A Fire Sale But Not A Liquidation

For those of us in keeper leagues, it’s the season of the fire sale. Owners without any hope of reaching first place are looking for top prospects in return for high priced veterans. Sometimes it pays to be the first team at the bonfire – the best prospects are still available for your talent.

A fire sale implies a discount, just like a liquidation. Owners who settle for pennies on the dollar may be doing themselves a disservice over the long run. Whether it’s due to pride or game theory, I’m convinced the best course of action is to sell at full price or not at all.

Yesterday, I announced a fire sale in the ottoneu league FanGraphs Staff Two. My team is fluttering around sixth place, which isn’t bad if you saw the state of the team when I inherited it. I’ve add a lot of premium talent, including Miguel Cabrera, Joey Votto, David Wright, Chase Utley, Craig Kimbrel, and others. My hope is I can flip some of those big names for cheap studs. While I will be using this ottoneu league for the examples in this article, the concepts apply to most keeper formats.

Given the quality of player on offer, I heard back from several owners immediately. In this particular league a few owners drafted for 2016 (not a typo, their rosters won’t be competitive next year). That helped me acquire good talent, but it also means roughly three quarters of all meaningful prospects are owned by teams that won’t trade them. As such, rather than focus on acquiring prospects, I’m turning my energies toward winning cheap veterans.

Several of my rivals are quite miserly with prospects. If you think about it, a 12 team ottoneu league is rarely going to roster more than 60 prospects. Plenty of high quality names are still on the waiver wire. Why not swap your $5 prospect of today for a high quality veteran and pick up a similar youngster over the offseason?

One negotiation in particular is the reason I’m writing this article. I was offered Archie Bradley for Craig Kimbrel plus a player to be named. The owner allowed that Cabrera, Adam Wainwright, and Votto were probably too good to be the plus. The implication was that I should find a second player on his team to pair with one of my top 20 quality talents.

Given Bradley’s health, performance, and $5 price tag (at least $7 to keep), I countered with a straight Kimbrel for Bradley proposal. After all, Bradley is a good bet to miss a year for ligament replacement surgery. He was struggling with the PCL before the injury, and a few naysayers were turning up. If Bradley flopped, it wouldn’t be the first time a highly touted prospect ran into some injuries and never became anything. The way I saw it, I’d be taking on a ton of risk and trading a top two reliever for the privilege.

For the sake of example, let’s say there’s a 10 percent chance Bradley never does anything in the majors, a 10 percent chance he doesn’t supply any positive numbers, a 50 percent chance he’s somewhere around fantasy replacement level, and a 30 percent chance he’s somewhere between 100 and 500 points above average (obviously weighted towards the 100 side). We know Kimbrel is about 250-300 points above replacement level. It’s easy to get caught up in Bradley’s upside, but there’s so much between where he is today and the major league star he might become.

As expected the counter offer was rejected. My rival was nice enough to supply his reasoning. Of what he considers to be the five contending teams, one has very few players on affordable contracts and another has no prospects of note. That leaves three or four teams buying from the rest of us. If he holds onto Bradley, he might be able to weasel more out of an owner desperate to get anything back for his veterans. Basically, he says the supply of veterans outweighs the supply of low cost talent.

And that my friends is the punchline. A market works because a buyer and a seller agree to a price. Sometimes, market factors disrupt that process. It could be this owner would make the trade if there wasn’t a history of owners begging for future talent. After all, he didn’t poo-poo my valuation, he just said he expects to get a bigger return later in the season. Which leads me to my position. I’ll either trade at (near) full price, or I’ll go ahead and compete out of spite. I could still climb to third place with only a pinch of luck, and most of those expensive veterans will still be keepers.

Our ottoneu league is a points format, but this approach can have more savor in a roto league. As the seller, you’re sometimes in a position to trade away your points in a category to a rival. If they won’t trade at a reasonable price, you can see to it they never get those points from you. I’ve been on the losing end of those negotiations in the past. Trust me, you learn quickly to secure the win.