3/20/2023

Understanding American Circuits Finances in the Free Agency Era

This is basically Part II of this.

I ran some tests in OOTP. I wanted to see if it was possible to set up the league with a level fiscal playing field, i.e., every team gets the same budget every year, or close to it. Turns out OOTP doesn’t like that; for all its customizability, it refuses to bend on certain issues, one of them being that there will be rich teams and poor teams. The quick explanation for why this is the case: you can’t control attendance. No two teams are going to have the same attendance, and the teams that draw better are going to make more money. Budgets are based on revenue, so that’s that. Rich teams and poor teams.

Fortunately, by making just a few simple adjustments each season I think we can minimize the gap between richest and poorest. Instead of fabulously wealthy teams and woefully poverty-stricken teams (the OOTP programmers’ preferred scenario, apparently) we can have kinda rich teams and kinda poor teams. Most importantly, with these adjustments the kinda rich teams will have a more difficult time staying kinda rich and the kinda poor teams will have an easier time becoming not kinda poor. Well… that’s the goal, anyway. I said I ran a bunch of tests, and I did, but in my tests A.I. GMs were making the decisions for all the teams, and human GMs may bring much different results. So we may find that the adjustments I’ll be making aren’t sufficient, and will need to be tinkered with.

Please keep in mind that since OOTP is almost endlessly customizable it is very unlikely that any other online league out there that does the exact same things this one will do. So if you’re in more than one league, don’t let this article confuse you; some of what is true in this league may not—will not—be true in another.

I realize some of you probably know more than I do about how finances work in OOTP, but I’m guessing some of you know less. I don’t want anyone to be unduly handicapped because of inexperience, so we’re now going to proceed to a few “how things work” sections.

Where the money comes from

After the conclusion of the World Series, each team receives its budget for the upcoming season. The team’s budget is determined by the revenue it earned during the just-concluded season. Revenue is generated by a number of sources, but by far the most significant source is Gate Revenue (attendance). Attendance is driven by Market Size, Fan Loyalty, and Fan Interest. In a “normal” OOTP league huge gaps among the league’s teams develop in these three areas, resulting in some teams having the capacity to outdraw others by enormous margins. Here, we will periodically reset these values so that they are the same for every team.

Market Size and Fan Loyalty change slowly; in a normal league, maybe one or two teams a year will see a minor change in one or the other. But we’ll be resetting both of them at the beginning of every off-season, so they will be a non-variable in this league.

Fan Interest, by contrast, changes frequently, so we will be resetting it twice every year; once at the beginning of the off-season, and again on Opening Day. Fan Interest is driven by two things: the addition/loss of popular players and winning/losing. So during the off-season, when teams are signing free agents and making trades, Fan Interest can go up or down a lot. This affects season ticket sales, which affects total revenue.

During the season, trades/signings/releases still have an affect on Fan Interest, but the teams’ on-field performance also comes into play. Winning tends to drive Fan Interest up, losing tends to drive it down. For this reason some teams will have higher attendance than other teams, and will earn more revenue during the season. Those teams will be blessed with a more generous budget the following season.

The popularity contest

As mentioned, your team’s fans respond to two things: the gain/loss of popular players, and winning/losing. In general, this reflects real life, except in OOTP fans often seem more concerned about the popular players than about winning. Getting to the World Series will drive your Fan Interest up +5, and winning it will drive it up another +5, and that’s great; on the flipside, winning your division sometimes gets you squat, winning 100+ games sometimes gets you squat, etc. Winning, in short, helps boost Fan Interest but not that much unless you’re fortunate enough to win it all. Signing popular players can boost it a lot more, and losing popular players can cause it to plummet.

• “Extremely Popular” is better than “Very Popular”; “Very Popular” is better than “Popular”, “Popular” is better than “Well Known”, etc. The higher designation usually has a bigger impact but it’s not entirely predictable. The duration of a contract or extension (longer = better) can also have an effect but not a predictable one.
• Things that usually make Fan Interest go up:
• Trading for a popular player
• Signing a popular free agent
• Having a popular player on your team and signing him to an extension
• Winning
• Things that usually make Fan Interest go down:
• Trading a popular player away
• Releasing a popular player
• Another team signing a free agent who was most recently on your team (even if he’s been a free agent for more than a year)
• Losing
• Things that don’t affect Fan Interest:
• Declining to extend a popular player and allowing him to enter free agency (has no effect until/unless another team signs him)
• Re-signing a popular player you allowed to become a free agent (it is sometimes wise to do this if you think you can get him for less on the open market than if you gave him the extension he was asking for, but by so doing you forfeit the potential Fan Interest boost)
• Placing a popular player on the Reserve Roster
• Having a popular player retire

Now that you know all that, I advise you to not pay a great deal of attention to it, because the between-season steps I will be taking make player popularity less of an issue than it is in most leagues. Essentially, I don’t buy what OOTP is selling; I think that player popularity, while certainly not a non-issue in real life, is much less important to most fans than winning. So by resetting Fan Interest twice a year I am minimizing the effect gaining or losing popular players has on revenue. These transactions will still have some effect, but it will make less sense to prioritize getting/keeping popular players, as compared to players that will help you win.

Changes 1964–1966

Following is an explanation for each item outlined here.

League Settings

Check “Apply Gate Share to season tickets”: If this box is unchecked the home team keeps 100% of its season ticket revenue (instead of the 80/20 split for day-of-game tickets). This would be more beneficial to teams that sell more season tickets. So checking the box is a parity measure.

National Media Contract fixed?: Yes, same contract for every team: The other choice is to base it on Market Size. We reset Market Size every off-season but the media contracts are set as soon as the offseason starts, and if any Market Sizes have shifted those contracts would reflect the shift. We don’t want that.

Team Owner controls Budget?: No, entire revenue available: I’m frankly unsure of what this means. I don’t know what happens if you allow the owner to control the budget, but I’m guessing it means more randomness (some teams getting a more generous budget that they would have otherwise gotten, and some getting a less generous one).

Revenue Sharing: Luxury Tax: The other options are no revenue sharing at all, or revenue sharing based on revenue earned. Since we’re instituting parity measures, the choice here would be between punishing the more successful teams for earning money versus punishing them for spending money. I’m guessing the latter might encourage more responsible fiscal behavior. We’ll find out.

Soft Cap (% of average payroll): 120: We’re using the game’s default value here, because it seems reasonable to do so

Tax above Soft Cap (%): 20: Again, this is the game’s default value. We can raise it or lower it later if Luxury Tax seems to be having too little or too large an effect.

Player Dev. Budget Baseline: $0: Setting this to zero eliminates the player development budget. One less thing for GMs to have to worry about. It has to be set to zero each year, otherwise the game will sneak it back into existence.

Contract Years Maximum: 4 years: Prior to the upcoming off-season all players had one-year contracts, which was fine for the Reserve Clause era. Starting this off-season you may negotiate longer deals with your players.

Contract Extensions: Allowed: Seems self-explanatory. They have not been allowed prior to this upcoming off-season.

Uncheck “Enable Reserve-Clause Era Rules”: Unchecking this box after the 1964 season will technically usher in the Free Agency Era, but as explained earlier, no one will actually become a free agent until after the 1965 season.

Minimum Service Years for Free Agency: 6 Years: Default setting.

Service Years Required for Arbitration: 3 Years: Default setting.

Super 2 Deadline: No Super 2 Players Allowed: I didn’t have a strong inclination for or against this, but I like simplicity so I went with “No”. It can be discussed of someone wants it.

Compensation for lost FA’s: No Compensation: Compensation adds an additional layer of complexity, so I nixed it.

Allow Free Agents from other Leagues: Disabled: In our world the NBL and ABL represent the highest level of play. We don’t need no players from no other leagues.

Allow Free Agents to leave Leagues: Disabled: Same.

Reset Service Time for FA’s signed from other leagues: Disabled: Same.

Foreign players become FAs on contract end: Disabled: We don’t have foreign Free Agents, except for the ones that come up in our annual Amateur draft.

Allow Contract Opt-Outs: Disabled: In other leagues I’ve played in there seems to be a feeling that this is an area where a wily GM can sort of “job” the A.I., so I’ll disable it. It makes negotiations simpler, too, if opt-outs aren’t allowed.

Add expansion teams: Self-explanatory, I hope.

Team Settings

Fan Interest (1–100): 80: I think I’ve gone over this in pretty thorough detail already. I chose 80 out of 100 as “the” value because in other leagues I’ve been in 80 is a decent (but not fantastic) place for teams to be, but since everyone will be at the same number, I’m not sure it even matters what the number is.

Fan Interest Modifier: 0 If you play in Commissioner Mode and you go into the Edit Finances area, you might find, for instance, that a team has a Fan Interest of 82 and a Fan Interest Modifier of +3. If you leave the Edit Finances area and go to the Team’s home tab, it will say their Fan Interest is 85. Uh, okay. I can add, so I can see what’s going on here, but I have no idea why OOTP has two separate fields for one value unless it’s to remind the program which way the team’s Fan Interest is trending. In any case, I’ll be zeroing this out whenever it’s time to monitor/reset Fan Interest.

Fan Loyalty (1–10): 8: As with Fan Interest, you have all the details about this you need earlier in the article.

Market Size (1–20): 12: This, too.

Local Media Contract: set to baseline setting in League Settings: The OOTP manual claims this is based on Market Size. I call bullshit, because I ran a bunch of tests, and with all teams’ Market Sizes set the same, the local media contracts went all over the map every year. So I’m going to reset them to the same figure annually until 1966. After that I’ll let the program take them wherever it wants them to go. It’s apparently completely random. I could reset it for each team every year, but media contracts make up a pretty small portion of team revenue (much smaller than ticket sales), so I don’t want to obsess over it.

Local Media Contract Years Left: 1: The game throws a new number in here (randomly, I believe) every time the previous contract runs out. I’ll reset it to 1 in the interim between now and when Free Agency starts and then let it go.

Media Revenue This Year: set to National + Local: The game may make this adjustment on its own (if it does, there’s a delayed affect; it doesn’t do it immediately when you change either the Local or National contract), but just in case it doesn’t, I will.

A few more things

Following are some comments about other things that I hadn’t talked about yet, but which relate to finances.

Ticket price: OOTP gives the option to allow GMs to set their own ticket prices. I’ve been in leagues that have this, and through much experimentation, I have learned a lot about how to maximize attendance/revenue by raising or lowering ticket prices on a sim-by-sim basis, in response to a number of factors. I certainly don’t have a perfect understanding of it, but I am confident that what I do know gives me an advantage over some of my opponents.

You might think this makes me a big fan of giving the GMs the option to control ticket prices. I’m not. It’s tedious to have to monitor it every sim, and it’s exactly the type of thing I don’t want to be spending time on. So we have that option turned off in this league. (This isn’t a new thing; it’s always been off.)

The only reason I’m bringing it up is that during my tests I noticed that the teams that drew the most fans seemed to be earning a lot more revenue per attendee than the teams that didn’t draw so well. I had assumed—incorrectly, as it turned out—that not checking the “Teams may change ticket price” box meant that every team would be charging the same price for tickets as every other team, every game. Definitely not the case, because if it was, there would be a one-to-one relationship between attendance and gate revenue for every team, and there isn’t. So that means that under this setting OOTP is doing the ticket price manipulation for you. And the teams that draw more are getting a big benefit out of it, because they are able to charge more without causing their attendance to suffer.

Chemistry/Morale/Personality Ratings: It’s mentioned in the Rules section of the website, but we have Chemistry and Morale turned OFF but Personality Ratings turned ON. We’re not changing this with the advent of Free Agency, but now that you will be assessing the value of a player with budgetary limitations in mind, you’ll want to be up on the particulars. Here they are, to the best of my knowledge:

• Leader Ability: not relevant in this league (very important in a league with Chemistry enabled)
• Loyalty: a High rating here might be helpful if you’re trying to re-sign or extend the player
• Greed: a High rating will make the player demand more $. A low rating will make it easier to sign him to a team-friendly deal
• Work Ethic: a High rating increases the odds of the player getting better (especially if he’s young), a Low rating makes it more likely he won’t
• Intelligence: a High rating might aid development; I believe a pitcher with a High Intelligence rating is more likely to learn a new pitch)

Keep in mind none of these are guarantees. “Increasing the odds” is not synonymous with “making it a sure thing”. Anything can happen.

Salary Cap: How did I not mention the salary cap until the last paragraph? Because we aren’t going to have one! At least, I don’t think we are. Some of the people I talked to with experience in leagues with salary caps mentioned some problems with them, and I’d like to avoid those problems. We’re going to try it without one, and see how it goes. If it doesn’t seem to be working, we can always discuss a change.

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