Hey Guys, I had a couple of quick questions to ask you about your Kitty Hawk dynasty but I didn't want to put them in your thread on the dynasty board to try to keep the clutter down.

BTW Excellent work turing around a lowly franchise in such short time with pretty harsh house rules.

1) Quicksand mentioned somewhere that
you lost money hand over fist. Something like $91 million dollars. I know you had a house rule that you were going to entend all contracts of players you decided to keep last year so something like this was bound to happen but what do the finances look like this year? You probably aren't giving out that much in signing bonus but $91 mil is certainly a lot With your 10% under the cap rule at some point this probably will come into play sometime if not this year.

2) What are some of the other teams finances look like? It seems to me that one of the huge advantages the player has over the computer is the player seems to be more willing to go into the red to turn the team around.

Thanks and keep up and interesting read.

Originally posted by dixieflatline
1) Quicksand mentioned somewhere that
you lost money hand over fist. Something like $91 million dollars. I know you had a house rule that you were going to entend all contracts of players you decided to keep last year so something like this was bound to happen but what do the finances look like this year? You probably aren't giving out that much in signing bonus but $91 mil is certainly a lot With your 10% under the cap rule at some point this probably will come into play sometime if not this year.

I don't have the game in front of me, but I believe Kitty Hawk lost $91 million last year. This was largely due to releasing players who either 1)sucked 2)were chemistry problems and therefore affected our chemistry goal or 3) were too expensive to keep considering their talent level. It was also due to low attendance resulting from past poor performance (prior to the management change, of course) and therefore limited revenues. Also, the house rule regarding ticket prices hurt revenues as well (Tix priced to match the lower of the two closest teams - has since been modified to match the average of the two closest teams).

At this point we are in the training camp phase of our second year so it's too early to tell how finances will go. Ticket prices will hurt again this year, but we hope for increased attendance due to better performance on the field. Our 10% cap penalty due to non-profitability will help restrain expenses, but it will be tough to turn a profit this year. As a result, it is very possible we may face a 20% cap penalty next year. Time will tell.


Originally posted by dixieflatline

2) What are some of the other teams finances look like? It seems to me that one of the huge advantages the player has over the computer is the player seems to be more willing to go into the red to turn the team around.

Honestly, I have no idea and am not where I can look.

Dixie--you know, the more the merrier in GroupThink. Even if you do not want to "commit" to doing anything, we will be more than happy to have your input and let you be part of the team. And if you do want a bigger role, just ask. There is a place for everyone.

Dixie, a bit off topic, but any relation to the DixieFlatline on CM boards? I doubt it but worth a shot ;)

Finances in FOF are basically a mystery to me and practically all players of the game. There are sevral reasons for this, as nearly as I can tell:

-There has never been a very strong correlation between ticket prices and attendance (and if there is in FOF4, I haven't explored it enough to see it) -- making it painfully easy to jack up prices and generate huge profits

-But, there's not point in watching your bottom line - profits don't really translate to anything meaningful. As long as your team plays competitively, you won't get fired - and that's the only real consequence of bad finances

-This is mainly because pro football's salary cap - where the team's overall finances realy don't translate into its ability to spend money on players. In real football, and in FOF, each team spend roughly the same amount for its roster (in cash terms it will vary year to year because of bonuses, but over time it basically evens out) -- so you don't see the huge variations between haves and have nots like in, say, major league baseball.


But I will gladly echo the commnt from above... we'd be glad to have another set of eyes and ears among those who are following and managing this team. Even if it's just to say "Don't cut that guy, he's my favorite player!" from time to time...

Yes they are a bit a mystery to me as well which is one of the reasons I asked the questions. Quick I think your absolutely correct that the demand curve for tickets is way too elastic(flat) letting you increase ticket prices to your hearts content. This seems to be handled a bit better in TCY actually though the playoff games there are screwed up.

I don't quite agree with you as far as the NFL teams paying basically the same ammount of money. Teams do have to be under the salary cap but they can do that different ways. The Eagles for instance, don't give out big signing bonuses so their expenditures are basically what the salary cap reports. The redskins though tend to give huge signing bonuses that get spread out over the term of the contract for the salary cap but are paid in real dollars at the beginning.

The NFLPA has put out some reports on this but their numbers are a bit old. The 2000 salary cap was $62.2 million but the average team spent $68.1 million in real salary. They don't break the teams down in real salary but they do say that the cowboys have payed out $211.3 in signing bonuses from 1993 to 2000. The Eagles have played out a mere $112.3 during that same range. Maybe not as big as baseball but still a huge variation.

Back to fof world for a minute. I would think the owner would care not only what the salary cap number is but also the real salary number and, unless they were as rich as Dan Synder, prohibit a GM from spending so much money. Since Fof has a built in cap number I wouldn't think a ceiling on real salary would be too difficult.

I will take a look and might post on the kitty hawk thread but I check the board mostly at work where I don't have fof installed. Thanks for the offer though. You guys are really doing a good job with the dynasty espcially with the affinity stuff!!

-SirFozzie I am not the dixieflatline on the CM boards but I am that handle on the puresim board

Oh before someone takes me to the mat on these numbers I should point out that the NFLPA converts all their numbers into 1997 dollars. Since inflation has a big impact when you look at salaries over a long period of time it needs to be corrected for. This way you can more fairly compare a signing bonus in 1993 to a signing bonus in 2000.

Originally posted by dixieflatline
Yes they are a bit a mystery to me as well which is one of the reasons I asked the questions. Quick I think your absolutely correct that the demand curve for tickets is way too elastic(flat) letting you increase ticket prices to your hearts content. This seems to be handled a bit better in TCY actually though the playoff games there are screwed up.

Yes, though I think you mean inelastic - but we agree there.

Originally posted by dixieflatline
I don't quite agree with you as far as the NFL teams paying basically the same ammount of money. Teams do have to be under the salary cap but they can do that different ways. The Eagles for instance, don't give out big signing bonuses so their expenditures are basically what the salary cap reports. The redskins though tend to give huge signing bonuses that get spread out over the term of the contract for the salary cap but are paid in real dollars at the beginning.

Yes, that's what I meant above by saying "(in cash terms it will vary year to year because of bonuses, but over time it basically evens out)." In your example, the Redskins might show up as paying a lot more for their players in a given year when they have spent a lot on bonuses. But in the following year, the same two teams will have their positions reversed... the Eagles continue to pay about what the cap indicates, while the Redskins pay less in cash that year - since their big outlay was in the previous year, bt is still counting against the cap.

The point is that in FOF, where there are only two categories of money (guaranteed bonus paid up front in cash, and annual salary paid each year if the player remaisn on the roster) the whole thing will even out over time. In real football, the only real excaption to this is the presence of incentive clauses that may or may not trigger... that's where you can see some variability over time, but even then in most cases you still see every team averaging within about 10% of one another's outlays.

Elastic inelastic I thought I had the right one but it has been a long time since high school econ. I think in real life there are plenty of die hard fans for pretty much all team(except the cards) who will pay an arm and a leg for tickets so the tail of the demand curve should be pretty flat. The other part though is mostly casual fans that won't go if the price gets too high. My guess is that FOF uses either a line or a parabola that opens very slowly for the demand curve. A more compilcated function is probably needed.

Yes, that's what I meant above by saying "(in cash terms it will vary year to year because of bonuses, but over time it basically evens out)." In your example, the Redskins might show up as paying a lot more for their players in a given year when they have spent a lot on bonuses. But in the following year, the same two teams will have their positions reversed... the Eagles continue to pay about what the cap indicates, while the Redskins pay less in cash that year - since their big outlay was in the previous year, bt is still counting against the cap.

I see what your saying and I would agree with that if there was a fixed ending point. Assuming the NFL lives forever :) teams that continue to pay large signing bonuses will continue to outspend teams that don't. The Redskins can continually pay large signing bonuses and defer salary cap costs and thus always have a higher team salary than the salary cap. Since the 1993 the average teams real salary has been higher than the salary cap:

yr. cap average team real salary
94 $34.6 $36.6
95 $37.1 $41.9
96 $40.7 $44.9
97 $41.5 $42.7 (actual salary drop!)
98 $52.4 $61.4
99 $57.3 $64.7
00 $62.2 $68.1

The average team is paying more than the actual salary cap, defering cap cost. Until the NFL resturctures the bargaining agreement teams like the redskins can and will keep outspending teams like the eagles. I hope that makes sense because I don't think I worded that very well.

On the bright side, as far as I know all NFL salary can be broken down in to the following catagories:

Base salary (guaranteed or unguaranteed)
Signing bonus
Roster bonus
Incentive (likely to be earned or unlikely to be earnd)

So except for incentives, roster bonuses are the only thing that FOF doesn't really have.

Originally posted by dixieflatline
I see what your saying and I would agree with that if there was a fixed ending point. Assuming the NFL lives forever teams that continue to pay large signing bonuses will continue to outspend teams that don't. The Redskins can continually pay large signing bonuses and defer salary cap costs and thus always have a higher team salary than the salary cap. Since the 1993 the average teams real salary has been higher than the salary cap:

< data snipped out >

The average team is paying more than the actual salary cap, defering cap cost. Until the NFL resturctures the bargaining agreement teams like the redskins can and will keep outspending teams like the eagles.

So, the fact that the average team is a sizable amount above the nominal salary cap is just evidence that there are current contract bonuses being paid now (that won't fully count agaonst the cap until future years) that exceed the continuing effects of prior years' signing bonuses. That's not really a surprise - thought the magnitude is, to some degree.

But let's look at the Redskins' big FA binge from 2002. Say they spent something like $30 million in signing bonuses, all spread out over 4 years. (That's not accurate, but it's a fair assumpiton to work with) Those bonuses counted as $30 million in cash that year - leading many headlines to talk about how they had a $100 million roster with a $70m salary cap (or something along those lines).

But this year, two seasons later, they are still carrying $7.5 million of those bonuses as part of their cap effect. It has to show up somewhere. So, in effect, the Redskins have less ability to pay salaries this year, as a result of paying all those bonuses two seasons ago. Compared to the Eagles (your example of a team that doesn't pay big bonuses) the Redskins should have less capacity to pay simple player salaries this year, because of the lingering effects of those bonuses.

Yes, there is some sleight-of-hand... and to the degree that some teams carry a lot of "pushed forward" cap stuff by way of contracts with balloon payments and the like, there is some marginal difference. But it's not like the Redskins will, year afteryear, outsoend the Eagles by 25% or anything even remotely close to that figure. Plus, if it continues and the Redskins (to continue with your example) keep piling up the deferred money - it will still have to count at some point.

Much like you find fault with my analysis because it has no end point - I find fault with your because it has an arbitrary end point. The bottom line is that the salary cap - designed to account for all player costs eventually - makes it such that teams will spend, by and large, the same amount on their players. Whether they accelerate that spending to do exta now at the cost fo some future year(s) is up to them, but the only way a team really departs from the same basic bottom line as everyone else is by deciding to stay way undr the salary cap. And in the NFL and FOF, we simply don't see anything of the sort-- we simply don't see teams going through the entire season with 25% or 50% of their cap space unused. (At least I'm unaware of it happening)

Ok after searching on the NFLPA website I have located a nice pdf document that actually does show most of what we are looking for. The link is here:

www.nflpa.org/PDFs/Shared/NFL_Economic_Primer.pdf (http://www.nflpa.org/PDFs/Shared/NFL_Economic_Primer.pdf)

The charts with the teams base salary and signing bonuses start on page 36 and go to 43 of this huge 116 page document. I will list the cowboys and the eagles here to show the biggest spread in the NFL over these years(in signing bonus paid)


<pre><font face="courier">
Eagles Cowboys
Year base signing base signing
93 33.1 3.6 30.7 16.0
94 27.4 6.9 24.6 7.7
95 27.5 11.5 20.7 39.4
96 30.2 13.2 21.5 29.9
97 28.3 9.0 22.0 10.9
98 35.8 11.1 29.5 26.3
99 39.5 29.2 28.1 40.3
00 37.8 27.2 26.9 33.1
total 259.6 111.7 204.0 203.6
</font></pre>

So infomation on how long the contracts last and how far under the cap each team was is currently unavailable but I feel pretty safe in saying that both teams were pretty near the cap each year which means the cowboys outspent the eagles by about $36 million over the 8 years which is about $4.5 million a year. Obviously the cowboys have less money to spend under the cap in future years. Seven years is also too small a sample but it's all I can get my hands on. So while this differential is much much smaller than it is in baseball I think that difference is significant(though it is less than I would have guessed).

Thanks for the link - good info. So, the spread between the highest spending and the lowest over that particular period is about $4.5 million per year - or something like 5-10% of the salary cap? Yes, it's "significant" in the sense that there are real differences... but back to the original question of whether teams really change their player investment as a function of their overall revenue stream, the answer is pretty clearly "no."

The Eagles' way of doing busines is just diffrent - they prefer the flexibility gained by no having huge contracts tied up into future years - many other teams would prefer the opposite.

Plus, (and I really don't mean to needle here, but it's so on point) the arbitrary selection of any given time period is bound to see some teams have unusually high bonuses at the end, which then exist mostly outside the time period selected. Dallas might well have paid some of those big bonuses in 99 and 00 to players like Aikman or Irvin who didn't hang around much longer - and therefore (as I recall) Dallas went through some "cap hell" in the year 2001 as they suffered some cumulative effects of their previous spending.

If we arbitrarily looked at DAL and PHI for a different period - like 1998 to 2002, you might find that the numbers are a lot closer to even. But then, for that period, it might be two different teams who represent the polar ends of the scale, as a function of what cycle those teams were going through during those years.

Interesting conversation, though, I think.

QS - I'm curious if you think increases in the salary cap would also aid teams in supporting large signing bonuses? In other words, as the salary cap increases, teams can maintain their base salary from year to year and still pay the larger deferred bonus money.

I wonder if the cap stays steady if you see less and less of the large bonuses. Or is it once again just a matter of a teams attitude toward "debt" (which is how I conceptualize deferred cap charges)?

Buzzbee:

That is a great point. You can draw lot's of parallels between signing bonuses and corperate/government debt. If you sign a long term deal the signing bonus gets evenly spread out over the years so at the end of the contract it is a much smaller percentage of your teams cap. Quicksand was eluding to this in his last post.

Quicksand:

Your right that it was two arbitrary teams over arbitrary years but I think you hit the nail on the head with this:

The Eagles' way of doing busines is just diffrent - they prefer the flexibility gained by no having huge contracts tied up into future years - many other teams would prefer the opposite.

Things like this show different philosophies of different teams/GMs and I really wish FOF would do a better job of this. All their teams//GMs seem to attack the problem the same way unlike the NFL.

Getting back to the original question after the Steelers got their new stadium they went on a spending binge and Rooney claimed it was because of the new income from the stadium. The Packers also claimed that their stadium renovation kept the team fiscal viable. The salary cap is set at about 66.5% of the leagues revenue so the lower revenue teams might still have a hard time keeping up. But you are right It doesn't appear that teams investment charges much due to revenue.