Orphan School - Lesson 3: Cash

A continuing series to allow new owners of Orphan teams to catch up:

Some of you might be launching into transactions right away this week.  That's great, but just a few notes about cash and player salaries before you find yourself in a hole.  See Rules: Finances for full details.  You may think you have a roster full of dead weight, but there are financial implications of transactions you should be aware of before you start cutting guys.  Sometimes, you may have to work around roster problems you inherited in creative ways.

Make sure you read the rebate exceptions at the bottom of this post.

How teams get cash:

• All teams got 40-plus million distributed to them in December.
• All teams get 2 million at Opening Day.
• There's an extra million handed out at the end of May, June, and July.
• In small amounts, you get cash for every win plus there is cash distribution each week dependent upon your place in the division.
• Teams get cash for final division placement and post-season results.

That's pretty much it.

On the other hand, your team has already paid the salaries of every team on your roster.  Every time you sign a player from here on out, you will also need to pay that salary right away.  But here's a "bonus" of sorts: if you cut a player, you get some sort of salary rebate.  (Same thing goes on salaries when you pick up a player in a trade or trade away a player).

Salary assumption and rebates are based on a sliding scale depending on how much is left in the season - take a look at the Weekly Transaction Deadlines for the season.  The 3 columns on the right of the deadlines table show you the salary percentage you have to pick up or get back in transactions.

So, in February, as you sign players, you need to pay 100% of their listed salary.  BUT, you'll only get 50% of a salary back if you cut a player.  Take a look at Week Zero - April 5....at that point the salary rebate goes to 80% (why the difference?  When we started the game, salary rebate in the off season was zero...a rule change put it up to 50%).  So, you never get 100% of a salary back when you cut a guy - 80% is the maximum.  There are 25 weeks in the regular season, so essentially we cut off 4% from the value each week.  When we get to Week 15, the 40% mark, there are 2 important changes: a) all signings the rest of the season are at 40% of salary and b) no more salary rebates.

Trades are a slightly different story - right now if you trade a player away you get 100% of the player's salary in rebate.  And later in the season, when we hit Week 15, the salary rebate/assumption for trades continues to decrease each week by 4%.

So, at the moment, there is more financial benefit to you to trade a player away than cut one.  This is also a way that you can fill out your roster if you're short on cash - trade away one expensive player for a couple of cheaper ones (etc.).  More on that another time.

Two important exceptions on salary rebates:

1. For players with salary 200 or below, you NEVER get a rebate when you cut them.
2. Contracts...do you have a "2010" or "2011" in the Contract column for a player in your roster?  This is important....this player was signed to a "long-term contract" in 2009 or earlier.  At that time, a cash amount was paid for the entire length of the contract.  Until that time runs out (so 2010 = the 2010 season), no more cash needs to be paid for him.  BUT - you never get a salary rebate for cutting or trading away a player on a multi-year contract.  Be aware of that before you start getting rid of these guys thinking you'll get extra cash.  Contracts are a much deeper subject - you should read the rules about them.

Again, if you're short on cash, you can use contracts to your benefit in trades.  Pick up a player from another team who has a contract for 2010 and trade away a guy who doesn't have a contract.  You get a salary rebate for trading away your guy and not have to pay anything for the guy you're getting.

One final note - if you're on the other end of the cash balance scale, there is a "use it or lose it" aspect of cash to retain a competitive balance.  You can only carry a balance of 5 million (listed as 5000 on your roster page) into the season.  Anything above that will be cut off in early April.