mac
12-28-2006, 08:49 PM
I am interested in how players evaluate contracts. In real life the bonus is the most important as it is guaranteed. the first years salary is more uncertain as the player could be cut or forced to accept a reduced salary in the future. The second years salary should be even more uncertain etc<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o:p></o:p>
<o:p> </o:p>
Therefore players should be willing to trade off large future salaries for a smaller increase in current bonus and require a large increase in future salaries to accept a slightly smaller bonus. I want to find out what the formulas are that govern how players negotiate the contracts and does their age, loyalty, ability or agent stubbornness affect this.<o:p></o:p>
<o:p> </o:p>
what I did was at the start of each season I attempted to re-sign all players with 1 year remaining who requested a multi-year contract.<o:p></o:p>
<o:p> </o:p>
I then adjusted their request in one of several ways<o:p></o:p>
<o:p> </o:p>
A) swap bonus for 1<SUP>st</SUP> year salary <o:p></o:p>
I increased 1<SUP>st</SUP> year salary to the level of the second year (leaving all the others the same) and decreasing the bonus by the same amount. This was always refused so I then increased the bonus to make up for it until eventually they accepted I then calculated the discount rate the player appears to have for 1<SUP>st</SUP> year vs bonus.<o:p></o:p>
e.g player X wanted 5,620k bonus 690k in year 1 and 3,380k in year 2<o:p></o:p>
I offered 3,380k in years 1 and 2 with a smaller bonus and kept increasing the bonus until he accepted. He eventually accepted 3,500k so he took a 2120k drop in bonus for a 2,690k increase in first year salary 2690/2120 = 127% so the discount rate is 27% for this player. <o:p></o:p>
I’ve done this about 12 times and gotten rates of 27% to 48% when looking at long term contracts. this appears to be independent of palyers ability or (surprisingly given the decline in talents) with age. Agent stubbornness is not a factor but loyalty is with an R2 of 0.68. Implying that more loyal players have smaller discount rates.<o:p></o:p>
<o:p> </o:p>
B) swap all future salaries for a big bonus<o:p></o:p>
The opposite of A as I dropped the requested salary to the minimum possible and then began to increase the bonus until the player accepted. E.g Player Y wanted a 4 year contract with 1750K bonus and 6110k salaries but accepted a 4 year deal with 3000k bonus and 2550 salaries in other words swapping 3560k in salaries over 4 years for an extra 1250k bonus now. <o:p></o:p>
<o:p> </o:p>
I assumed that the discount rate was compounded each year so 120% in year 1 becomes 141% in year 2 and 172% in year 3. I calculated that the annualised discount rates from 17-72% and although I only did this about 10 times. Again age ability and agent were not a factor and loyalty was less R2 at 0.16<o:p></o:p>
<o:p> </o:p>
C) the effect of a last year void incentive.<o:p></o:p>
Making the last year void had no effect the two times I have tried it. Although as these players were in their 5<SUP>th</SUP> and 7<SUP>th</SUP> year looking for 5 year contracts that not surprising.<o:p></o:p>
<o:p> </o:p>
Problems with this approach are that there may be some randomness built into the negotiations which will create noise in my small sample.and I didn’t increase it by exactly 10k each time as it is tedious to do this. Also do players react differently if they learn that you will eventually say yes to other teammates in the same way that players remember mistreatment and other gms get annoyed if you keep shopping players? <o:p></o:p>
<o:p> </o:p>
Technique B is probably suffering from the assumption that the discount rate remains the same over long periods of time. However is this the first evidence of loyalty affecting contract negotiations? Is there any mods that could automate this process.<o:p></o:p>
<o:p> </o:p>
If you want to repeat this you should set up a new SP game as if you offer a contract the player accepts and you then pull out and offer a lower one the player may refuse to negotiate at all which caused me a lot of difficulty when I tried this with my main team.<o:p></o:p>
<o:p> </o:p>
Overall there may be a lot of noise in the system preventing the application of a simple formula and I don’t know if this result can be compared with real life as we don’t know all the details of real nfl contract negotiations.<o:p></o:p>
<o:p> </o:p>
For anybody still reading at this stage the conditions were quite standard: 20-80 cap inflation wall st. difficulty 200 injuries.<o:p></o:p>
<o:p> </o:p>
Therefore players should be willing to trade off large future salaries for a smaller increase in current bonus and require a large increase in future salaries to accept a slightly smaller bonus. I want to find out what the formulas are that govern how players negotiate the contracts and does their age, loyalty, ability or agent stubbornness affect this.<o:p></o:p>
<o:p> </o:p>
what I did was at the start of each season I attempted to re-sign all players with 1 year remaining who requested a multi-year contract.<o:p></o:p>
<o:p> </o:p>
I then adjusted their request in one of several ways<o:p></o:p>
<o:p> </o:p>
A) swap bonus for 1<SUP>st</SUP> year salary <o:p></o:p>
I increased 1<SUP>st</SUP> year salary to the level of the second year (leaving all the others the same) and decreasing the bonus by the same amount. This was always refused so I then increased the bonus to make up for it until eventually they accepted I then calculated the discount rate the player appears to have for 1<SUP>st</SUP> year vs bonus.<o:p></o:p>
e.g player X wanted 5,620k bonus 690k in year 1 and 3,380k in year 2<o:p></o:p>
I offered 3,380k in years 1 and 2 with a smaller bonus and kept increasing the bonus until he accepted. He eventually accepted 3,500k so he took a 2120k drop in bonus for a 2,690k increase in first year salary 2690/2120 = 127% so the discount rate is 27% for this player. <o:p></o:p>
I’ve done this about 12 times and gotten rates of 27% to 48% when looking at long term contracts. this appears to be independent of palyers ability or (surprisingly given the decline in talents) with age. Agent stubbornness is not a factor but loyalty is with an R2 of 0.68. Implying that more loyal players have smaller discount rates.<o:p></o:p>
<o:p> </o:p>
B) swap all future salaries for a big bonus<o:p></o:p>
The opposite of A as I dropped the requested salary to the minimum possible and then began to increase the bonus until the player accepted. E.g Player Y wanted a 4 year contract with 1750K bonus and 6110k salaries but accepted a 4 year deal with 3000k bonus and 2550 salaries in other words swapping 3560k in salaries over 4 years for an extra 1250k bonus now. <o:p></o:p>
<o:p> </o:p>
I assumed that the discount rate was compounded each year so 120% in year 1 becomes 141% in year 2 and 172% in year 3. I calculated that the annualised discount rates from 17-72% and although I only did this about 10 times. Again age ability and agent were not a factor and loyalty was less R2 at 0.16<o:p></o:p>
<o:p> </o:p>
C) the effect of a last year void incentive.<o:p></o:p>
Making the last year void had no effect the two times I have tried it. Although as these players were in their 5<SUP>th</SUP> and 7<SUP>th</SUP> year looking for 5 year contracts that not surprising.<o:p></o:p>
<o:p> </o:p>
Problems with this approach are that there may be some randomness built into the negotiations which will create noise in my small sample.and I didn’t increase it by exactly 10k each time as it is tedious to do this. Also do players react differently if they learn that you will eventually say yes to other teammates in the same way that players remember mistreatment and other gms get annoyed if you keep shopping players? <o:p></o:p>
<o:p> </o:p>
Technique B is probably suffering from the assumption that the discount rate remains the same over long periods of time. However is this the first evidence of loyalty affecting contract negotiations? Is there any mods that could automate this process.<o:p></o:p>
<o:p> </o:p>
If you want to repeat this you should set up a new SP game as if you offer a contract the player accepts and you then pull out and offer a lower one the player may refuse to negotiate at all which caused me a lot of difficulty when I tried this with my main team.<o:p></o:p>
<o:p> </o:p>
Overall there may be a lot of noise in the system preventing the application of a simple formula and I don’t know if this result can be compared with real life as we don’t know all the details of real nfl contract negotiations.<o:p></o:p>
<o:p> </o:p>
For anybody still reading at this stage the conditions were quite standard: 20-80 cap inflation wall st. difficulty 200 injuries.<o:p></o:p>