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Post Info TOPIC: Eric Explains How Money Works


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Eric Explains How Money Works
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As a public service, I've decided to post an explanation of this complex topic.  It is always the hardest part of the ARBA rules for new owners to understand and can even trip up some who have been around for a while.  It's almost as if our rules have developed over the course of 3 decades and been written by lawyers...not to imply anything negative about that noble profession.  I recently answered some questions for individual owners, but thought that it would be best to share a more thorough overview on this topic with everyone.  Who knows, perhaps even veterans will learn something.   

  • Money at Start of League Season Determined by: 
    • Balance carried over from prior season + 10% interest
    • $7 million base (forfeited if team failed to win at least 40 games)
    • Position/Wins - $10K for each win, up to max of $950K 
    • Playoff Money - There's a pretty straightforward chart that I won't replicate here
    • Fines and Penalties - YOC  discretion, based on player overusage, late reporting, failure to play games
  • 1st Trading Period (typically runs from end of regular season through 12/31)
    • Trades can include cash, players at any salary level (A to E), and draft picks
    • These trades do not have any direct financial implications unless cash is included because salaries haven't been paid yet
  • Rosters and Salaries Due (1/10 this year, which is typical)
    • Teams have to make decisions about all players on their rosters at the time.  
    • For "carded" (eligible to play in current season) players you either pay the designated A or B level contract, pay C contract or cut them into FA.  
    • For non-carded (minors) players, you either pay the E contract or cut them.
    • Salaries tied to these roster decisions are collected at the time and will NOT be refunded, except for C players as described below.
    • Therefore, teams are responsible for their own salary obligations for the current season.  Those are not transferred in trades or refunded for cuts.
  • Dead Zone
    • Trades and other transactions cannot be made between turning in rosters and the CFA Auction.  Enjoy the silence...
  • CFA Auction (we just went through that madness)
    • For any C players retained by their original team, that team immediately pays the difference between the matched bid and the $125K paid at roster time.  For no bids, the team simply retains them for the $125K already paid.
    • For any C players moving to a new team, the new team immediately pays their winning bid for that player.  In this scenario, the original team is refunded their $125K and receives 1/2 the winning bid in compensation.  This is the only way salaries are ever refunded.
    • C player salaries for the following season are determined based on the final bid, as shown in a nice chart, but that's outside the scope of today's discussion anyway.
    • With FA players, whatever team had the winning bid immediately pays that amount. 
    • Updated money balances were published on Monday (2/20) based on the above.
  • 2nd Trading Period (runs from conclusion of CFA to just before the season starts, 4/3 this year)
    • Once again, teams can trade cash, players at any salary level, and draft picks.
    • The key difference is that the current year's salaries have already been paid for any players involved in these trades.
  • Inverse Order Draft (currently scheduled to start 3/18)
    • Teams can draft any available carded players for $200K each and uncarded players for $40K each.
    • As with the CFA, those salaries are collected immediately.
    • Therefore, teams can't spend more money than they have, but there aren't any roster restrictions on # of players at this point.
  • Roster Cutbacks Due (currently scheduled for 3/26, but date may need to be adjusted depending on when IOD ends)
    • This is when teams have to get within the roster limits: no more than 60 players total, no more than 35 carded players, no more than 30 carded players who aren't minors eligible (low enough PA or IP to be stashed for most of the season)
    • Therefore, we typically see teams trying to sell off excess players at this time for whatever they can get before having to cut them for nothing.  Remember, no refunds!
    • From this point on, teams must stay within the roster limits.
  • Waiver Draft (currently scheduled for 3/30)
    • Teams can fill any open roster spots (carded and uncarded) for $40K each, if they have enough cash to pay for them.
    • When teams run out of roster spots and/or money, they can no longer make waiver picks.  Of course, this could be true before the draft even starts.
    • I'll take this opportunity to note that teams can sell and trade waiver picks, which can be nice for teams who can't participate.
  • 2nd Trading Period Ends (currently scheduled for 4/3)
    • At this point, rosters are set for the season.  So we'll actually get to play soon after that.  Hurrah!

 

Okay, today's lesson is finally concluded!  That was rather exhausting, so I hope some of you find it helpful.  Feel free to ask any follow-up questions.  Of course, understanding the rules does not make one immune to poor salary-related decisions.  I've certainly made my share, including a few this year... 

- EB

 

 



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Travis

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Position money is forfeited if you fail to reach 40 wins, not base salary of $7 million.



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Senior Member

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Yes, Travis is definitely right about that.  It's very rare anyway, but would probably never happen if $7 million were on the line instead of $400-500K!  



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Anonymous

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How about posting that nice chart of post-C contracts based on bid?



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