April 2, 2014
Strategic Agility on Auction Day
By the time this article is up, there will be very few drafts and auctions remaining for the 2014 season. With the successes and failures of this draft and auction season still fresh in our minds, right now is the best time to analyze what went right and what went wrong. It is definitely better than doing so 11 months from now, when we are more likely to be misled by results (positive and negative) as opposed to focusing on process. So let’s dig in.
I have typed a lot of words about draft and auction preparation and strategy this offseason. I am far from being alone on the internet as someone who has done so. Preparation and strategy are great, but they can be made irrelevant if the strategy is not executed on draft or auction day. “Executing strategy” is a nice thing to talk about, but it is something that is not easily done. More importantly, executing your strategy is not always the best way to maximize your auction yield. Wait what? I have been preaching strategy and process all off season and now I say it is not to follow them? What kind on monster am I? I am not saying that strategy is unimportant, but I am saying that depending on the situation, a tweak or change to your strategy mid-auction or mid-draft can maximize your yield.
Your strategy will be based on your analysis and assumptions. Your leaguemates’ strategies will be based on their analysis and assumptions. When you throw all of that into a room or virtual room on auction day, some of those assumptions will be wrong (note that this does not mean that these are bad assumptions; this could be good process and bad results). Regardless of good, bad, right, or wrong, when your assumptions do not hold, it is important to adjust. This is not something that I thought of while pondering auctions late one night; rather, this happened to me in an auction last Saturday. I had a strategy going in, I adjusted early to my team’s advantage, and I failed to adjust toward the end of the auction to my team’s disadvantage. If you partake in auctions, you can certainly learn from my experience.
League background: 11 team, NL-only, 5x5, 15-keeper-max league with high inflation.
Early Auction (The Good): In being able to adjust my strategy, I was able to grab value that my initial strategy would not have captured.
The top players in this auction were the top bats: Andrew McCutchen, Carlos Gonzalez, Ryan Braun, Joey Votto, Troy Tulowitzki, and Justin Upton. I think most would have Upton on the bottom of that tier or in a separate tier, but he was definitely ahead of the next tier of available players, headlined by Mark Trumbo, Matt Kemp, and Aramis Ramirez. Given the high inflation, my calculation had the top tier of hitters going at $45, $43, $40, $38, $38, and $36, as listed above. So what happened? Let us look at the first two players thrown out:
Right off the bat, we see $7 of inflation-adjusted value captured based on my valuations. Neither of these players went to me. My plan was actually to avoid this tier altogether, as I was already going into the auction with a lot of bats and was very light on pitching. As soon as this happened, it became apparent that a lot of the other owners had the same assumption and plan as me: The top guys are going to be going for ridiculous prices, so I will sit back and grab the mid-tier guys because that is where the value will be. The result of us all having the same strategy was that the top guys were going to be the bargains and the mid-tier guys were going to be expensive. By being flexible with my strategy, I was able to detour and optimize this part of my auction. Next name up:
This one went to me. Following suit were Ryan Braun at $37, Joey Votto at $35, and Justin Upton at $35. Consequently, Mark Trumbo went for $32, Matt Kemp went for $28, and Aramis Ramirez went for $24. As you can see, the values came early, and then it got expensive quickly. Troy Tulowitzki could easily play 25 games for me all season, but the risk is certainly worth the potential reward at that price. Given my $6 savings, I was able to throw a little extra money at my next three selections and grab Cole Hamels ($21), Homer Bailey ($24), and Chris Owings ($11).
Late Auction (The Bad): By not adjusting my auction strategy, I left $7 auction dollars and their value on the table.
Part of this was me being overly happy with my first four selections, and part was me being too tied to my valuations, but more than anything, this was me being too position focused. I was looking for the perfect $7-$8 pitcher that never came. As a result, I missed improving my team elsewhere. Instead of going to $8 on Cody Asche or $9 on Cameron Maybin, I kept waiting to grab a pitcher. To make matters worse, I refused to overpay on that pitcher; thus, I ended up with some speculative bottom-barrel pitching, a $2 Eric Chavez, and $7 of unused money. By refusing to deviate from my plan, I cost my team production.
To make sure I do not make the same mistake again, I am going be following the below process in my auctions next year, especially step four.
1. Know your strategy and your assumptions
2. Always be evaluating your assumptions as the auction progresses
3. Adjust your strategy as needed if your assumptions do not hold
4. Just because you made one adjustment does not mean you will not need to make another
As either my physical therapist or a recent fortune cookie advised me: Stay on your toes.