Finances thread

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Jared
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Finances thread

Post by Jared »

As there may be confusion about cash maxes and what not, I thought I'd repost Bill's most recent e-mail on the topic:

*************

After spending more time today than I should on this stuff – I have read a lot of forum posts, various league setups used by other successful OOTP X leagues and doing some backup testing myself here’s the plan:

We will not use a hard cap.

Will will tweak our current financial settings as follows:

The Soft Cap remains in place at 120% but the Luxury Tax increases to 50%

Owner control budget will be removed – you will have access to your revenue.

Cash MAX will be lowered to 50 million dollars – starting in 2011. It will then be lowered again to 40 million the following year. No more $$ hoarding. We will assume your owner bought a few new jets. This is an extremely common trait with all OOTP leagues that I have found/researched. Again our last league (OOTP 6) used a hard cap so we never had to deal with this until now.

Teams will be required, starting in 2012, to have a minimum salary of 40 million dollars.

These changes will have the following immediate effect:

You will likely have more money for FAs and extensions this season. You STILL have a limited amount of money – it’s just not controlled by your phantom owner and his silly/arbitrary/and IMO buggy budget and proposed payroll number. If you want to trade a player – specifically if you want to trade AWAY high priced vets before the trade deadline – you now can. The luxury tax should provide some incentive to keep teams from looking at their newfound cash and spending it like Mace at a Chinese whorehouse. You still need to make a profit or run the risk of being in the same boat as Juno/Mobile – which is a tough hole to get out of.

These changes should avoid pulling the rug out form under teams by not radically changing the finances again mid stream but should allow more trades – which was my main beef from the get go.

bill

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Post by Breadman-HagerstownGoldSx »

Hmm, at what level does the luxury tax kick in? I guess I missed this one.

So, If I'm reading this right and assuming it was say $100 million and my payroll was $120 million then I would pay an additional $10 million in luxury tax? (To the charity of my choice I assume)

When does that payment happen? During the season, before or at the end?

I love this addition BTW.

Steve

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Post by Jared »

Let's say the league average salary is $100m. That means that the cap kicks in at 120% of the league average, which would be $120m. For every dollar above $120m in payroll, you have to pay a 50% tax. (So if your payroll is $140m, you pay a $10m tax.)

I believe that the tax is paid at the end of the season. And all the tax money is equally distributed between the teams in the bottom half of payroll in the league at the end of the season, IIRC.

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