MLB:2006
by 989 Studios
"Business Management" FAQ
by Mr. Kim D. Rodieck
also known in the gamefaqs.com world as "economiester"
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Table of contents:
-version history
-introduction
-explanation of cost structure
-checking your financial health
-pre-season business management
FRANCHISE GOALS
RESTRUCTURING YOUR ROSTER
RELEASING PLAYERS
RESTRUCTURING PLAYER SALARIES
HIRING A STAFF
TRAINING AND REHABILITATION
TELEVISION CONTRACTS AND PRIMARY ADVERTISER
BILLBOARD ADVERTISERS
LOANS AND BANKING
VENDORS AND FACILITIES
TRANSPORTATION
-in-season business management
PLAYER ADVERTISING
TEAM ADVERTISING
TICKET PRICES
CONCESSION PRICES
PARKING PRICES
ADDING VENDORS
ADDING NEW SEATS
-end of the year business management
SHARED REVENUE TAX
RESIGNING PLAYERS
TRADING PLAYERS
SETTING NEW ROSTERS
AMATEUR DRAFT
LOOSE ENDS
-conclusions and final words
-reader's Q&A
-thanks
-contact info
-legal stuff
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Version History
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Versions:
v.1.00 - 3/15/05 - first version contains the basics of
profit building
v.1.01 - 3/22/05 - corrected a few spelling and syntax
errors
v.1.11 - 4/13/05 - added some observations about
promotions, ticket prices, and parking prices.
v.1.21 - 6/5/05 - added some observations in several
sections. added a few new sections
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Introduction
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Thank you for checking out my FAQ page for MLB 2006. I
earned my BA in economics from the University of Washington
in 2005, so I am naturally drawn to MLB 2006 because of the
incredibly deep franchise mode that this game offers. I
spent a lot of time playing MLB 2005 and figuring out the
rules for how to make a profitable franchise, and I used
that knowledge as a foundation for earning profits for MLB
2006.
Rather than making this FAQ simply about different business
aspects of the game and presenting them in no particular
order, I have decided to organize these aspects into
different parts of the baseball season. This way, if you
want to start a new franchise, you can follow the steps
contained in the preseason sections. As your season
progresses, you can check in on the in-season section, and
then you can check out the end-of-the-season section to get
your self ready for the next season.
Before reading this FAQ, let me just remind the reader that
although this FAQ certainly will give you the tools
necessary to maximize revenues, this is not necessarily a
cost minimizing FAQ. There may be some areas in the game
where you may want to spend significant money, and there is
nothing wrong with that. Some teams, like the Yankees, have
very high player salaries, and this will reduce your
profits, but you can still be very profitable even with
such costs. With regard to costs, this FAQ will teach you
how to manage cost...not minimize it.
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EXPLANATION OF COST STRUCTURES
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Understanding this section is very important to having a
good understanding of how costs are paid.
First, almost all costs and revenues are tracked on a daily
basis. In other words, you will have to pay out money for
salaries, training, rehabilitation, and other things for
every day of the season (including the playoffs if you are
skilled enough to make it to the post season). For example,
if you have a player who has a yearly salary of
$10,000,000... then you will have to pay $55,555 per day to
that player. This same rule applies for all players as well
as coaches and scouts. Training and rehabilitation follow
the same rule. If you decide, at the start of the season
to, devote $30,000,000 to training, then that will cost you
$166,667 per day.
The above principal is very important to making decisions
about hiring new personnel(which is discussed later). Here
is how to view costs with a simple example. Suppose that
you have a hitting coach who is being paid $1,500,000 per
year. You decide that you want to hire a new hitting coach
who wants $2,000,000 per year. What is the cost of the new
coach? The answer is $500,000 because that is how much more
money you have to spend in order to upgrade your coach. But
we want to view this upgrade in terms of daily costs. Since
the cost of the upgrade is $500,000, that added amount
spread out over the period of (approximately) 180 days is
just $2,778 extra per day.
Costs like those mentioned above have to be paid every
single day of the season, no matter what. You will notice
that your balance sheet will be in decline when you have a
day off or if you are playing games on the road. That's
because you are paying the cost of salaries and such during
this time.
When you are playing home games, you will be able to
collect revenue from concessions, tickets and parking. This
is when you earn your profits. You are still paying out the
costs mentioned before, but you will also be earning
revenue from which costs will be deducted. The difference
between revenue and cost is your daily profit. Just
remember that you can only earn profits when you are
playing at home.
The cost of things like new vendors, additional seats,
training and rehab facilities are one-time costs, and you
do not pay for these over a time period(aside from
maintaining the facilities of course).
Transportation is a cost that is paid in full at the start
of every year. This will be discussed more later.
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Checking your Financial Health
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There are two ways to check the financial health of your
franchise. The first way is by checking your balance sheet
and the second way is to check your funds(which I refer to
in this FAQ as cash-on-hand). Let me talk about the balance
sheet first.
Your balance sheet has two major categories which are
INCOME and EXPENSES. Your NET INCOME is income minus
expenses. The balance sheet is just a year to date snapshot
of your profits(or losses) for the year. The only real
reason to be concerned with the balance sheet is that it
can be used as a tool to determine how much money in
profits you are earning per home game. The net income
figure is only meaningful at the very end of the year since
it shows how much money was added to your cash-on-hand, but
let's break down the balance sheet so that you know where
everything that you do in your franchise is logged.
INCOME
FACILITIES: money earned by selling concessions, tickets
and parking.
LICENSING/AD SALES: money earned from TV, billboard and
primary advertising contracts.
SHARED REVENUE: this is the rebate that you get at the
start of the year from the shared revenue tax.
LOANS: If you took out a loan, then the amount of that loan
is logged here.
EXPENSES
STAFF SALARIES: this is where the salaries of your coaches
and scouts is logged.
TRAINING/REHAB: the amount of money that you spend on
training and rehabilitation is logged here.
FACILITIES: When you spend money on new vendors, new seats,
training facilities, rehab facilities, the cost will be
logged here. The cost of transportation is also logged here
at the start of every year.
MARKETING: Money spent on player advertising, team
advertising and promotions.
BANKING: Money spent on repaying any loans that you have
taken out.
SHARED REVENUE: At the start of every year(except the very
first year), the amount of shared revenue tax paid is
logged here. The shared revenue expense, for you, will
almost always be higher than the shared rebate resulting in
a large negative balance sheet at the start of the year.
PLAYER SALARIES: Money spent on player salaries.
Whenever you play a home game, you will notice that your
net income is rising. That's the income that you earned for
a home game minus the expenses paid. When you add a new
facility, like a vendor or additional seats, your net
income will fall because your added an immediate expense
without adding any immediate income.
In my opinion, cash-on-hand is the best way to judge your
financial health. This tells you how much money you have to
add vendors and seats and such as well as your ability to
absorb the hit from the shared revenue tax and
transportation costs. The balance sheet simply tells you
how much money was added to the amount of cash-on-hand that
you started the season with.
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