Number Crunching the RevSaint's prophecy

By far the most interesting thread on the official forums over the Easter weekend has been this one started by RevSaint.

In essence the "deal" of the new income system (with a greater focus on official competition performance) is as follows: the top teams *can* earn a lot more than the bottom sides, BUT
1 - they will have higher wages to go with this, so will have to live on the edge financially
2 - there will be fairly steep drops in prize money at the top end, so a bad season will see your team earn a lot less the next year, and given point 1 this may lead to you having to sell players and dropping back down the rankings
3 - gameworlds will be low inflation environments so the teams who do well early will not see their assets increase in value so fast that 1 & 2 are irrelevant.

Some of RevSaint's critics seem to think he doesn't like this "deal" but my impression from his posts are that he does, but he thinks the way the start of a gameworld is now structured is not going to allow the deal to function properly. In particular, the teams who do well in the first season will get so much more prize money than the others that they'll quickly be out of sight. Let's look at some numbers on each of these three points to see if he's right...

1 - Higher Wages
It's hard to say whether this will be true, because some of the best players are yet to be unlocked, and we haven't had the first round of contract renewals yet. From looking at the wage auctions from the players who have been unlocked in Voller so far, it seems the average wage paid out is around twice their base wage demand. But I really don't want to stress too much on this because it's simply too soon to say - the other two points will be much better indicators...

2 - A danger of falling backwards quickly
This really isn't going to happen much in the qualifying seasons. Winning a season 1 qualifying league = £2.2m. Even if you come last in the season 2 qualifying league I believe you're in for about £1.8m. So 90%+ of the top teams will receive more in prize money during season 3 (from their season 2 performance) than they do during season 2 (from their season 1 performance). And given that any newly unlocked player signing in season 2 is likely to have fixed (one-off) costs of 400k (AQ fee plus signing on fee), this means that provided that your projection with the new signing's wages included looks fine in season 2 it will also be fine in season 3, regardless of how badly your team does. So you can afford to push the boat out in season 2 with no risk at all. And if you do push the boat out you'll be able to price the weaker teams out of the wage auctions.

3 - A low inflation environment
Ok this is where we get really mathematical. Inflation of player prices will occur if more money flows in to the GW (through prize money, stadium income etc) than flows out of it (through wages, stadium investment, academy investment, AQ fee signings on free agents etc).

Incoming: In the first season the 1000 teams in a GW each receive 400k in prize money, so there is total of about £400m flowing in. However, each of the season 1 qualifying leagues has a total of £2.75m prize money per 20 teams. So 50 of these leagues for 1000 teams means that prize money flowing in next season will be £1.375bn (£1375m), an increase of £975m over season 1. In addition there will be small rises in stadium and general income to go with the rises in team rep, although I estimate these will be fairly small increases from looking at the miniscule increase in stadium income that comes from being a Level 5 rep team as opposed to Level 1. For the sake of round numbers let's say this increase will be £25m, bringing us to a total of £1bn (£1000m) extra flowing in to the season 2 economy. So unless an equivalent amount then flows out of the economy we're going to see inflation.

Outgoing: A big source of outgoing money will be the players who are unlocked in Season 2 - AF's, signing fees and wages will all flow out of the GW economy. So I took a look at the players due to be unlocked in Voller during Season 2. Their combined acquisition fees come to £96.7m (leaving transfer neg skills to one side for a minute since I don't know how many people hold them). If every player goes for their contract wage demand this will be a further £122.8m flowing out of the economy in signing on fees and wages. This brings us to a total of just £219.5m. In a more realistic scenario where these unlocked players go for twice their wage demand, we're still only looking at around £350m flowing out. So where does the other £650m outgoing come from? Increased wages? Yes, a little, but given that teams have such low reps in season 1 player rep isn't going to rise that fast so I'm guessing wage rise demands will be modest. Stadium expenditure? Yes, a little, but given that with Rep 5 you only need a few hundred more seats than with Rep 1 I can't see many teams spending big here. Youth Academies? Yes, a little, but there are already *loads* of YA's in Voller so many will not see it as a good investment, and in any case many teams don't have the ability to build more than one. Unless wage increases are much bigger than I have anticipated, I just can't see where we're going to get to the £1bn of outflows from.

And if we don't, particularly if we miss by a long way - the scourge of inflation will haunt the new gameworlds in the way it did the old. I have no issue with the teams that do well in season 1 being in pole position to sign the top newly unlocked players in season 2 (heck I hope to be one of those sides myself!), but if those players' values immediately skyrocket those teams' assets are going to increase by far more than the £1.2m differential in season 1 prize money between the best and worst sides. Hopefully this won't be forever; when the full tiers begin and the top rep teams start to see massive wages, they should be pulled back a little. But by then they top teams will be well ahead, and probably sitting on good size cash reserves. So I think we're talking about at least five seasons down the road. Will other managers stick around that long to wait? History suggests they won't.

He may be called RevSaint, but his prophecy of doom may yet be spot on...