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August 12, 2013
If you play in a keeper league, you’re always thinking about next year. If you’re contending now, next year isn’t first and foremost on your mind, but you’re definitely looking at your team and all of the option-year players you’re going to lose to free agency. If you are not contending, you definitely have an eye on next year. It’s not where you wanted to be in April, but the only thing worse than dumping is dumping and failing to plan for the future.
Recently, I talked about inflation in the context of playing for next year. When trading for players, you want to make sure you’re not only looking at their raw value, but their value in the context of your freezes as well. How do you do this? The raw math is quite simple. The inflation rate simply is:
$ Left to Spend / $ Value of Players Available
For example, in a league with 12 teams and a $260 salary cap, there is $3,120 in total salary. Frozen players totaling $1,120 in salary are worth an estimated $1,520. This leaves $2,000 to spend on $1,600 left of talent.
$2,000 Left to Spend / $1,600 Value of Players Available = 25% inflation rate
That’s the simple, in-a-nutshell explanation. However, in certain cases, simply taking a raw dollar amount and applying it to a player’s value can be folly. Below are some examples of adjustments you might want to make depending on your league.
1. Separate hitting and pitching inflation
However, in some years there may be a lot of undervalued talent among the pitchers and not the hitters. While this can also happen in the opposite direction, it is the lack of predictability of pitchers that makes this phenomenon far more common. You are more likely to have one of your $3-5 sleeper pitching picks turn into a staff ace than to have one of your $3-5 hitting picks turn into Mike Trout.
Here is an example of how this separate inflation might look, and why you might consider calculating it separately:
League A has $700 frozen on hitters worth $1000 and $420 frozen on pitchers worth $520. If League A spends $175 per team on hitters and $85 per team on pitchers, it will spend $1400 on hitting worth $1100. The inflation rate for hitting equals 27.3%. League A will therefore spend $600 on pitchers worth $500. The pitching inflation equals 20%.
League B has the same $700 frozen for hitters, but their pool of frozen hitters is only worth $925. Therefore, their $420 of frozen pitchers is worth $595. So League B will spend $1400 on hitting in the auction worth $1175, for a 19.1% inflation rate on hitters. It will also spend $600 on pitchers worth $425, for a whopping 41.2% inflation rate on pitchers.
In plainer English, the reason the pitching inflation rate is so high in League B is because more quality pitchers are frozen while fewer quality pitchers are available. As I noted above, leagues tend to adhere to league spending patterns on hitting/pitching. However, while this is true, there is generally a stopping point. Assuming your raw bid value on Clayton Kershaw is $32, in League A his inflation value would be $38. In League B, his inflation value would be $45. While Kershaw might theoretically be a $45 player in League B, the league might stop somewhere between $40-42 because sinking 53% of a typical team’s pitching budget into one pitcher is too much for most owners.
Because leagues do tend to spend similar amounts on hitting and pitching year to year, though, this is an adjustment I’d recommend making in extreme cases like League B. If you simply apply a raw 25% inflation value to both hitters and pitchers in League B, there is a good chance you’ll load up on hitters early, miss out on a significant numbers of pitchers, and end of with an imbalanced team.
2. Redistribution of Wealth Theory No. 1: Don’t Overpay the Stars
You might be okay spending $54 on Cabrera depending on your circumstances. If you have a strong keeper list with loads of value and all you need is a big power hitter to push you over the top, Cabrera at $54 might make perfect sense at that price. But there are a few factors to keep in mind:
Another reason to avoid going to the max on Cabrera is that higher inflation increases variability in the middle of the auction. In a league with modest inflation, my $2 difference of opinion on raw value on a player doesn’t change much. In a league with higher inflation, your higher value on a player pushes his inflated value up quite a bit more. You are far more likely to get players in the middle of the auction that are bargains – at least by your lights – in an auction with higher inflation.
3. Redistribution of Wealth Theory No. 2: Don’t Overpay the Schlubs
If you simply stick a $3 price tag on all of these guys, you’re going to miss out on players at the top and the middle are aren’t “bargains” but who will provide more value than the players at the bottom. Your goal isn’t to push the players in the middle or at the top to a ridiculous price but rather to add a dollar to the price of 20-30 players at the top or the middle of the food chain. This can be a good opportunity to add a little money to a player who fills a specific need. If you’re short on steals, pushing an extra dollar toward Michael Bourn might not be a bad idea.
4. Position or Categorical Scarcity
Notice I don’t recommend a “pay whatever it takes to get Nathan” option. At some point, you will need to make a rational decision based on what it will take for your team to win. There is a price point where dumping saves makes more sense than paying an astronomical amount for them; you have to figure out your team’s strength based on categories as well as inflation to make this decision an informed one.
So, How Do I Calculate Inflation?
I always start by calculating hitting and pitching inflation separately. This gives me a good idea of whether or not I will encounter any extreme or unusual spending conditions in my auction. I won’t necessarily use separate hitting/pitching inflation, but I want to know if there is an extreme tilt in one direction or the other in terms of hitters/pitchers available.
Next, I apply the inflation to the perceived value/talent for each team. My approach to the auction is going to different in a league with no strong favorite versus in a league where one team has a super strong freeze list. It is as important to adjust your values for the strength of the competition as it is to adjust your values for the talent available in your auction.
Once I have completed all of this, only then will I adjust inflation on a player-by-player based on my league’s specific conditions. I like to limit my manual adjustments as much as possible. Every dollar I stray from a player’s true inflation value is either a loss or a missed opportunity at a potential bargain. As I outlined above, categorical needs should outweigh dogmatic concerns about bargains and value, but overpaying too often is just as sure a path to the second division as missing out on your category targets.