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Post by Commish_Ron on May 20, 2020 9:56:15 GMT -5
In theory, I could do a bad job managing my finances, with one of the higher payrolls and higher budgets I could not be in the green for revenue. But then GET revenue from smaller market teams, who did a good job managing finances? Even if it’s 6 mil. That’s 6 mil too much for me to be bailed out on bad choices. It seems, in theory, that the well managed teams will just be covering losses for the non-well managed teams. Am I reading this wrong ? Example would the Royals, who had a 202 mil budget and a 182 payroll be given money in the new setting, while the old one has them paying out 8 mil due to them being one of the highest payrolls and budgets. A difference of 10 mil is quite a lot No matter what the system is there will always be outliers. In the current system Atlanta would receive revenue sharing instead of paying in even though they had the 11th highest revenue. They made $178M but decided to only commit $60M to payroll. That nets them a positive swing of over $8M in the current system. So, while your point is valid, it still makes more sense to me fundamentally to revenue share based on income over what a team decides to commit to payroll.
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Post by sansterre - Milwaukee Brewers on May 20, 2020 10:26:13 GMT -5
At the high end of luxury tax, you get punished for having a high payroll. On the high end of revenue sharing, you get punished for having a high revenue.
So a team with a very high payroll but comparably low revenue (like Kansas City) benefits from the change.
A team with disproportionately low payroll but comparably high revenue (like Atlanta, San Fran or Texas) gets hit hard for this because they're being taxed on money that they're not spending on payroll.
Basically, if you put most of your revenue into payroll, this change helps you. If you spend considerably less on payroll than your revenue suggests, this change hurts you.
It is an interesting point though, the idea that over-committing to your team and then struggling, by hurting your revenue you benefit from this change. Of course, your owner is going to gut the crap out of your budget, so all it's really doing is mitigating how hard it hits you.
Conversely, sitting on a ton of money and not spending it on payroll is still an advantage. You can roll with a low payroll for your revenue and then spend all your money on Development Budget, International Scouting, IAFAs and Draftee signing bonuses. You're still getting a ton of benefit from that revenue, but under the luxury tax you can actually make money from the league (which is how you can have multiple teams with above average revenues getting paid by the league to not put their money in payroll). At the same time, low-income teams trying desparately to compete (and so putting most of their money on payroll) get hammered by the luxury tax. You get basically get Kansas City paying Atlanta even though Atlanta made $15-20M more.
I get where you're going. And there's an argument to it. I just think the new way is more fair than the old way.
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Post by Tim_GiantsGM on May 20, 2020 17:24:05 GMT -5
Attached is an example that uses YTD 2054 data as posted on StatsPlus as the source. The final results will vary slightly after playoff revenue is earned by the playoff teams. Nevertheless, I believe the presentation in its current state illustrates that the proposed change achieves the objective of providing teams in need with additional cash to work with. Note that the "Revenue Sharing (Current Ron)" column lists the amounts derived by Ron using the current system. "Revenue Sharing (Proposed)" lists the amount of the tax or refund using the proposed system. I have thought for a long time that market size does not correlate with revenue. This spreadsheet seems to support that feeling. As we know, market sizes can vary over time (I recall from the historical data I gathered that for a long time the Giants were in an average market and many years ago the Mets were in an astronomical market). I think the ability to generate revenue is a factor of GM moves to appropriately set ticket prices, generate a profit by effectively controlling expenses, win games, acquire popular players, etc., etc. All but six PBL teams currently play in average or above markets. Of the six, four are in below average markets and two are in small markets. I highlighted them in the spreadsheet. Cleveland is an excellent example of a small or below market team that generated above average revenue. They ranked 4th in the PBL! Per this analysis, the proposed change will provide four of the smaller market teams with more cash than under the current system. One will receive cash, but not quite as much. Only Cleveland will return more cash via tax than under the current system. One final observation of note: the PBL is a $5.1 billion industry! I hope this helps clarify the impact of the proposed change.
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Post by Commish_Ron on May 22, 2020 15:52:24 GMT -5
This poll passes. We will switch from luxury tax to income tax set at 15%
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