Monday, December 15, 2008

Cash Cap

Please consider this post as an invitation for dialogue, as I'm not sure that (a) I've identified a real problem; or (b) my proposed change will have any impact on the problem if one exists.

Here is my concern: I think it will be more difficult for rebuilding teams to become competitive in version 9.0 compared to version 6.5, particularly if a cash cap is in place. Is the $10 million cash cap still in effect in this league? I am wondering if we should consider eliminating it as a way to improve the competitive balance of the league.

According to the manual for 9.0, the primary way to increase a team's fan interest is by "winning." If other methods exist, the manual does not disclose them. Right now, the talent gap between the competitive teams and the rebuilding teams in this league is so great that "winning" is simply not realistic for many teams. This is compounded by the fact that promotional days are a thing of the past in 9.0. In 6.5, even a bad team could find at least a few games where it had a good chance of winning (against other bad teams), and hold promotional days during those games. For a rebuilding team, adding even a few fan interest points over the course of a season can be valuable.

Another difference between 9.0 and 6.5 appears to be the importance of player morale. From what I can tell, players on bad teams (like mine) tend to have low player morale, while players on good teams are markedly happier. This makes sense. But when you consider that the manual says unhappy players actually perform more poorly than they otherwise might, this presents another challenge for rebuilding teams. Furthermore, it will probably be more difficult for low morale teams to sign coveted free agents.

If the cash cap is removed, a rebuilding team could help to offset these obstacles by stockpiling cash. Then, at an appropriate time, the team could use that cash to acquire more talented players, either via trades or via free agency, to jumpstart its competitiveness. I play in another OOTP league without a cash cap, and it appears as though this strategy is being employed by at least one rebuilding team in that league, perhaps more.

Obviously there is some unavoidable bias here because I run one of the rebuilding teams. But if I am right that eliminating the cash cap might improve the competitive balance of the league, I think it is something worth considering for the league's long term survival. Greater competitiveness makes it more interesting, I think, regardless of where your team stands on the scale.

It is possible that eliminating the cash cap would have no effect on competitive balance, or perhaps even the opposite effect. But assuming that greater competitive balance is a goal we can all agree upon, perhaps there are other ways to get there even if the cash cap isn't the solution.

Any thoughts about any of this?

14 comments:

  1. I know that I am one of the rebuilding teams in this league as well, and would like to hear the view from the best teams in the league about this.

    I do agree with Matt on this point. When I first started in this league, I was for the cap, but after seeing how it is administered by OOTP it really does go much more for keeping the good, good and making it much harder for the bad to become good. It does not work like a salary cap or like a luxury tax like is done in the major sports today. I know when I first came into the league I had a cash deficit and thought that I needed cash right away...not knowing that the next season I would be set to $10M (or close to it) automatically without repercussions.

    I think that it will make the weaker teams (mine included) able to compete much quicker if we get rid of the cash cap as soon as possible.

    I think this would make the league much more competative much sooner which make it more fun for everyone. I look forward to hearing what others think.

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  2. I don't believe the cash cap has an effect on league competitiveness. But, I admit I don't have any evidence in favor or against that proposition. My belief is that it simply acts as a brake on salaries and has little to no effect on building a winner.

    My only data point is anecdotal and comes from my own team. Until this year, I would have been able to accumulate cash like mad. My strategy has always to maximize the use of my available cash, but I have often "wasted" money by spending too much on bench players I didn't really need. I've still usually lost money to the cash cap. Without a cash cap, I would have banked that money and would have built up an absurd amount of cash by now. As a consequence, I believe that I'd be able to keep my team together, including the younger guys moving into arbitration and free agency, for at least five years.

    So, from my own perspective, I don't think removing the cash cap would help anyone catch me. In fact, I think I would be even stronger for even longer.

    That said, I don't have any particular love for the cash cap and don't really care if it stays or if it goes.

    P.S. The clear winner other than the players, in my opinion, of removing the cash cap will be Michael. His financial advantage (if it carried over to version 9, which I haven't checked) will be even more pronounced if he's able to bank those extra dollars.

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  3. Mack that is true. It actually looks like there is a whole lot on the table right now. These are the estimates for how much cash the 'Projected Balance' will be for each team (I know this is not exact, but it is what we have to go by):

    LA - $34.6M (81-81)
    Dan - $33.2M (62-100)
    Maui - $29.7M (44-118)
    Cle - $29.2M (56-106)
    RC - $20.9M (110-52)
    Hou - $16.9M (65-97)
    Brk - $16.1M (87-75)
    Walla - $14.5 (72-90)
    Sas - $12.2M (83-79)
    Sea - $9.2M (118-44)
    Hik - $5.9M (89-73)
    NY - $133K (105-57)

    You can see what Mack meant by looking at the difference between how much money he would be set to make and what Nate is set to make with RC. Therefore, both good and bad teams would have the option to hoard money, and yes it is easier to do so when you bring in more revenue as better teams will.

    The one thing that I think this illustrates is that everyone could spend more on their teams if they need to with the exception of NY who is not leaving anyone on the table. Therefore, $21M for Moss is not the worst thing out there and probably there should be more salaries up in that level (not that I am for this at all, because I would like to get some FAs in the future), but that is what the free market is all about. He who wants to pay gets the goods (I learned that from Scott Boras).

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  4. Obviously, as Mack pointed out, I have the most to gain from a removal of the cash cap (with good reason! Kids love the Scorps!), so take anything I say with that $36m grain of salt...

    I'd be in favor of eliminating the cash cap (duh). I'd also be in favor of a few other things...

    1. A well-discussed and negotiated salary cap.

    2. A luxury tax (which I think OOTP9 supports).

    3. Free agent compensation. (Which probably deserves its own topic, if I ever remember to post it.)

    4. Allowing teams to spend their cash on things like custom stadia, with the moneys spent on such things being redistributed to the rest of the league. (For example, if we say that a stadium costs $50m, then that would be spread out to the other 11 teams, giving everyone else $4.5m of free money.)

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  5. I also don't think removing the cash cap is the answer... I'm not sure what is, but I'd lean toward Michael suggestion, especially the salary cap.

    It's possible to rebuild in this league - I was one of the four owners that joined when the league went from 8 to 12 teams. It took a while, and some lucky breaks, but I've managed to get to a point where (obviously) I'm competitive.

    But as can be seen, I'm about to severly cash strapped. I'll have to let some players go to FA (or via trade) at the end of the year, I'm guessing.

    So what's my point? I'm not sure.... I want some coffee.

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  6. How complicated do you want to get? I've seen all sorts of things...

    1. I've always thought the cash cap was artificial and could easily live without it.

    2. Then what happens with the cash that is stockpiled?

    That boils it down. Here are some thoughts:

    Stadia construction. I played in a league once without a cap and they had it set up where for $10MM you could change your dimensions, or go from dome to open (or the reverse), or add 1K seats to the current stadium. I'd be in favor of all of these. The $50MM for a new stadium is silly. Openers for that sort of construction is $300MM these days.

    I also saw a league where teams could spend their extra cash on 'marketing'. Each million contributed to marketing bumped up Fan Interest by 1 point. So $10MM committed gave a respectable 10 point bump in interest. It's a sort of 'money on billboards and commercials' sort of thing.

    I'd be in favor of either of those. But to do so you'll need to withdraw the cash cap.

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  7. How complicated do you want to get? I've seen all sorts of things...

    1. I've always thought the cash cap was artificial and could easily live without it.

    2. Then what happens with the cash that is stockpiled?

    That boils it down. Here are some thoughts:

    Stadia construction. I played in a league once without a cap and they had it set up where for $10MM you could change your dimensions, or go from dome to open (or the reverse), or add 1K seats to the current stadium. I'd be in favor of all of these. The $50MM for a new stadium is silly. Openers for that sort of construction is $300MM these days.

    I also saw a league where teams could spend their extra cash on 'marketing'. Each million contributed to marketing bumped up Fan Interest by 1 point. So $10MM committed gave a respectable 10 point bump in interest. It's a sort of 'money on billboards and commercials' sort of thing.

    I'd be in favor of either of those. But to do so you'll need to withdraw the cash cap.

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  8. I like both of Nate's suggestions (or, all four, since he double-posted). The more creative, the better, as far as I'm concerned.

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  9. I think I must not understand the cash cap as well as I thought I did. Jeremy's second post in particular makes me wonder if I am totally confused. How is it possible for teams (good or bad) to hoard money if the excess money is wiped out at the end of the season (except for $10MM) via the cash cap? Or am I totally missing the concept?

    Thanks for the comments, guys, this is a good discussion.

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  10. I was refering to how much money people would have if we lifted the cash cap.

    So currently you cannot hoard cash, but if we lifted people could start.

    I do like the ideas of spending money on other things than just players like a new stadium or more seats (which would evenetually lead to more revenue, if you are good).

    I am more likely to be for improving the Loyality of the team through marketing rather (Very Loyal, not so Loyal) than the fan interest (the number out of 100).

    I think that marketing would help people be more or less loyal and that sees harder to change than the interest (I am up from 17 to 20 already this season, look what not being in last does for your team).

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  11. OK, let me posit this for voting, then:

    1. Kill the cash cap.

    2. Other than player personnel, non-player personel, and scouting money can be spent this way:

    2a. Change walls in your stadium: $10MM

    2b. Change from indoor to outdoor or reverse: $10MM

    2c. Add 1000 seats: $1MM

    2d. Add 1 point of fan interest: $1MM

    2e. Change Fan Loyalty 1 interval: $10MM

    I think that these will address the main problem, that being what to spend the extra money on, and allow for some customization of parks and such.

    Also, I have long-term doubts about the impact of competitiveness of high salaries in the league. Yes, you can pay an infinite amount for a player, but in all but the rarest cases such contracts end up being detrimental to the team that holds them.

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  12. I vote for killing the cash (or increasing it by $10+M or so), and for being able to spend money to change your ballpark/fan interest.

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  13. Given the administrative overhead Nate's proposal entails, shouldn't we wait to hear if the Commissioner is actually interested in such a measure? I mean, I know I wouldn't want to be responsible for tracking this stuff and making the resultant changes. I think Zev is tied up with finals right now, so we may want to cut him some slack in response time.

    Also, where's the voting option for keeping the cash cap until we see what other changes to league finances are wreaked by the upgrade to version 9? The more I've thought about it, the more I'd like to see how the cash cap actually plays out in version 9 before I vote to get rid of it and install some system that may create further imbalance and instability among the teams.

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