2015 PEBA financial and performance-based adjustments

[John]

After the conclusion of the playoffs, a handful of adjustments are made to select teams' Fan Interest, Fan Loyalty and/or Market Size. These adjustments are related to a variety of factors, including profitability (or lack thereof), owner cash infusions, current-year vs. historical performance, and more. The time has come to announce the 2015 end-of-season adjustments. You will see these changes reflected after our next sim.

Fan Interest penalties
League rules require teams to make strides towards profitability. There are three circumstances which can trigger financial-related Fan Interest penalties:

1. Losses beyond -$30,000,000 are erased upon the end of a season, but there is a penalty to fan interest for every $2.5M below -$30M a team ends a season with.
2. The first time a team ends a season in the red, the team goes "on watch". Until the team finishes a season in the black, the team will suffer a fan interest penalty at the conclusion of every subsequent year in which it:
   1. Remains in the red, AND;
   2. Fails to make progress towards break-even cash on hand.
3. A fan interest penalty will be applied for every $2,500,000 received from your team's owner. If the team has available Ballpark Funds, the owner-provided cash will be deducted from those funds. Any portion of the owner-provided cash infusion that is covered by a team's Ballpark Funds will not count towards a fan interest penalty.

In 2015, the following teams met at least one of the above criteria and will be assessed a Fan Interest penalty that will be reflected in our next sim:

• Palm Springs

The following teams are "on watch" and must make progress towards break-even cash on hand in order to avoid Fan Interest penalties in subsequent years:

• Charleston
• Florida

Performance-based Adjustments
Teams are evaluated in a number of different areas related to on-the-field performance. All evaluative criteria are examined over a one, three and six-year period, with greatest weight placed on three-year performance. Team data is entered into a custom formula that generates a percent chance for Fan Loyalty and Market Size gain/loss for each team. While many teams will have only a chance to gain or lose ground, some teams may have a chance for both, while others may have no chance to change whatsoever.

Once the percentages are generated, a roll is made against the gain/loss chances for each team; one roll each for Fan Loyalty and Market Size. A "failed" roll is one that is within the percentage chance for loss, while a "passed" roll is one that is within the percentage chance for gain. Whenever a roll fails or passes, there will be a one-level adjustment down/up in the applicable area for that team. Because Fan Loyalty and Market Size each get their own roll, it is possible for a team to experience a drop in one area and a gain in another.

The system is designed to produce a modest number of changes per year (it may produce no changes in some years). There is also protection against rapid changes. A minimum of two seasons must pass between fan loyalty changes and a minimum of three seasons must pass between market size changes. Finally, winning the Planetary Extreme Championship grants you exemption from Fan Loyalty/Market Size drops for three seasons.

Performance-based adjustments are completely independent of OOTP adjustments. It is entirely possible for a team to receive a Fan Loyalty/Market Size increase/decrease from both OOTP and performance-based adjustments in the same season. OOTP-generated status changes do not preclude performance-based adjustments under any circumstances.

In 2015, the following teams experienced performance-based Fan Loyalty/Market Size adjustments that will be reflected in our next sim:

• New Orleans: Market Size DROPS to "Rather Big"
• Omaha: Market Size INCREASES to "Above Avg."
• San Antonio: Fan Loyalty DROPS to "Very Good"

[Matt]

Figures. We get hit with something every year. We feel like Peba's whipping boy.

[Jason]

Well I am happy to see that our success over the last three seasons has translated into a market size increase. Does anyone know how this may impact our attendance? All else being equal would more seats be filled if we were not selling out?

Thanks...