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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
In most Roto, auction-style leagues, even though team spending on hitting/pitching might be variable, league spending tends to trend along similar lines. Most leagues spend somewhere in the neighborhood of 65-70% on hitting and 30-35% on pitching. In a league where the hitting and pitching freezes are similarly undervalued, you can calculate your inflation across the board for hitters and pitchers without a significant difference.

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
In a league with high inflation, you want to be careful about being dogmatic about spending too much on the top guys. If Miguel Cabrera has a $40 raw value, 20% inflation puts him at $48 while 35% inflation puts him at $54.

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:

  • While Cabrera’s “correct” inflation price is $54, if your raw value of $40 turns out to be accurate, you still might take a $14 loss. Of course, if you buy $54 of players across the board with a raw value of $40, you still might take a $14 loss, but in this case you’re putting all of your risk with one player.
  • There is a logical ceiling on what players can earn. As phenomenal as Mike Trout was in 2012, he “only” earned $47 in AL-only 5×5. Spend $54 on Cabrera, and you are guaranteed a loss. Spread the wealth on cheaper players, and you might have a player you spent $12 on earn $20. This is a virtual impossibility with Cabrera.
  • The full-ticket superstar can do more than just fail to earn inflation value, he can tank completely. In one of my leagues this year, I backed off of Ryan Braun at full inflation price and let him go $6-7 under my inflation bid. Even before Braun’s suspension, he was on his way to a terrible season from a fantasy perspective. If you bought Braun, you would have absorbed a huge loss even if he hadn’t been suspended.
  • In -only leagues, it is much harder to buy a team of scrubs to go with your star and hope to obtain profit. You might do it once or twice, but asking five or six $1 players in AL-only to earn $15-20 to make up for your star’s failures is asking an awful lot, and is extremely unlikely to happen.

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
Another useful idea is not to dogmatically apply inflation to the guys in the middle or at the bottom. For example, in any league with 25% inflation or higher, every $2 player is worth $3 with inflation once you round their values up. In theory this is well and good, but in practice this is irrelevant. If you have 20 players listed on your sheet at $2 with an inflation value of $3, some of those players are going to go for more than $3, but most will go for $1-2. This is because some other owners will have these guys ranked at a dollar while other owners won’t even put a price on these endgame players.

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
This adjustment is harder to quantify, but if you need a closer and Joe Nathan is the only reliable one available in your auction, pushing one dollar toward his value as outlined in no. 3 above isn’t going to do you much good. You are going to have to decide on one of the following courses of action:

  • Do nothing. Leave Nathan’s inflation price where it “belongs”. If you decide on this course of action, you are committing to dumping saves or trading for them after your auction.
  • Push Nathan’s price up a few dollars. Set a limit for how much extra you want to pay, but don’t go crazy. If you get him great, but if you don’t you are in the same position outlined in the previous bullet point
  • Push Nathan’s price up an extreme amount. You either get Nathan or make someone else pay through the nose.

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?
Theory always must give way to practice. How do I calculate inflation in my own leagues?

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.

Thank you for reading

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Thanks for going in depth on this Mike based on my question a few weeks back - I find it a fascinating topic. It is also really the piece that makes auctions so fun because as you point out, in auction adjustments are needed due to the affect that current prices have on everything else that happens.

I've found that historical auction data in comparison to ADP can really help calculate the inflation that league mates will put on specific positions (hitter versus pitcher) as well as specific players (top stars as you mentioned versus value buys). Strategy obviously shifts owner by owner each year, but as you mentioned a league typically will follow pretty close, unless there is a dramatic rule change which owners have to adapt to.

In my experience, I've actually found it most useful to avoid putting exact dollar amounts on each player because it allows easier in auction adjustments. Rather than be handcuffed to my values during the draft, I can see that 4 of the top 5 SPs have gone for inflated values and I make necessary adjustments to get my guy. I can also see there isn't much seperation on shortstops 8-20, so I can pay on SP and buy a bargain shortstop and really not lose much value. Building out those theoretical depth charts or "tiers" before the draft allows me to make trade offs during the option to build a roster I will be comfortable with. That will result in a huge advantage year over year.
Mike this, was "high quality H2O", to borrow an Adam Sandler phrase. Good, thoughtful take on an important topic for fantasy players.
Great article! Your #3 has always given me the most trouble in creating my lists. The temptation is to rank those $1 to $8 players based on my perception of their relative value, but the fact is that the dynamics of the auction of the first 2/3 of the available players always makes the last 1/3 impossible to predict in any meaningful way. I absolutely agree that it's imperative to make a complete price list that balances the bid total with the available money total. But in the $5 or so range, some guys go for $10 and some go for $1, just based on the vagaries of the particular auction.

I'm tempted (after doing these list for a LONG time) to try and change my methodology to move the guys in that price range whom I want to $7 or so (and be happy if I get them for less) and rank the others at $1 or $2, giving the extra money to the guys at the top.

During the auction, I keep track of the ongoing difference between my bid prices and the actual prices. And while I try to adhere to my maximum prices, I understand that if there is a difference between the two, I will adjust my bidding to make sure I'm not missing out on the best players left, and buying $9 players for $20 at the end just to spend all my money.