Historical Finances

[OmahaReynolds]

This might be better suited for the Historical forum, but since it's a fictional league I figured I'd just post this here.

I ran a sim for a league with a structure identical to MLB from 1901-1923 (16 teams, 2 subleagues). The first few seasons had financials that seemed perfectly fine. Each team had the budget room to sign a few free agents each offseason. I have the league set up with no draft, so all amateur players are signed through free agency, and I generate prospects each offseason because the game usually only generate two for each team.

I didn't really pay attention to the financials after the third or fourth season, and after the 1923 season, I decided to take a peak at some of the teams' front office pages. I noticed that all of the teams had budgets that were three or four times the size of their payrolls, and basically had enough free agent money to sign every high-profile amateur player if they wanted to.

Which makes me think there might be an issue with the games financials in the early 20th century. I have all options checked for the game to progress from year to year (strategy, PCMs, finances) and I'm using reserve clause era rules as opposed to free agency.

The AI seems to be handling it fine, and every team is signing players and none are running out of guys at any position. My only concern is I'm going to have to restrict myself if I decide to control a team in a league that is set up like this since I could easily meet the contract demands of several 5-star free agents.

Dunno what sort of feedback I'm looking for, just figured I'd post this. I'm in New York and snowed in so what the hell, why not?

[Kaaosaste]

Originally Posted by OmahaReynolds

This might be better suited for the Historical forum, but since it's a fictional league I figured I'd just post this here.

I ran a sim for a league with a structure identical to MLB from 1901-1923 (16 teams, 2 subleagues). The first few seasons had financials that seemed perfectly fine. Each team had the budget room to sign a few free agents each offseason. I have the league set up with no draft, so all amateur players are signed through free agency, and I generate prospects each offseason because the game usually only generate two for each team.

I didn't really pay attention to the financials after the third or fourth season, and after the 1923 season, I decided to take a peak at some of the teams' front office pages. I noticed that all of the teams had budgets that were three or four times the size of their payrolls, and basically had enough free agent money to sign every high-profile amateur player if they wanted to.

Which makes me think there might be an issue with the games financials in the early 20th century. I have all options checked for the game to progress from year to year (strategy, PCMs, finances) and I'm using reserve clause era rules as opposed to free agency.

The AI seems to be handling it fine, and every team is signing players and none are running out of guys at any position. My only concern is I'm going to have to restrict myself if I decide to control a team in a league that is set up like this since I could easily meet the contract demands of several 5-star free agents.

Dunno what sort of feedback I'm looking for, just figured I'd post this. I'm in New York and snowed in so what the hell, why not?

I've run into this problem as well. Well, not really a problem, but unrealistic. I've wanted to start a historical online league but I'm worried that the default finances (with the reserve clause rules for the early 20th century) would just make it too easy for teams.

I haven't tinkered with them too much with the finances. A fix would be to just set them to more modern settings, but something just seems wrong with paying Walter Johnson millions of dollars, as good as he was.

But I will echo what you said. I never have an issue signing draft picks, making money, or anything like that.

[JMDurron]

Isn't that kind of the point of the reserve clause era? Teams had no issues making money or staying under budget because they didn't have to pay market rates for their players. They only had to pay them enough for them to not retire and go do something else instead, outside of the occasional league wars. I think that's a feature of the era, which the game is accurately modeling, as opposed to being any kind of flaw with OOTP's financial model.

[Kaaosaste]

Originally Posted by JMDurron

Isn't that kind of the point of the reserve clause era? Teams had no issues making money or staying under budget because they didn't have to pay market rates for their players. They only had to pay them enough for them to not retire and go do something else instead, outside of the occasional league wars. I think that's a feature of the era, which the game is accurately modeling, as opposed to being any kind of flaw with OOTP's financial model.

But, in my experience with historical leagues, my teams make so much money compared to their expenses, I've never had an issue with signing draft picks, or if I do manage to get five or six "superstar" quality players, paying them is not an issue.

Over ten years of a historical game I'm playing, the Cubs have been the worst team, with a winning percentage of .415. Even they've managed to make a huge profit every season (below is a screenshot of their profit/loss).

The 25 top paid players in the league make a total of $108,780. If if the Cubs had all of these players for their last season where they made $220,796 and went 57-97 they still would have profited just over $112,000. That's what doesn't seem realistic to me.

I'm not arguing that things were run differently back then, but I just don't think it was that easy for teams to make money.

[Questdog]

Money was not an issue in one sense and it was in another......

OOTP models the part where it was not an issue: teams COULD sign anybody they wanted to; there was no fear of going under if a superstar was signed to a $10,000 contract.

The part of money that WAS an issue is not modeled in OOTP. The owners had gobs of money in their pockets but every penny they paid out in salary was a penny that was not in their pockets anymore. In OOTP money has no use other than to sign ballplayers, but the baseball magnates had no problems thinking up other uses for that money rather than giving it to ballplayers. They could build mansions and hunting lodges and new ballparks and buy cars and chase women.......

That being said, I think the profits in your league are a bit excessive. But until someone can figure out a way to entice players to spend the OOTP revenues on things other than ballplayers, there will be no reality in reserve clause era leagues........

[Le Grande Orange]

Originally Posted by JMDurron

Isn't that kind of the point of the reserve clause era? Teams had no issues making money...

Actually, some teams had no issues making money. Others did have issues. Indeed, some were even perennial money-losers.

Over the 28 seasons spanning the 1923-1950 time period, here's what each MLB club's profit-loss result looked like, expressed as a win-loss record:

New York (A): 24-4
St. Louis (N): 23-5
Detroit: 23-5
Cleveland: 22-6
Pittsburgh: 22-6
New York (N): 21-7
Chicago (A): 21-7
Washington: 20-8
Chicago (N): 19-9
Brooklyn: 18-10
Cincinnati: 17-11
Philadelphia (N): 16-12
St. Louis (A): 16-12
Philadelphia (A): 14-14
Boston (N): 9-19
Boston (A): 6-22

Then as now, the Yankees could be counted on to rake in revenue. The Cardinals reaped the rewards of its minor league system. On the other side of the ledger, the Athletics only turned a profit half the time; the two Boston clubs were both perennial money-losers. (The Red Sox lost money ten years in a row from 1931-1940.)

Originally Posted by Questdog

The owners had gobs of money in their pockets but every penny they paid out in salary was a penny that was not in their pockets anymore. In OOTP money has no use other than to sign ballplayers, but the baseball magnates had no problems thinking up other uses for that money rather than giving it to ballplayers. They could build mansions and hunting lodges and new ballparks and buy cars and chase women...

Clubs did also have lots of legitimate expenses. Then as now, clubs had to pay for travel, hotels, front office staff, scouts, working agreements with minor league clubs, salaries of minor league players, front office staff, ticket takers, ushers, grounds crews, advertising, power, insurance, telephones, equipment, taxes, etc.

[OmahaReynolds]

Thanks everybody for all the input.

I think the best approach, if you're running a team in this sort of era, is to use some restraint in signing players (unless you're using the draft) or the challenge could evaporate quickly.

I wonder if the league was simmed up to modern times how the finances would end up looking and if they would be close to how they are in real life.

[Questdog]

I guess I don't understand your particular issue, because it seems to me that you are complaining that you are able to sign all your draft picks to contracts....if that is the case, then I think you are making a mistake in your thinking.....there is no reason why a team should not be able to sign all their draft picks....there is nothing unbalancing about that.....

[JMDurron]

Originally Posted by Le Grande Orange

Actually, some teams had no issues making money. Others did have issues. Indeed, some were even perennial money-losers.

Over the 28 seasons spanning the 1923-1950 time period, here's what each MLB club's profit-loss result looked like, expressed as a win-loss record:

New York (A): 24-4
St. Louis (N): 23-5
Detroit: 23-5
Cleveland: 22-6
Pittsburgh: 22-6
New York (N): 21-7
Chicago (A): 21-7
Washington: 20-8
Chicago (N): 19-9
Brooklyn: 18-10
Cincinnati: 17-11
Philadelphia (N): 16-12
St. Louis (A): 16-12
Philadelphia (A): 14-14
Boston (N): 9-19
Boston (A): 6-22

Then as now, the Yankees could be counted on to rake in revenue. The Cardinals reaped the rewards of its minor league system. On the other side of the ledger, the Athletics only turned a profit half the time; the two Boston clubs were both perennial money-losers. (The Red Sox lost money ten years in a row from 1931-1940.)

Clubs did also have lots of legitimate expenses. Then as now, clubs had to pay for travel, hotels, front office staff, scouts, working agreements with minor league clubs, salaries of minor league players, front office staff, ticket takers, ushers, grounds crews, advertising, power, insurance, telephones, equipment, taxes, etc.

I had no idea, this was quite educational, thank you.

Yet another way that my Red Sox sucked historically, yay!

On the plus side, out of the "losers", only the Red Sox still exist today where they were during that time period, so I suppose that's a win on a larger scale.

[OmahaReynolds]

Originally Posted by Questdog

I guess I don't understand your particular issue, because it seems to me that you are complaining that you are able to sign all your draft picks to contracts....if that is the case, then I think you are making a mistake in your thinking.....there is no reason why a team should not be able to sign all their draft picks....there is nothing unbalancing about that.....

The issue for me is that I don't use a draft, and all prospects are signed as free agents. I'm trying not to introduce the amateur draft until 1965. So theoretically any one team has the ability to sign every 5 star prospect if they want to. It seems like the AI teams don't go overboard, but there is definitely low parity. A human GM would have it easy without some kind of house rules.

[GMLoophole]

Originally Posted by JMDurron

Isn't that kind of the point of the reserve clause era? Teams had no issues making money or staying under budget because they didn't have to pay market rates for their players.

Not to take away from the OOTP discussion which I am following with interest, but this isn't exactly right. Both Horace Stoneham and Bill Veeck resorted to selling players for cold hard cash or dump trades to reduce payroll.

[SteveP]

A missing element of this discussion is that historically you didn't have free agents. Players played someplace for some sort of team or didn't play again. Teams didn't negotiate deals with players but purchased player contracts from other teams.

What changed when teams began to make more money was the advent of bonus babies, who did sometimes score big bucks in the form of signing bonuses. That was regulated by the advent of the draft.

If you are bringing new historical players into the league as free agents, you've created a situation that is not historical, and one that the financial model doesn't try to account for, unless you consider them to be bonus babies. But the AI doesn't know to bid for them like that.

OTOH, when players come into the league directly into teams, they get standard salaries automatically. Any FA money in your team budget is meaningless.

[Le Grande Orange]

Originally Posted by SteveP

What changed when teams began to make more money was the advent of bonus babies, who did sometimes score big bucks in the form of signing bonuses. That was regulated by the advent of the draft.

Just to expand upon the above...

It was WWII and the demands for young men which started the first signing bonus binge. The post-war period saw a boom in the amount of signing bonuses for amateur players (so much so, in fact, that some clubs were paying out more in bonuses to unproven amateurs than they were spending on salaries for major league players).

MLB tried three times to bring bonuses under control: the first bonus rule which lasted from 1947-50; the second bonus rule which lasted from 1952-57; and the first-year player draft, which lasted from 1959-66. None of these measures were successful in their aim to reduce amateur player signing bonuses. It was only the adoption of the amateur draft in 1965 (now called the first-year player draft) which did so. (At least, it did so until the start of the 1990s, at which point bonuses again began to climb sharply.)

Originally Posted by SteveP

If you are bringing new historical players into the league as free agents, you've created a situation that is not historical, and one that the financial model doesn't try to account for...

That's pretty much the case. An ideal financial model would be able to recreate the environment within which amateur players were acquired both before and after WWII.

Some day perhaps...

[OmahaReynolds]

So the real question is how to best simulate new players coming into a league prior to the amateur draft. On retrosheet I see 3 types of transactions:

1. Players are drafted via minor league draft. I've tried to do something like this by using affiliated minor leagues with unafilliated teams and turning on the Rule 5 draft, but it seems like players will only be eligible if their team has a parent team in the majors.

2. Contracts are purchased, usually minor leaguers going to majors. This one is the trickiest. Maybe in a future version there can be an option in league setup that only allows one-way trades with other leagues, and you have to trade cash for players between these leagues. This would simulate the purchasing of contracts from minors.

3. Players are signed as amateur free agents ( a handful per season).


My idea for simulating the pre-war era, at least in a fictional league, is to have the amateur draft in November and populate the draft pool with "Young and Slightly Established" players, modeling the original rule 5 draft. This draft would only be two rounds or so. Then each team would also get two or three "Draft Eligible Prospects" added to their rosters, modeling the way teams would go out to various minor leagues and purchase contracts. The second part only sucks in that teams would have no control over the players they are getting.

It beats having a team in 1909 drafting a player on June 15th from Cal State Fullerton or whatever. That's what I'm trying to avoid.