Evas wrote:
- 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.