out to an average of $62,593,750 among the 32 teams in the league. As the league becomes flush with cash and many teams wind up wish maximum bonus funds, my proposal would be to give everyone $60,000,000 in media revenue across the board or simply choose the game feature that makes everyone the same. This would bring the top down on those “top teams” and bring up the floor on those bottom dwellers.

Had everyone gotten $60,000,000 in media revenue in 2040, the league would not be completely different at first glance however I think the league stepping in and laying a “ticket minimum’s” rule would be in the league’s best interest. Not only do low ticket prices hurt the home team, they also hurt the visiting team who gets a % of the gate revenue.

If the league were to propose a $15 league minimum ticket price, revenues across the board would rise, and those teams that are currently under $100,000,000 in total revenue even with $60,000,000 in proposed media revenue would surely rise up into the mid $120,000,000 range, bringing the range from top to bottom in from a difference of about $65,000,000 to the $25,000,000 range.

But it’s still a $25,000,000 cushion for the top performing teams? It won’t always be. If those top teams fall for a few seasons it’s likely they fall down into the $140 or even $130 range quickly. Besides, that $25,000,000 is about to become useful in my next discussion of eliminating the salary cap and replacing it with a luxury tax very similar to the MLB luxury tax/NBA Luxury tax.

What I would propose is that the current $110,000,000 “hard” salary cap would become a “soft” cap. Teams are permitted to go over and truly go into “win now” mode, when they feel the time is now. However, penalties for that team going over become somewhat severe.

1st Season over: 200% the amount over $110,000,000. This means going over the salary cap by $5,000,000 would essentially cost the team $10,000,000.

2nd season over: 1st round draft pick forfeited. + 400% of the amount over $110,000,000.

3rd season over: 1st round pick + 2nd round pick + 3rd round pick + 500% of the amount over $110,000,000.

This would essentially guarantee a team isn’t going to want to be over for more than 1 season as once draft picks becomes involved it turns into a negative pretty quickly.

The penalty amount collected would be put into a pool and split among the bottom 5 revenue teams in the league equally as a “hand out” and a competitive balance payment. The money would be put into their bonus funds pool, or used to balance their cash in game if they were in the red.

The other change I would propose with this elimination of the hard salary caps is that you no longer are allowed to retain salary when trading a player. If you acquire a player, and that puts you over the cap, you’re now paying the penalty. Now of course, the team you acquired him from could send you some cash to help balance that out but you would be on the hook for the contract as no salary could be retained.

We could call this rule the “Edmonton Rule” as Edmonton had a fairly controversial payroll last season with several players on his roster who he was not paying for. This created quite the loophole in the salary cap. By eliminating salary retention yet taking the restraints off of the salary cap, this eliminates the controversy. Edmonton is over the soft cap, and knows the penalties for that and has to plan accordingly.
Last, I want to talk about ratings a little bit.

Last, while there is nothing wrong with our ratings system currently in my opinion, I would love to see a change to 1-5 system instead of the 1-10 we currently have. Better yet, a stats only rating would have me jumping for joy but I know I can’t even get that one discussed. A 1-5 system would create a greater “unknown” on batters and pitcher ratings. You don’t see many scouts go out and say this guy is a 7 batting rating. They would use the 40-80 system, which has 5 options…1-5 would be the same.

With that as well, I would be thrilled to see overall actual and potential ratings be hidden. At the very least overall. It would make drafting/free agents/trades that much more exciting if all we had were the batting/pitching ratings and potentials rather than the overall actual/potential rating. It would look very similar to stats plus actually considering we don’t get an overall/potential on stats plus for individual players.

[jleddy]

As mentioned on Slack, I'm under the weather so I can't write too much...I'll join in the fray at some point.

On that note, one thing that stood out is this: I think anytime there are "win now" incentives that come with penalties, like allowing to go over a soft cap with a repeater tax and loss of draft picks, you run the risk of GM turnover. Someone could go all-in then quit, putting the next GM in a terrible situation to dig out of. I like the concept and I think this league is very strong with little turnover, but in the same vein as not allowing draft picks to be traded, this is a risky proposition in an online league to say the least.

Nice write-up, Justin...looking forward to reading some civil discourse and debates. I still think this would be a great topic for an open forum podcast.

[RonCo]

Des Moines is an interesting extreme case. If ed raised prices as you suggest, I think his revenue stream would crash. When he dropped prices a ton, he started selling out games, and his fan interest jumped bigtime.

I am not a fan of mandated ticket prices.

[niles08]

Des Moines is an interesting extreme case. If ed raised prices as you suggest, I think his revenue stream would crash. When he dropped prices a ton, he started selling out games, and his fan interest jumped bigtime.

I am not a fan of mandated ticket prices.

What is the difference between Des Moines and Charlotte or Des Moines and Seattle or Des Moines and Portland? The market size is the same for all. Des Moines brings in 700,000 more in attendance annually(8,500 a game roughly)...Yet brings in $9 million less in revenue annually from ticket sales.

Charlotte won 48 games in 2040, and Des Moines was halfway formidable.

Vancouver actually has lower "fan interest" than Des Moines and still managed $8,000,000 more in ticket sales with $19 tickets for each game! Des Moines literally had double in attendance and was still way under in revenue. Besides, we get a portion of that money for our teams, so why should we be penalized revenue wise by other teams horribly low priced games. I am curious how much of Des Moines gate revenue actually came from away games.

Des Moines(or anyone if your looking for ideas) also could resign some of the popular players to one year deals rather than go to arbitration with them, and you get a bit of fan interest bump there...

[RonCo]

Fan interest and fan loyalty. Expansion teams start very high. Des Moines looks like they will make a couple million more in revenue this year than last, and will finally see a budget increase in 2042.

[RonCo]

I've been studying this for several seasons. It's my opinion that's its very difficult to use one example as a proxy for another.

[niles08]

I've been studying this for several seasons. It's my opinion that's its very difficult to use one example ad a proxy for another.

Ic. Yes, I know you've been studying all kinds of stuff and honestly I am looking for some of your opinions on these because it's a respected opinion from not only me but the entire league. Basically, It wouldn't be a debate worth having if you weren't in it.

So if a "minimum ticket price" isn't a good solution, what is? How do we help those like Des Moines come closer to the top or how do we help those teams that are up there and stop preventing their GM from going "win now" when they approach the cap. We see it every year in real life, teams go all in. They pay a luxury tax penalty similar to what I promoted.

The Media Revenue being even helps the revenue shift some from top to bottom and even it out a bit, but it's not the end all answer. Do we consider a tax on going over the cap? The tax would not only lower top teams revenues, but actually raise lower teams revenues. In turn, I believe that moves their budget up since budget increases are typically because of revenue increases. The penalties also prevent a team from doing it all the time or very crazy.

What I am trying to do is look for a feasible solution to help the teams who are on the bottom of the revenue pool compete with those who are at the top. The salary cap is in place to prevent that from growing even more, however a tax would put that in place even further by shifting those teams even closer.

I have been around 10 years now, and I think the teams who are on the bottom of the revenue pool have pretty much been there each season...

[RonCo]

Some thoughts, to start with on why I'm not a fan of controlling ticket prices.

I thought I did another post on how the mega-push to raise prices didn't work that well for some teams, but I haven't taken time to find it again.

[RonCo]

I have been around 10 years now, and I think the teams who are on the bottom of the revenue pool have pretty much been there each season...

It is not true that the top revenue teams ten years ago are the same as they are now.

• SFB was near the bottom as late as 2033 and is now upper third, but will be falling soon.
• OMA was bottom third in 2031 and 2032 before rising.
• CHI (HNT) was at the top 2 or 3 as late as 2032, and is now mid-pack
• MNT was top 4 or 5 and is now in the bottom third.
• SA was near the bottom in 2030, and is now mid-pack.
• LBC is the same profile as SA.
• RCK was bottom five in 2032, and has now risen to the upper regions.
• VAN was upper quartile at the beginning of the decade, and is now at the bottom--but will be rising.

----

I can go on. Yes, there are some teams who have been mired in the bottom and some that have been able to stay at the top in revenue creation, and yes, I think we should standardize media contracts. But, no, we do not have some kind of institutional barrier (beyond that) that is keeping teams from improving themselves when it comes to the ranking of revenue generators.

[RonCo]

Salary Cap/Soft-Cap: On the whole, the idea of making the salary cap some kind of soft cap specifically to enable more "win now" kinds of behavior is interesting, but probably more trouble than it's really worth. We already have to manage the cap a bit outside the game, and we do it poorly because it's a manual thing...and because...well, we're people who don't do this as a fulltime job. We fall down or make mistakes. Shrug.

Personally I'm happy to make the league more complex by giving GMs more tools, but I completely understand that most of the league prefers something simplified...there is no "right" or "wrong" here, IMHO...just what kind of league we want. I'd much rather keep the band together than make a rule that others don't like.

[drummerJ99]

I'll be the first to admit I'm not smart enough when it comes to OOTP and how it works (first version I've played for more then about 20 hours) to write a super detailed reply. Lol

1.) I agree, in theory anyway. If it's easy to do, no clue.
2.) Again, I agree.
3.) This I disagree with. I've always hated MLB's luxury tax and always prefer a full blown salary cap for, just like every other pro sport.
4.) Again I'll disagree with. But it doesn't really bother me either way. With it on, just another tool in the toolbox for Gm's to use to make moves.
5.) Highly disagree with eliminating overall and potentials. I'm not smart enough to look at a player without that and tell how good he is or should be. I'm not a fan of Stats Only leagues.

[RonCo]

Salary Retention: I admit I've never been a big fan of retention in the first place, but those who wanted it seemed fervent in their desires. I want to say they were arguing that salary retention would help rebuilding teams because they could essentially sell their cap space--which, for example, is what Madison did (and got three pretty good cheap pitchers while doing it...I mean, everyone is bitching about Madison paying for Raider, but no one is talking about 21 yo Declan Hounsel who is putting up 2.4 WAR on the cheap for Madison--received with one of those pitchers from trading Dalrymple later).

On a raw value basis, Madison probably got the "worth" of their salary cap dollars in return. They weren't winning now anyway...but I digress.

I don't like retention for the social issues it raises. We have a hard enough time agreeing on the value of 18 year olds in the IC, better yet the value of cap space in the middle of a pennant run. On the other hand, personally its more a "shrug" thing to me. At the end of the day, it's not being used a whole lot anyway. Of course, if four or five bottom dwellers all decided to give away "free" resources at the same time, I could see revolution in the air.

[RonCo]

Locking Down Media Revenue: This is a good idea, and, to be honest (and maybe say too much?), has already been voted on and approved by the board some time ago in principle. It's really just a question of how/when to implement it. Issues we've been considering:

1) Its more complex to enact than changing a simple setting. So Matt will need to do a bit of work
2) We need to decide _exactly_ what the contracts should be
3) I think we will want to give at least a season's notice because teams currently over the media contract will receive a direct budget hit...so there's something to plan for.

Regardless, Matt can slap my hand for speaking outside school, but I suspect it will come semi-soon.

[RonCo]

Ratings Changes:

I think the league is barely settled from the move to relative and 20/80 overalls. So I'd not recommend any changes, again, mostly for social reasons. I think the idea of removing overalls is fun in theory but hard for a robust online league in practice (you know I love stats-only, but we're a big messy league and I think the stats-only approach is for smaller groups of super-hard-core guys).

To be honest, for my personal enjoyment, I don't really care what ratings system we use. I manage my minors mostly based on stats anyway...though it's nice to have the visual cues of ratings numbers to remind me of certain things. 1-5 would be fine with me. Or 1-8, or full raw values. The dev engine and wild aging curves around here changes them often enough that even if you know the "true" ratings, you don't know enough about the future to make anything certain...in fact, in the very long ago days when I played solo, I always used full ratings.

Ultimately, though, it's probably fair to say that the 1-5 rating scale would play to my personal advantage because I think I'm more comfortable with the uncertainty of what's happening under the hood than most. But who knows?

So, yeah. Whatever.

I think the league is better off staying where it's at for another half decade or so before making any other major ratings upheaval, though.

[indiansfan]

As I said on Slack, I'm 100% for equalizing the media contracts. If this can be done with a settings change great. If it is a manual thing that Matt has to do well I'm not for putting any more on his plate. If there is concern about putting it in place too abruptly then it could be phased in, but this would require a 1 season of Matt manually adjusting them. So the bottom teams could get bumped to the $60 mil or whatever and the top teams taken down over 2 seasons. So Omaha would go from 80 to 70 to 60.

I normally have one of the top 3 or 4 media contracts and I have no problem bumping it in 1 season. For me that money is just going to the owner at the end of the season.

Regarding the salary cap, that sounds like a lot of out of game work.

I like salary retention. I think it gives another aspect to the game. Edmonton played by the rules and made a deal for Raider that worked out. If I recall Raider was on the block for awhile so everyone else had a shot too. And as pointed out earlier, the deal made sense for Madison. If there are a lot of GM's that think the retention could get out of hand, then instead of eliminating it we could cap it at 50%. However, I prefer to leave it as is.

Another idea to help struggling teams could be a luxury tax of sorts where the top 5 (or whatever number) teams in profit pay a tax of a few million and the money goes to the teams at the bottom.

[recte44]

You are all aware that we have Gate Revenue Sharing already, right?

[RonCo]

Yes, and that helps. The gate sharing is included in the numbers above.

[RonCo]

And gate sharing is more valuable than straight revenue sharing, because it goes straight to next year's budget, whereas straight sharing is just a big chunk of cash...

[recte44]

Yup

[bcslouck]

1) Its more complex to enact than changing a simple setting. So Matt will need to do a bit of work

Is it? From what I've seen, it's as simple as setting the revenue for the team and just maxing out the contract time. It'll take a half hour (tops) to do once.

As for 2, I'm fine with giving a notice and I'd say just average out what they are league wide now and go from there.