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April 1, 2013

Fantasy Freestyle

The Art of the Long-Term Contract

by Mike Gianella

In non-keeper leagues, owners get to draft/auction players every year. In keeper formats, there is always a delicate balance between rewarding owners for their scouting/drafting acumen versus having a decent pool of talent available in the draft.

While a few keeper leagues are dynasty and do allow you to keep a player forever, in roto-style leagues, there is often some kind of contract mechanism. Typically, you can add $5 to a player’s “salary” for each additional year you want to keep him. Not surprisingly, I often get questions along these lines

Keeper question: I've got Paul Goldschmidt at $10 in my NL-only league, and saw that he earned $26 last year. His contract is up this year, and I can extend him for $5 a year. First base is a little thin in my league this year, so I am hoping to get your thoughts—-do I maximize profit for this year and just keep him at $10, or do some extending?

At the heart of this question is what all rotisserie-style players ask when it's time to dole out long-term contracts: Is it worth sacrificing current auction value in order to keep a player for multiple seasons?

On the surface, it would seem that the obvious answer should be no. Handing out a contract doesn't increase a player's value. Socking an extra $5 or $10 of salary into a good keep is a slight hedge against auction inflation, but simply keeping the player at the cheaper salary is a far better value proposition.

However, dump trades change the landscape in a hurry. A $10-option-year Paul Goldschmidt isn't going to generate any interest from teams that are giving up on 2013, but a $15 L2 (two-year, long-term deal) Goldschmidt definitely will, and a $20 L3 (three-year, long-term deal) Goldschmidt might. Tactically, your decision should rest on how likely it is that a second-division owner in your league would trade you superior value this year for one or two discounted years of Goldschmidt.

The fundamental question you have to ask yourself when giving out a contract is, will giving a player a long-term deal improve my chances of winning via a dump trade? From this standpoint, there are four criteria I always keep in mind:

1) Keep the contract at least $5 below the player's perceived value.

If you think Goldschmidt is a $25 player, it is okay to give him a $20 L3. If you don’t think Goldschmidt is a slam-dunk at $25, you might want to play it safe with the $15 L2. The idea is that when it comes time to trade Goldschmidt, your trade partner should think he's getting a bargain for next year and a guy he's building his 2014 core around. If you think Goldschmidt is only a slight bargain at $20 and just a good keep, $15 is the way to go.

2) Don't give contracts to players that are past their prime or are role players. 

Jordan Pacheco is at $4 in my NL-only. home league. He earned $17 in 2012. It would seem like he's a no-brainer to give a $9 L2 to, right? Wrong. Yes, a $9 L2 Pacheco could be a $5+ bargain in 2012. But if you were out of the running, would you make a strong trade offer for Pacheco in June? I hope not. Pacheco's a solid citizen, and the type of undervalued player who will help you win. But he shouldn't be a part of anyone's core.

3) In AL- or NL-only leagues, don't give out contracts that carry into a player's major-league free agency.

Because of his pre-season injury, you manage to nab a cheap Curtis Granderson at $14. So a $19 L2 seems reasonable, right? Sure... except Granderson's a free agent at the end of 2013. Maybe you'll get two years out of Granderson—but then, maybe you won't. Don't get burned.

4) Be more generous with hitters than with pitchers.

Pitcher earnings are more erratic than hitter earnings so: a) you're more likely to find a pitching bargain simply by getting lucky at the auction and b) last year's Next Big Thing can often turn into this year's Next Big Bust. This doesn't mean that you should never dole out pitcher contracts, but you should be even more careful than you would be with hitters.

Getting back to Goldschmidt, he is an obvious $15 L2 candidate to me. He's eminently worth targeting at that price in a dump league and would give his new owner a severely undervalued corner infielder to build around. I could see giving him a $20 L3, though in my gut, I'm on the fence about that price and, when in doubt on a contract, I take the more conservative approach.

Mike Gianella is an author of Baseball Prospectus. 
Click here to see Mike's other articles. You can contact Mike by clicking here

Related Content:  Jordan Pacheco

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The Call-Up: Jackie Br... (04/01)
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Fantasy Freestyle: Leg... (04/01)
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