PowerPlay Revija

I decided to write this article since it will address a few of the more popular questions I receive when managers come to me for advice. To start, I recommend you familiarize yourself with an article I published back in January 2012; it will provide an added background justifying what I’m about to share in addition to showing some cold-hard numbers. This will give a foundation to back what some may consider to be outlandish claims that are about to be made by myself and the brainchild of this endeavour: saint2e. This article is directed towards mid-level teams, those in the second and third division with a currently-balanced budget.

Money is everything in our beloved game. You need to make more money to build this, that and the other thing to keep pace with the competition. However, what many people forget is that saving a buck is the same as making a buck. One of the biggest expenses teams face is staff and their enormous salaries. Unless you have fantastic facilities, there really is no reason to have fantastic staff and especially no reason to carry an excessive number of staff. Refer to the aforementioned article linked above as a guide for how good of staff you should carry.

So far all I’ve done is tell you nothing new. But let’s cut to the chase here. Unless you’re one of the top teams, to get from A to B you’re going to have to ruffle some feathers and make some tough decisions. This came for me several seasons ago. Both saint2e and I had good teams, low-level I.1 / high-level II.X teams, but couldn’t get over the hump. The teams ahead of us were gaining and our accounts were stagnant. What we did was the best decision I was ever convinced to make (I’d love to take the credit but it was saint2e’s doing): cut expenses down to nothing and invest primarily in our arenas. The following will summarize the plan and outcome with justification followed by saint2e’s story in more detail. It is my hope that this information will help some of you to start to turn a serious profit and be serious contenders. There is a catch here, there always is, and that is that this is a long-term plan. It will take several seasons to complete but I assure you it is well worth it.

Summary:
1) Get rid of all staff that are too good for your facilities. If your facilities are decent, carry 2 coaches, physios, custodians, sporting directors (youth training only) and physicians. There is no need to carry lecturers (see previous article) or managers (excluding when it comes time for sponsor offers). This will significantly decrease your expenses.
I was emailed recently by a manager who was in financial trouble. Staff salaries were 66% of his expenses at $36M in the first 18 days, on pace for $225M/season in salaries. It took both his general and media sponsor to cover this expense leaving a mere 9M/18 days (60M/season) to cover player salaries, facilities and venue maintenance in addition to any construction costs. He is where saint2e and I were several seasons ago. Sell the staff, (if they don’t sell fire them) and cut your expenses down.

2) Invest exclusively in your arena/stadium. One of the biggest surprises with this plan’s outcome was the amount of money you make from having an adequate venue to host your games. Sure, ticket revenue is nice at $9+M/game by the time you take into account souvenirs but what wasn’t expected was the amount of money a media deal would be worth. What was the end result of pumping all this time and money into my arena?

20M/week is what each of my general and media sponsor are worth in hockey. A large rink can effectively double your income just from the media deal alone. Now consider the game-related revenues. So far this hockey season I’ve generated nearly $300M in game-related revenues (tickets, souvenirs etc.) in addition to $45M in skybox leases.
“But what about your expenses!? They must be ridiculous!” some say. Sure, your rink will cost you a lot per day to maintain, but that is where your maintenance center comes in. Keeping in mind the numbers I just threw at you, here is what I’ve paid in expenses this season: 60M – player salaries, 104M – staff salaries, 66M – facilities maintenance, 112M – rink maintenance for a grand total of $342M in salaries and maintenance-related expenses. The $345M from tickets, souvenirs and skyboxes covers this nicely, leaving the $40M/week from both sponsors to go towards other items. This in turn allowed me to max all my facilities and get my hands on some elite prospects, something that would have been out of the question had I stayed on the old path.

3) Invest in your facilities. I mentioned just above that I turned to facilities after my rink started making me some serious cash. One of the hardest parts about this plan is watching your team fall behind in terms of player training and facilities. It is worth it I assure you. In order to make the funds necessary to get from lvl 12s and 13s to 15s you need a massive influx of cash. Selling players is a temporary solution. Address your facilities first before addressing your now old and undertrained players.

4) Reacquire staff and players to complete the rebuild.

It appears my summary is a bit long-winded but I hope you found it informative. I will leave you with the story of saint2e’s journey, some of you will likely be able to relate to the former state of his team. He may be a Leaf fan but it is hard to hold that against him after being single-handedly responsible for turning my average team into a wealthy team with maxed everything. Feel free to thank him on my behalf by beating up on either of his teams that are in rebuild mode!

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Back around the end of Season 8 I became fairly disenchanted with the way my team was progressing.  Sure I had made it into I.1 (my PPM-life-long dream) the previous season, but was promptly demoted to II.2 after one season, and I knew things had to change.  I had made it to I.1 relying on some very fortunate pulls that I had received from my Sports Academy back around Season 5, but those types of pulls had dried up for me, and those players were starting to enter their "prime value" years, more on that later.  On top of that, my arena was pretty pitiful and due to my finances being stagnant, I could not upgrade it or my woefully inadequate facilities.  I needed to make a change.

The first thing I did was look at what was draining my money.  And the answer was painfully obvious: (my wife, jokes, I, canucks357, had to add that in there) staff.  My staff costs were through the roof, and while they have value, they were crippling my team from taking the next step.  I thought of flip-flopping between II.x leagues and I.1 over the next few seasons and decided that wasn't for me.  If I wanted to compete with the "Mighty Oils" and "Nicol Bolas" of Canada, I needed to try something different.  So I sold any member of my staff making over 100k/day.

"WHAT?"  This is the response I got from my trusted colleague and friend, canucks357.  He thought I was crazy... at first.  Once he started seeing the money rolling in, he became more open to my approach.  Again, more on that later....

I realized that I needed to make more money and gobs of it if I wanted to compete.  Unfortunately I was not having much luck with the sports academy, so playing the market wasn't looking like a good option for me.  On top of that, I didn't have the time to be a market day-trader.  So I realized I needed to focus on a more stable and predictable way to get the money flowing: building up my arena and getting skyboxes.

I began to sell my staff, take out loans, and started straight on to triple-levels with 1000 seats.  I did 1000 seats because a) I couldn't bear waiting to put together 80+ Million, and b) I wanted to get skyboxes as soon as possible (editor’s note: press centers and souvenir shops are worthwhile ventures as well).  It took me a while to get all triple-levels/skyboxes around the arena, but once I did, I went back and started upgrading the seat capacity to 2500.  It took 3 seasons, but I eventually maxed out my seating.

With staff being sold off and my average-at-best facilities, I realized that for the next little while my players would not be able to keep up with the top teams in Canada; it was just a fact.  So I decided to go into rebuild mode.  I started with selling my older, but higher OR players, and used the funds from those sales and my staff sales to invest in my arena to speed up its upgrades.  I built a little program to analyze my players to determine what I call their Equivalent Qualities.  Basically, using the ratio I feel is best (2:1:1, or 2:1:1:1 when it comes to defensemen), I rated my players qualities, and the lowest EQ players I got rid of. 

I also was mindful of players about to drop from 5/6 to 4/6 or 4/6 to 3/6.  I made sure to sell those players as well as the low-EQ players. In some cases, my guess was wrong: they didn't drop, and the team that won the auction got a season or two out of them before they dropped, but in a lot of cases, I was right.  I wanted to take advantage of their "prime value" before they dropped and became less desirable.

As the arena was finishing up, I noticed the money was flowing a lot freely.  This is where canucks357 really took my plan to heart and began implementing his own version of it.  I took this opportunity to start upgrading facilities.  In the past 3 seasons I have gone from all facilities being around level 10-11 to most facilities being level 14-15.  I did this because I'm setting my future team up for success.  I want the best facilities in place for any young and high-EQ players.  I specifically focused on the maintenance centre, as it drives down the costs of facilities, HR centre to maximize money coming in from sponsorships, training centre and regen centre, those last 2 for obvious reasons.  At more than 3 separate instances I had all facilities being upgraded at the same time.

It was around this point that another manager, pat2e, came up with a handy spreadsheet to have the most efficient arena custodians (editor’s note: this is what was used to determine the numbers in the previous article on staff).  He calculated arena/facility costs, staff member costs, and the bonuses of having certain facilities/staff member attributes. This allowed a way to optimize your expenses via improving your maintenance centre and having your custodians train to certain attributes.  Training your custodians to 100/100 is NOT the most efficient way to save money (again, see previous article), as their salaries will be enormous.  His spreadsheet allowed me to figure out the best attributes for those staff members to have to save you the most money based on your current arena/facilities and their salaries; this saved me TONS of money.

Around this time I decided that it shouldn't be all work and no fun, so I decided to be very selective in buying players off the market.  I came up with some very selective search filters, and made a fair number of purchases of young, but high-EQ players.  I even created a spreadsheet that I use to cut/paste the player page from the market, and it will tell me, based on my specified ratio, what their EQ is.  I made a lot of smart buys on the market, and built up my young players as a result.

As well, I started to look again at building my staff back up.  I'd already made investments in custodians to maximize the discounts on my arena/facilities expenses, but I wanted to get back into a position where my players would be trained optimally.  I found a few young 100/100 coaches, and physios, and bought them.  I've even considered doing the same with the sporting directors to maximize my training camp efficiency.  They're not back to where they were before but they're getting there.

Flash forward to now:  I have a fully maxed out arena, I'm running out of facilities to upgrade and my younger players are ready to take over for some vets.  I've raised 850M in revenue just from this season, and spent 300M of that on facilities.  Once I run out of facilities to upgrade and my expenses stabilize, all the income I was previously using on arena/facilities will be able to be used for investing in players/staff on the market.  I really feel excited for the next few seasons as I think the Saints can really take off as a result of the 5-season rebuild journey I've been on.

The future looks bright for Stoney Creek Saints.  I.1, watch out.  I'm coming for you.

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Thank you all for reading. I hope this may inspire some of you to think long-term and take a similar path. It is a long journey, but it is a fun one. It’s been a pleasure sharing it with you.

Until next time,
-Scott and know-it-all Sean