2013 PEBA financial and performance-based adjustments

[John]

Shortly 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 either to a sustained lack of profitability (for Fan Interest) or to teams' performance in a variety of sectors over a range of time (for Fan Loyalty and Market Size). The time has come to announce the 2013 end-of-season adjustments. You will see these changes reflected after our next sim.

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

1. Losses beyond -$27,500,000 are erased upon the end of a season, but there is a penalty to fan interest for every $2.5M below -$27.5M 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.

In 2013, the following teams met one or both of the above criteria and will be assessed Fan Interest penalties:

• No teams qualified for Fan Interest penalties

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:

• Gloucester
• Kalamazoo
• New Orleans
• Palm Springs
• San Antonio
• Tempe

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.

In 2013, the following teams experienced performance-based Fan Loyalty/Market Size adjustments:

• Arlington: Market Size INCREASES to "Big"
• Bakersfield: Fan Loyalty INCREASES to "EXTREME"
• Duluth: Market Size DROPS to "Above Average"
• Fargo: Market Size INCREASES to "Rather Big"
• Florida: Market Size INCREASES to "Above Average"
• Kalamazoo: Fan Loyalty DROPS to "Good"
• Palm Springs: Fan Loyalty DROPS to "Great"

[Bill]

Rats - Duluth got the double hammer this year both in-game and externally. Well, luckily most of our players are cost controlled right now so it shouldn't have much short term effect.

[Alan Ehlers]

I just took a look at the Tempe finances and arbitration situation. I guess there'll be a few tough to decisions in front of me. :eek: