1. Fixed costs:
Player salaries are typically the greatest expense for a professional
sports franchise. Each team is endowed with 10 million dollars at the
beginning of the season. Students use their revenue and cost
projections to budget for player salaries. The commissioner will enter each
franchise's total payroll for the season. Players receive their paycheck the
end of each game which split the amount over the 10-period regular season
and enter the amount into each franchise's financial statement. Each owner
should realize that throughout the season, as franchises trade players, a
franchise's payroll may change.
2. Variable costs:
Administration is an expense that every franchise must pay to manage a
front office. It is a fixed amount, and each team will pay the same
administrative expense for the fantasy season. This is a fixed $500,000
per week per franchise.
expenses (vendors, concessions, and parking) is a fixed amount, and
each team pays the same game day expenses for each home game during the
season. This is a fixed $500,000 for each franchise when they are a home
- Travel expenses
is a fixed amount that a franchise pays to travel for an away game. Each
team will pay the same travel expense for each away game during the
season. This is a fixed $300,000 for each franchise when they are a
and Deals Costs should not be budgeted for, but it may be a cost for a
franchise during the season. All franchises will have opportunity to trade
players and include cash as a component of the deal.
- League Fines
- The commissioner can fine any franchise any time for any reason.
- Interest Expense
- A team that is losing money will have to pay the Commissioner's Bank and
Trust 0.4% of the losses (losses * 0.004) in the next period. A line on
the financial statement will be included that calculates this expense if
the franchise's total profits were negative in the previous period.