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[Evas]

Yeah we did, Ron. Small but interesting philosophical differences there I seem to remember.

Personally, I have enough of a time trying to manage the fortunes of one club. Trying to control my competitors is not something try to do.

Besides, if I pass on a deal to help both my and my competitor's squads, there is nothing stopping the competitor from turning around and making a 2nd deal with a 3rd team that improves them and not you.

I'll take my advances when I can get them and control what I can control.

[roncollins]

Yeah, I figure your approach is the more mainstream. Probably a better way of phrasing my view is that there are times when I'm dealing with a mega-team that I will expect to draw a greater price than if I'm dealing with a team with lesser resources--particularly when that team impacts my ability to win my division/league. That said, LUP and SS have made a deal or two in our past, so it's not like I'm a slave to the idea. :)

The strategy is similar of mind to the concept of bidding on a free agent you don't really want merely to ensure the market remains high and none of your competitors gets them for dirt-cheap. Almost everyone seems to "get" that situation, but very few have much interest in applying that thought to trading.

This is even more important to at least think about in a world where resources are as unevenly distributed as in the PEBA--where as I recall, Tempe's projected 2022 revenue is a minuscule 39% of the projected top revenue (Bakersfield is set to rake in something like $215M, Tempe more like $90M ??? ). This specific disparity is absolutely massive, but in reality almost all of the PEBA are effectively small market teams relative to the power--I forget the specifics, but something like 50-60% of PEBA teams were projected to make less than $130M in revenue this year, whereas the top 6 revenue teams were all due to make $200M-$215M. I suggest that those teams in the 50-60% all consider themselves small market teams, regardless of how OOTP labels them. Those 16-20 "small market" teams are at a serious disadvantage, and every time one of them gives one of the top 6 or so big revenue teams a run of sweet draft picks (for example) the small market teams are feeding the very gap they have to overcome before they can begin to actually compete.

In other words, the "cost" of giving Bakersfield or Aurora or Shin Seiki a 1st round pick has to include the idea that you've just allowed those big ticket teams to slot a serious player into their lineup for three years at $500K a few years from now, rather than forcing them to drop $15-$20M on an established player to get similar production--or, even worse, that the cost of giving up that pick is that it _enables_ the big teams to do both (because that is what they will do) and still be ahead of me in ability to spend on more guys. If you are a small market team and you make that deal, you had better win big, and you had better win big now ... because winning a couple seasons from now just got a lot harder.

In other other words, the value of that first round pick to a team with $200M+ in revenue is easily over $15M, probably over $20M (you can see that in the cash some mega-bonus "kids" like Andrés Hernández [$29M] and Ricardo Perez [$20M] got when they signed as really young FAs). Shin Seiki just invested $9M in a 16 year old INT pitcher, and was justified to consider it a great deal. The value of that first round pick to Tempe is relatively even more (meaning they direly need cheap players), but is pragmatically quite a bit less (meaning they can't give up as much because they don't have those kinds of resources). However, if I give that first round pick up to Tempe, it doesn't cost me as much in future competition. Having that #1 pick will let Tempe hire one more big-name player to join the #1, but that's about it.

I know I'm the weirdo here, though.

I know that most teams just let the chips fall where they may as they work to make themselves better. I think that the game theory of competing with mega-organizations is quite an interesting one, though, and is one that few really seem to think all the way through. If every small market team worked as I suggest they work, the life of a GM of a behemoth team would be considerably more difficult.

But there I go again ...

[roncollins]

Besides, if I pass on a deal to help both my and my competitor's squads, there is nothing stopping the competitor from turning around and making a 2nd deal with a 3rd team that improves them and not you.

You are completely correct, of course.

But this rule of thumb looks a little different from the position of the big revenue team and that of the small revenue team. When a big revenue team dangles a nice looking package under the nose of a small revenue team (that they could afford to make a lot better but is still pretty interesting), one game theory line of thought says if I (the small revenue team GM) don't take it one of my other small revenue competitors will. So I'll take it. But that thinking is flawed because it gets caught up in the wrong idea. It's a line of thinking born of fear. The "better" line of thinking is this: (1) if I take it as is, there is 100% chance that I've made my competitive environment worse because now the big revenue team will DEFINITELY be better than me. You can tell this is true because they can afford to (and do) pay more for lots of things on the open market. (2) If I ask for more there is a chance the big rev team will disengage, leaving us both with nothing but then opening up a certain likelihood (that is not 100%) that someone else will take the deal.

Result #1 is a guaranteed loss because it improves the Big Rev team _more_ than it improves my Small Rev organization. Result #2 might be a loss, or might not. There is no way to determine this. It's dependent upon other GMs not being ... uh ... misguided? But making the deal locks in the loss. I would still prefer an option that is not guaranteed to make it harder for me to win.

So I have a greater chance of improving my overall lot by asking for a lot more from a big market team than most of us ever think about (we are not familiar with running big, $200M revenue organizations, so we don't think very much about how much you can afford. Instead we're thinking of whatever we consider "fair" market value...which is clouded by our own position!).

Anyway, before we even get into the question of how limited a market for a particular player or pick (whatever) might be, we're now at the viewpoint that there is (1) a reasonable chance that our fear is unfounded and that "no deal" at that price is the best overall option, and (2) that we can almost certainly get more from big revenue teams for rare commodities than what the average market price would say we can get. So, yes, I deal with big teams. But I do my best (when I can keep my head), to scale my prices, and I always keep the idea of "no deal" on the forefront of my mind if a deal helps me by (say) 2% vs. helping my bigger and badder opponent by (say) 4% ... because that 2% vs. 4% deal is a guaranteed loser for my organization.

EDIT: ADDED ...

But, when you area big revenue team, you want to make every deal you can make that is of "equal value" to both teams because receiving "equal value" (and, in reality, even unequal value to a point) is a relative advantage to you. You have more reserve dollars in your coffers than the other teams, after all.

There is NEVER a time when a big revenue team can make an "equal value" deal and dramatically reduce their overall competitive position. In fact, big revenue teams can almost always afford to give more "raw value" than they receive, because they can replace that value with future earnings.

[Leones]

Ton was a class act and great player. He was amazingly productive in the twilight of his career. Dracula indeed!

[Denny]

Those 16-20 "small market" teams are at a serious disadvantage, and every time one of them gives one of the top 6 or so big revenue teams a run of sweet draft picks (for example) the small market teams are feeding the very gap they have to overcome before they can begin to actually compete.

Ron, you've expressed quite eloquently here something I have (silently) shaken my head about many times but couldn't quite put my finger on....so many teams that are seemingly eager to give away things to the big clubs for less than they should.

Basically, if you are giving up draft picks in even an "equal value" deal with a team that has greater financial resources, you are losing.

[Leones]

Those 16-20 "small market" teams are at a serious disadvantage, and every time one of them gives one of the top 6 or so big revenue teams a run of sweet draft picks (for example) the small market teams are feeding the very gap they have to overcome before they can begin to actually compete.

Ron, you've expressed quite eloquently here something I have (silently) shaken my head about many times but couldn't quite put my finger on....so many teams that are seemingly eager to give away things to the big clubs for less than they should.

Basically, if you are giving up draft picks in even an "equal value" deal with a team that has greater financial resources, you are losing.

Thanks for highlighting this Denny. It's a very important point. Draft picks are traded far too often by those who need them most.

[roncollins]

Thanks for highlighting this Denny. It's a very important point. Draft picks are traded far too often by those who need them most.

And for considerably less than they should be able to get. Every time you look at a trade that sends a #1 draft pick to a big revenue team, ask yourself if you added "+ a $25M Future Player" to the listing, because that's often the real effect. By this I mean something like:

Small Revenue Team Receives:
SP Very Important Player

Big Revenue Team Receives:
#1 Draft Pick [+ a $25M future player]

This may still end up being a good deal for the Small Revenue Team, but in general will probably not be.

[Duane]

You don't need to convince Ky ... we have tried to build from within all along.

[Evas]

Ron, a few follow up points:

1. 1. If all teams acted as you suggest, and gave discounts to small market teams in trades, then yes that would make running a larger budget team harder. Because that is really what you are suggesting: If the small market team offers X and the large market team offers X + Y, take the small market team's offer. That might do something to limit the balance of power between large and small market teams in general, but every time you do that, it hurts the resources you have available to your organization by your bypassing the resources you could have gotten from the larger club.The net affect is that it takes rebuilding clubs longer to get there. I am a firm believer in getting in or out. Best to sell your excess, and at least get something for it, if you are getting out.

• 2. Looking at revenue is not a good way to look at resources available to teams. Budget is much better because it gets generated after Revenue sharing, which is a very big cost ($20M+) for a high revenue team and a very big windfall for a low revenue team. That narrows the gap to about a 2:1 ratios between the extremes, with 2/3 of the teams having budgets that are at least 90% (~120M) of the league average budget ($133.4M).

• 3.Another thing to consider is who is buying at all. I'll grant that larger budget teams probably win more that small teams. If low revenue teams are going to turn their noses up at offers from the high revenue teams in contention that are buying, they are much more likely to get nothing for what they are selling. That doesn't help low revenue at all.

But in general, you are of course right that small market teams needs to be especially careful with their resources and how they spend them.

[roncollins]

1. 1. If all teams acted as you suggest, and gave discounts to small market teams in trades, then yes that would make running a larger budget team harder. Because that is really what you are suggesting: If the small market team offers X and the large market team offers X + Y, take the small market team's offer. That might do something to limit the balance of power between large and small market teams in general, but every time you do that, it hurts the resources you have available to your organization by your bypassing the resources you could have gotten from the larger club.The net affect is that it takes rebuilding clubs longer to get there. I am a firm believer in getting in or out. Best to sell your excess, and at least get something for it, if you are getting out.

Yes, I'm saying that (depending on exactly how much more) it most certainly can be a bad idea to take more from a big market team than a small market team. I understand how that may not seem intuitive or logical. And I know how impossible it could be to draw some specific line on how big "Y" needs to be to put the big revenue team's offer over the top. But it is a correct statement on the whole and in very general terms.

A different thought experiment for us smaller revenue teams: if you have two deals on the table that you feel have the exact same return, and one is a deal with Tempe and the other is with Bakersfield,which one should you take? My answer is Tempe, because:

Net gain = Your Team's Improvement (measured against all teams) - Improvement of Your Trade Partner Relative to You

In both deals the first parameter is equal, but improving Bakersfield (a team with lots of resources) hurts your ability to win a championship more than improving Tempe. Realize that in either case, you still expect to help your trade partner. That's the concept of a trade. But there's helping and there's helping. The key is to realize that in a semi-efficient market, the price a big market team is willing to pay will always be greater than what a small market team is willing to pay. So, in reality, the very best thing to do in this thought experiment is to go to Bakersfield and say they need to give you more. In this frame of reference, it is a small market revenue team's "responsibility" to make big revenue teams pay more than they would make a small revenue team pay.

Your frame of reference says to focus on the first parameter only, which is really a big revenue team's goal (and is the only thing they need to think about because, being a big revenue team, there is almost no deal where the second parameter comes into play at all).

• 2. Looking at revenue is not a good way to look at resources available to teams. Budget is much better because it gets generated after Revenue sharing, which is a very big cost ($20M+) for a high revenue team and a very big windfall for a low revenue team. That narrows the gap to about a 2:1 ratios between the extremes, with 2/3 of the teams having budgets that are at least 90% (~120M) of the league average budget ($133.4M).

Raw revenue is not perfect, but it's easy to calculate. And you're right. $15-$20M (which is the general range being redistributed at the top and bottom of the scale ... that number is less as you get closer to average) is not inconsiderable. However ... we share 31% of all revenue, so that means that in 2021, the raw revenue gap between the very top end and very bottom revenue teams after sharing shrunk from ~$130M to about $95M (about $18M on both ends). But that still means a big market team received $95M MORE than a small market team _after_ sharing. To put that in context, that $95M gap is more than the entire revenue stream of the low revenue teams in both the SL and IL. Or, in other words, the top revenue team in the PEBA has 2x the resources than a small revenue team after sharing. To put it in another context, that $95M is MORE THAN THE PLAYER PAYROLL OF 13 PEBA TEAMS IN CURRENT DAY PEBA.

There are also some very interesting things to be learned about the influence of inflation on the PEBA/OOTP environment that I will not go into here (to do it justice requires a deep dive), but the bottom line is that PEBA revenue streams have grown at over twice the rate of player payroll (which is more closely related to budget, as you're suggesting should be looked at). This means the cost of players has DROPPED relative to the rate of revenue increase. Which is another hidden value of being a big revenue team--to put it bluntly: relative to the rest of the league, big revenue teams are more and more capable of distributing greater percentages of that growing revenue stream into things like player development, scouting, coaches, signing bonuses, off-season winter ball, building bigger stadiums, and anything else that "free cash" can obtain. All these things serve to quietly increase the gap that created the excess to begin with.

I've said it before and will say it again: this is a world of financial management at it's root core. But very few OOTP GMs ever see the full depths of it. :)

• 3.Another thing to consider is who is buying at all. I'll grant that larger budget teams probably win more that small teams. If low revenue teams are going to turn their noses up at offers from the high revenue teams in contention that are buying, they are much more likely to get nothing for what they are selling. That doesn't help low revenue at all.

Clearly teams can't just not make deals. And clearly teams need to make deals with big revenue teams. I have made several deals with big market teams in my time here.

My point is that it is in the best interest of GMs of a small revenue teams to understand that the "productivity value" a player, draft pick, or whatever has carries with it a different "price point" for teams at different points on the revenue spectrum. When a small revenue team includes a #1 pick in a deal with a big revenue team (which is certainly fine to do), they should fully expect that big revenue team will be willing to may more than most small revenue GM's consider to be "fair market" value...that in this case it is the small market GM is actually reducing their ability to win a championship by giving their strongest opponents "fair market value" as if it is a static value.

[roncollins]

1. If all teams acted as you suggest, and gave discounts to small market teams in trades

And just to be clear here, I don't consider my frame of reference to be giving any team a discount. I understand that's how it can look in some practice, but thinking like you're suggesting is the simplified frame of reference that gets small revenue GMs into hot water to begin with. The point is to realize you're trying to win a championship (not just "get better"). To consistently compete for championships, small revenue GMs need to make big revenue GMs pay more per win.

The only way to do that is to make big revenue GMs pay a premium above the market value they themselves would pay. :)

[Evas]

Ron, I'd say that if a team is willing to accept less from one team than another, that is providing a discount. Personally, I think that is just counter productive.

I disagree with your trade formula. I don't think that the other team's gain is my loss. A trade is not a zero sum endeavor in my eyes.

I could perhaps buy that type zero sum type of thinking as possibly effective strategy in regards to an team you are in a close race with at the moment. If you are tied for the division lead with a team, maybe you should avoid giving them something they want. Then again, if you are confident in your abilities, maybe you are comfortable bet your judgement is better than theirs... but I digress.

A massive 32 player game like we have going here in PEBA is much too complex to try to control the market for anything. You have to focus on what you get vs what you give. Teams have lots of options. I would bet that any willingness to take less from a poorer team is most likely counter productive.

I look at the trade market in PEBA more like a Flea market than trading properties in Monopoly. This is a much bigger world than most games and much harder to control.

On the resource issue, all of your points are completely valid. I just like going by budgets because it is really easy to see in Statslab, plus it is a little more accurate.

Really understanding the financial system is critical to be able to succeed and build. I was locked out of Free Agency my first off season in the LRS and lost my star catcher. From that point on I tracked every dollar LRS teams spent and used that to my advantage a few times.

Interesting point on the revenue growth relative to player salary growth. I think part of the issue with salaries not keeping up is the insane negotiation AI in OOTP. Free Agents are far too willing to destroy their careers by missing seasons rather than sign for a reasonable amount. This lead to a lot of veteran earning essentially zero and less money getting spent on Free Agency all together.

[roncollins]

Your argument seems to boil down to "it's too complex to figure out the full ramifications of that last parameter, so you can just ignore it and everything will be fine." (yes, ignore than man behind the curtain!)

My framework doesn't consider a trade as a zero sum game. In fact, the theory is completely predicated on the fact that a trade is not a zero-sum game, and that an "even" trade (if such a thing can ever exist) is always an advantage to the team with the most resources because that team can leverage the benefit better than the lesser team.

There are several ways to state this. For example, your argument that the goal is "make your team better." And that is true. But the _real_ goal is to win championships. So the real equation in any deal is "did you increase your chance to win a championship?" A trade between teams with a wide gap between revenue streams that has equal raw performance value trading hands has the ability to reduce that probability for the lower revenue team, even if it "makes them better." Weird, I know.

Have you run small-revenue teams before?

I mean, these kinds of arguments are the ones that corporate leaders make to suggest across the board raises in a company of 3% are "fair." This is not false. "Fair" is an interesting term. But, while it's one way to be "fair," it also means that the guy making $1,000,000 gets $30,000 more while the guy making $100,000 gets $3,000. So while raises make everyone happy, there's a new $27,000 gap in their standard of living come next year--and only one of them is going to get to go to Disney Land. :)

[roncollins]

In most cases, GMs probably can ignore or discount that last parameter. But when dealing with a mega-revenue team, it's at least important to keep the concept in mind even if you can't write a pristine equation to define it.

[roncollins]

Interesting point on the revenue growth relative to player salary growth. I think part of the issue with salaries not keeping up is the insane negotiation AI in OOTP. Free Agents are far too willing to destroy their careers by missing seasons rather than sign for a reasonable amount. This lead to a lot of veteran earning essentially zero and less money getting spent on Free Agency all together.

That has a piece of it, I'm sure. But I think there's considerably more to it than that. The payroll is more capped by budget than by the fact that a few guys won't sign contracts.