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April 21, 2014

Fantasy Freestyle

Why 70/30?

by Mike Gianella

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This winter, there was a great discussion on Twitter with Peter Kreutzer (a.k.a Rotoman) and Chris Liss of Rotowire about why fantasy baseball teams in auction formats spend about 70 percent of their money on hitting and 30 percent on pitching (more or less). We are beyond auction season now, but this is such a terrific debate (and such an important concept to auction owners) that it is worth revisiting now.

Kreutzer is correct that we spend more for hitters in the aggregate than we do for pitchers because there is always more value to be had in the free agent pitching pool than there is in the free agent hitting pool. A simpler way of putting this is that in a 12-team format you’re far more likely to buy a pitcher who will not be as good as one of the actual top 108 pitchers as you are to buy a hitter who will not be as good as one of the actual top 168 hitters. I don’t agree with Kreutzer’s assumptions on the valuations, but that’s not especially germane to this particular discussion. He’s right where it counts, and this is why most experts use something along the lines of 65/35, 70/30, or something in between for dollar allocation.

However, while this observation about hitting and pitching free agents is correct, it isn’t the primary reason why it is important that you should try to stay close to a 70/30 split on hitting and pitching prices. If you fail to spend 70 percent of your money on hitting and 30 percent on pitching, you will hamper your ability to field a competitive team.

For example, let’s say that you decide that paying for pitching is stupid. You decide to go into your auction using an 85/15 split for hitters and pitchers instead of a 70/30 breakdown. Using 2013’s expert league prices as an example, here is what this dollar allocation would have done to the Top 10 AL hitters.

Table 1: Ten Most Expensive 2013 AL Hitters: 70% Versus 85%

Player

My Bid

AVG Salary

85% Hitter Budget Bid

Mike Trout

43

41

49

Miguel Cabrera

38

41

49

Robinson Cano

33

35

43

Albert Pujols

33

34

41

Prince Fielder

32

34

41

Jose Reyes

31

31

38

Jose Bautista

30

31

38

Yoenis Cespedes

29

30

36

Adrian Beltre

31

29

36

Evan Longoria

28

29

36

The average salary is generated from the salaries of three expert leagues: CBS, LABR, and Tout Wars. These leagues have been spending in the neighborhood of 70 percent for hitting and 30 percent for pitching league-wide for the last few years. My recommended bids—published at Baseball Prospectus for the last two years—use a 70/30 framework as well. As a result, my prices for these players are generally in the ballpark of the expert leagues. If I had been a participant in all three expert leagues, there’s a possibility I would have bought Trout in at least one of them and depending on where his price fell, I might have purchased Beltre. The other hitters I would have passed on. Reyes’s average salary matched my suggested bid, but I’m not in the business of buying players at a par price.

Now look at what happens when you push 15 percent of your money toward hitting (the 85 pecent hitting budget listed above). Suddenly every price for the top hitters is a good price. In theory you should be buying all of the top hitters until you run out of money. In this scenario, let’s say that you bought Trout, Cabrera, Cano, Pujols, Reyes, and Fielder at one dollar more than their average, expert league bid price. This would cost $222 for six players. At this point, you could either try to fill in across the board with cheap players or spend $22 on one more player and go dollar derby on your remaining 16 roster slots. In a best-case scenario, you would clean up on offense and your pitching would struggle. Worst case, one or two hitter injuries would put your team in the basement.

You could argue that since you know that your league is going to only allocate 70 percent per team on offense that you can simply scale back on your prices from the 85 percent for hitters when you are at the auction. However, all you’re doing at this point is engaging in a semantic exercise about what the “right” split is versus how to spend your auction dollars.

It is stating the obvious, but if you turn the dial up on pitching spending, the same principles would apply.

Table 2: Ten Most Expensive 2013 AL Hitters: 45% Versus 30%

Player

My Bid

AVG Salary

45% Bid

Justin Verlander

33

32

38

David Price

28

28

32

Felix Hernandez

28

25

32

Jered Weaver

24

25

28

Yu Darvish

28

25

32

Max Scherzer

23

23

26

CC Sabathia

24

22

28

Chris Sale

18

21

21

Matt Moore

17

19

20

James Shields

20

19

23

Because you are starting with a smaller percentage of the “pie” allocated toward pitching, adding 15 percent of your overall dollars to the pitching budget doesn’t quite have the same dramatic impact as it does on the hitters. But it does have an impact. In a hypothetical bidding war with all of these teams, I would “buy” all of these players except Sale. The same problem would occur for me on the pitching side, where I’d spend $227 on my top nine arms. I might win all of the non-saves pitching categories, but there isn’t enough variability in the world on offense for me to win any hitting categories while spending $33 on my offense. Maybe I would sneak a few points in steals if I got lucky.

The 70/30 split exists not because the dollar allocation is correct or accurate then, but because you are trying to build a team based on market values. You can go over or under budget on the whole for hitters or pitchers by a few percentage points, but once you start moving your split five percent or more in one direction or the other, you run the risk of buying an imbalanced team.

Right now, in mid-April after we have purchased our teams, none of this matters. Hitters and pitchers each contribute half of points in roto-style leagues, and the value proposition changes the moment your auction concludes. This is why it isn’t uncommon to see a $25 hitter flipped for a $20 pitcher; once the season starts, we recognize that the 70/30 valuation of the auction is theoretical and wrong in terms of the realities of the season.

However, if your budget is too far off, your team will be unbalanced and you will have a difficult time correcting, especially in an only league. In a mixed league, you might be able to adjust through free agency, particularly in the example where you spend 85% on hitting. In the end, though, the 70/30 split might be derived from the number of free agents who are as good or better than the players we actually buy, but for me as a pricer this is a moot point. I’m interested in budgeting for my auctions based on the market conditions; the “whys” of those conditions does not particularly concern me.

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:  Fantasy,  Auctions,  70/30

31 comments have been left for this article. (Click to hide comments)

BP Comment Quick Links

BERSMR

Essentially, the argument here is that I should follow the 70-30 split because everyone else does, or at least close enough to everyone else to effectively set market prices.

Apr 21, 2014 04:38 AM
rating: 4
 
kvamlnk

I think it is worth pointing out that the underlying roster rules give 39% of the roster to pitchers. If your budget was simply based on the roster proportions, it would be 61:39. The volitility of pitchers forces a reduction down from 39%.

Apr 21, 2014 05:57 AM
rating: 1
 
timjrohr

That's not all; in an old-school 4x4, 3/4 of the hitting categories are quantitative (BA is qualitative), while 2/4 of the pitching categories are quantitative (ERA and WHIP are qualitative). That also pushes more money to hitting, since a player can hurt you in qualitatives, making them zero-sum categories.

In 5x5, it's slightly more comparable; 4/5 of hitting and 3/5 of pitching are quantitative. In my 6x6 (OPS and QS), they're equal (both 4/6), and middle relievers are virtually worthless.

Apr 21, 2014 11:22 AM
rating: 0
 
jfranco77

Because if you spend 50-60 percent of your money on offense, your offense will be terrible, and because pitching is so volatile, yours probably won't be any better than someone who spent 30% of their budget on it. Is that about right?

Apr 21, 2014 06:41 AM
rating: 0
 
cliss13

Mike - I agree with your premise, but disagree with your conclusion. Let's say instead of going 85/15, you simply had access to the end-of-season 2014 stats. You would value hitters and pitchers perfectly and your values would differ substantially from the market's which lack your perfect foresight. In that case, you wouldn't simply buy the first six bargains out of the chute - you'd wait for the biggest possible bargains. Why would you do any differently with your 85/15 or 60/40 split? You can know that your values are different, still make concessions to market value, and yet still be very choosy where you take your perceived profits.

Apr 21, 2014 06:53 AM
rating: 2
 
BP staff member Mike Gianella
BP staff

I'm not sure what my conclusion has to do with a retrospective auction.

Apr 21, 2014 07:07 AM
 
cliss13

not saying we're all doing a retrospective auction. Saying if you somehow had the end-of-year values. You might very well end up going 85/15 in that case if you knew where all the $1 future closers and unlikely aces were.

Apr 21, 2014 07:19 AM
rating: 1
 
cliss13

Moreover, having a different split than the market doesn't suddenly destroy your powers to budget a 23-man roster, so even if the first six players out of the chute were the biggest bargains individually, you wouldn't buy all six knowing you'd have to fill out an entire roster, whose collective value would be higher by not going with six high-priced guys.

Apr 21, 2014 07:00 AM
rating: 0
 
BP staff member Mike Gianella
BP staff

Right, but then you're simply adjusting your prices based on the realities of the market, which was one of my points above.

Apr 21, 2014 07:08 AM
 
TroJim

Excellent article. If one accepts the premise that it is necessary to compete successfully in almost all of the Roto categories to win a league, then one can not escape the fact that one must bid competitively in almost all of the Roto categories AT MARKET PRICE.

If one values production differently than the market, then one will almost certainly purchase excessive production in some categories and deficient production in others. If one overvalues some categories (compared to the market), one will purchase excessive production (more production than is necessary to win a category) and waste money. If one undervalues some categories (compared to the market), one will have a very difficult time purchasing enough production in those categories to win the league.

Apr 21, 2014 07:11 AM
rating: 0
 
cliss13

Adjusting based on market realities doesn't make your different split a "semantic" one. You're still going to value players very differently, but of course, you're going to try and maximize profits and never pay $1 more than you have to. Your team might end up pitching-heavy, but if you got $320 worth of perceived value, that's not a problem in a league that allows trading. Balance is a virtue, all things being equal, but if the values are unequal, you'd trade some balance for it, and perhaps a lot of balance for enough of it in a trading league.

Apr 21, 2014 07:17 AM
rating: 1
 
BP staff member Mike Gianella
BP staff

I almost never buy a "balanced" team for the reasons you're stating, but there is a limit from a budgeting perspective in both directions. If your prices tell you to spend $220 on pitching and $40 on offense, all the trading in the world isn't likely to help you. There is a logical, rational limit to how far you can diverge from the crowd.

Apr 21, 2014 07:25 AM
 
DDriesen

The reallocation of draft money from pitching to hitting does not necessarily mean having to overpay for all your top hitters. You can reallocate simply by foregoing a number one pitcher in favor of adding a second round-type hitter. Sometimes it just works out that way organically if you think the bargains are falling on one side of the hitting/pitching ledger or the other.

Apr 21, 2014 07:24 AM
rating: 0
 
BP staff member Mike Gianella
BP staff

Right, but again at this point you're making a manual adjustment that puts you in a position where you're ultimately allocating your money similarly to the market.

Apr 21, 2014 07:26 AM
 
BP staff member Mike Gianella
BP staff

Another way of putting this is let's say you decided in February that Clayton Kershaw HAD to be on your team. You put a $50 price tag on him, up from $35. For a $15 change, it's irrelevant whether or not you take that $15 from hitters or pitchers in the aggregate. If you decide to go 55/45 with your entire team, though, you can't simply add all of that money to the pitching pool on the whole. It's not workable.

Apr 21, 2014 07:28 AM
 
Robotey

Mike, I still think your premise is faulty because it's based on bidding against yourself. If I commit to 85% hitting, let's say I commit to topping everyone's bids on the top 7 hitters, just as we see in your chart. But why would I need to pay $49 for Trout when the market was $42? I would pay $43. Or maybe $44, or $45 if someone bid me up, but I would still have plenty of my 85% remaining to fulfill. Instead of marginal improvements by overpaying 20% on the best 7 players, I would pay something more like a 5 or 7 % premium. WIth that 'savings' I'd likely grab myself one more premium hitter later in the draft. While bidding against other owners who could only bid so high because they needed to stash even a modicum of $ for a decent SP, I'd be outbidding them once more, knowing I can't spend more than $39 on pitchers.

In the end, of course, it all comes down to how lucky I can get with my cheap pitching and the trades I can make once my offensive numbers jump me out to a big lead.

Apr 22, 2014 14:22 PM
rating: 1
 
BP staff member Mike Gianella
BP staff

The example I gave above assumed a +1 based on market price, not based on my 85% bid valuations.

What everyone is commenting on here is a variation on the theme I mentioned in the piece. Yes, you can say "I'm budgeting 85% for my hitters" but if you don't manually adjust to the market's 70% reality you're going to spend 90-95% of your budget on hitting. There is a chance you can win that way because of the inherent volatility in pitching, but 5x5 makes it more difficult because you have to grab those strikeouts, and there is some predictability in pitching, even though it is less predictable than hitting.

Apr 22, 2014 14:37 PM
 
TroJim

You can prepare a value list with one of two goals in mind:

A. What you think a player is really worth.
B. What you think a player will cost.

You may believe in A, but you can't ignor B.

Lets say you believe in an 85/15 valuation, but market adjustments cause you to buy a team at auction that is 75/25. And you end up buying all of your hitters for less than their 85% price and most of your pitchers for more than their 15% price. Then you have to ask yourself...would it have been easier to prepare a 75/25 valuation, or to stick with the 85/15 valuation knowing that you'd need to make adjustments. I don't think there is a right or wrong answer here, but obviously someone like Mike should publish valuations that do not require his readers to make more adjustments than are necessary.

Apr 21, 2014 08:01 AM
rating: 1
 
TroJim

I should have added option C...which is how much you are willing to pay for a player (before unanticipated in-draft adjustments). This is not the same number as A. There is no reason for you to pay an 85/15 price for hitter if you anticipate that most hitters will be sold at 70/30 pricing.

Apr 21, 2014 08:09 AM
rating: 1
 
opp1212

If I decide to spend 85% on hitting, I'm not going to up my player valuations...

Apr 21, 2014 12:37 PM
rating: 4
 
JohnChoiniere

I've found that using projected stats (from PECOTA or something else), calculating a points-above-replacement/SGP-type metric, and allocating marginal roster dollars to above replacement-level players without any prior bias towards budget ratios, a roughly 70:30 split actually naturally occurs.

Apr 21, 2014 17:14 PM
rating: 0
 
BP staff member Mike Gianella
BP staff

Well, that's because PECOTA and the other systems are using a 70/30 split more or less.

Apr 22, 2014 14:33 PM
 
Flatfoot

I think we should stop confusing valuation with spending.

When we prepare our pre-auction spreadsheets, we devalue pitchers despite knowing that they'll ultimately score exactly 50% of the points (in a standard 5x5 roto league). The reasons have all been mentioned before: injury risk, availability of replacements, etc.

This is not the same as budgeting for an auction. Many of us don't believe in budgets and take what the auction gives us. If I've already set my values (i.e. with a 70/30 split) why shouldn't I load up on pitchers if they're coming cheap and everyone is "overpaying" for hitters?

Apr 22, 2014 05:27 AM
rating: 1
 
BP staff member Mike Gianella
BP staff

We use the 70/30 valuation to measure retrospective value because it is a closed market. We could use 50/50, but it's not particularly instructive to do so.

I do the same thing (take what the auction gives). I just make sure to use a 70/30 baseline (more or less) so I don't cash out on the first 6 pitchers and spend $150-170 on my staff.

Apr 22, 2014 14:33 PM
 
acend1

So I'm a newbie so maybe the answer is obvious and I'm not understanding it...but why does the valuation change after the auction? Pitching replacement levels don't change nor does the volitility of pitching relative to hitting. I don't understand why you would flip a $20 pitcher for a $20 hitter after the auction?

Apr 22, 2014 08:18 AM
rating: 0
 
Ameer

Because in the auction it's all about value, and in the season it's all about roto points. The 70/30 split seems to be what happens in the "market," and so you will probably feel you're getting the $25 hitter at value and the $20 pitcher at value. In season, roto points are a 50-50 split. So a $20 pitcher probably contributes to your pitching points the same "roto value" that a $25 hitter does. And it works out if you think about it. In-season, something like a Cliff Lee for Joey Votto trade probably sounds fair to you, no? And you're right, because Lee has a similar effect on your roto points that Votto does. And I bet in most auctions, Cliff Lee went for right around $30 and Joey Votto went for right around $37-$40.

Apr 22, 2014 13:07 PM
rating: 0
 
acend1

Still doesn't make sense to me. Shouldn't the auction be about roto points as well? I mean that's the end goal of all of it right, to end up with the most points? So if pitchers and hitters contribute equally to roto points, why not distribute the money evenly? Any weighting towards hitters would be a market inefficiency that the savvy owner would take advantage of, no? I don't think that is the right strategy mind you. I agree with the 70/30 split, I just think that owners should continue to value hitters over pitchers for all of the reasons mentioned in the artice, even after the draft, as the season goes on. So, no a Votto for Lee trade doesn't sound fair to me for all of the reasons listed that you value hitters more than pitchers in the draft. Again, I'm a total newb but I still haven't had it explained to me why that's not the case.

Apr 23, 2014 04:30 AM
rating: 0
 
ravenight

I don't get the premise here. You are saying that if I value the top 6 hitters more than other folks, then I will end up buying all 6 and spending all my money. But that could happen even with your bid limits - if no one was willing to go up to $1 less than your limits on those same 6 guys, would you end up buying all of them? Would you end up with Verlander, Felix, Darvish, and Sabathia given your limits vs. the avg salary?

The 70/30 split can be the default market position because it's the default market position, but that doesn't mean that it's the best way to spend your money. If you think the league undervalues pitching as a whole, and the split should really be 55/45, then you can go ahead and draft Verlander, Price, and 2 of Felix / Weaver / Darvish at +1 vs. the average salary, and spend $1 each on some guys to fill out your budget at around $117, or you can stop at Verlander and Price, then look for some mid-range guys later since your budget is depleted and you don't want to rely on $1 guys.

tl;dr If everyone looks like a bargain, you still have to fit them into your budget constraints. That's not a semantic difference vs. the market's split, unless you assume that the market's valuation is the correct one.

Apr 23, 2014 12:08 PM
rating: 1
 
BP staff member Mike Gianella
BP staff

It could happen but it is far less likely. Also, I'm not in the business of going to par on my 70/30 bid limits so if I get six hitters at $2 under par apiece I'm not going to spend as much as I would if I simply jumped to 85/15 and spent like a drunken sailor.

If you spend $100+ on pitching, you will generally have a hard time winning. It's not impossible, but you need to pretty much nail it on the offensive side.

Apr 23, 2014 12:23 PM
 
ravenight

I'm not saying you're wrong about that - I both agree with you and would trust your valuation over mine. I'm just saying that the reason that's true is because the market's valuation is accurate, not because straying from market's valuation would be bad regardless of how accurate it was.

If the roto value produced by the best pitchers on draft day was actually $110/team, then that would mean that the value produced by the best hitters on draft day would be $150, and thus you would be able to get a competitive piece of the pie if you were able to spend $150 on hitters, either because you made up the difference with pickups or because the value delivered by the top hitters was less than folks paid for them.

The point does still stand, though, that you can't use your split to assign values to the players - you have to estimate their market value, then decide how you want to split your budget. So you can't just drop the bid limits on every hitter by 15% and up it on each pitcher by 15% and then settle in to look for bargains from there - you have to have a better way to control your spending or you will pass on so many hitters that you can't spend all your money or you end up with a split that is out of whack with your target.

I think it would be interesting to see what strategies different folks apply to make sure they stay on-budget. What do you do if your league's valuations are weird / different from yours? How do you make sure that you don't blow your whole budget early or wait too long and miss out? In my keeper league, I put together groups of players at around the same value that I was targeting because I thought the league would undervalue them, then set limits for myself on how many players from each group I wanted to draft.

Apr 23, 2014 13:30 PM
rating: 0
 
Robotey

Is the simple answer to this entire piece: Aaron Harang?

Apr 23, 2014 23:15 PM
rating: 0
 
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