Arbitration is Here, Choose Wisely

The Ottoneu respite is almost over! Arbitration starts tomorrow! While I’m sure most of us needed no vacation, someone who plays in 10 leagues probably needed a break. Anyways, the action is about to continue. Arbitration is one of my favorite times of the Ottoneu calendar but, for anyone who has not experience it before, can seem daunting. Today I wanted to run down my thoughts on arbitration as a whole. There have been several arbitration primers here on Rotographs in the past. Chad and Brad have each touched on it a couple of times and have talked about the tactics they like to employ in arbitration, but seeing as I’m not Chad or Brad, my tactics may be slightly different.

First lets start with the basics. Each of the 12 teams in your league will get $25 dollars to allocate to the other 11 teams. Each team may allocate a max of $3 and a minimum of $1 to the other teams. Allocations are blind (you can’t directly see who is allocating to you). Last year, nearly 450 players were allocated to in arbitration. That’s a lot. Certainly the heavy hitters were your big names going into 2016 offseason the offseason Correa, Bryan, Arrieta, etc. but there are always lesser known guys who get a dollar or two. On top of this, post arbitration leagues typically have between 120 and 140 surplus assets. With this in mind, lets talk through two schools of thought that I see applying to the vast majority of teams as they enter arbitration. I will be applying both of these over the next week.

Allocate to the best teams’ best assets

I’ll be pulling examples from one of my leagues. I find it’s easier to see how these types of tactics translate when you have a specific example to look at. Courtesy of the Surplus calculator Justin Vibber has put together, we can see an example of early 2017 values populated with Steamer600. With these values we can get a totals for each team to get an early look at the 2017 front-runners. These values are extremely preliminary, but they should help to serve as a guide.

arb3

From this we can get an idea of which are best set up for 2017. In this league, the 4 apparent contenders are High & Inside, London Silly Nannies, Raleigh Capitals, and Siamese Dream. I wouldn’t put a ton of stock in magnitude of differences within $20 dollars or so (like I said, these values are very preliminary). To me, all of these teams look to be set up fairly equally based on these early season values.

When targeting the teams to place my allocations on, this top tier is likely going to get the maximum $3 allocation each. Certainly allocations from the league could change this, but as a team planning to be competitive in 2017, I want to make sure the teams who appear to be at the top feel the biggest burden of arbitration. But this is only part of the equation. Pulling an example from one of these teams:

arb1

The second piece of this puzzle is to make sure you are hitting the best assets on each team. Looking at the Nannies, each of the players listed would serve as good targets for arbitration. If you really wanted to spread around the impact of arbitration you could put $1 on any of these guys and the owner in question would probably consider keeping him. However, the impact of each of these players to the Nannies is not proportional. The 2 players who stick out to me as the best arbitration candidates are Trea Turner, Daniel Murphy; then Robbie Ray and Seung-hwan Oh, in that order. (Notice, I am not strictly following the surplus calculator. I do like Ray, but I think Murphy is more valuable.) Is David Dahl a good arbitration candidate? Absolutely! However, he seems to be a bit below the upper two tiers – so I wouldn’t allocate to him. This can be a helpful way to view arbitration. Separate the players into similar tiers then target the best assets.

When I am placing my arbitration allocations on the Nannies, I am ONLY hitting Turner and Murphy. Once the arbitration they have absorbed pushes them down to the 2nd tier (after $8-$10 in allocations), then I would consider shifting my dollars to the Ray/Oh grouping. As the top tier of assets start to lose value – each dollar allocated will lessen their surplus – they will begin to look more like the players below them. If the 4 top players got hit to the point that they were similar to David Dahl (unlikely) then I would consider throwing a dollar on Dahl. However, my stance form the start is important. The money is going to be placed on Turner and Murphy (the best assets in my eyes) and no one else, until the rest of the league (through their allocations) puts enough money on Turner/Murphy for them to no longer be the best assets.

This follows very closely with my experience, most teams will have a small 2-4 player upper tier of assets (high surplus, high production guys). Those are the guys you want to hit.

What if there isn’t one clear upper tier?

Sometimes, teams won’t be as top heavy as the Nannies. In a case like this, does it make sense to allocate to many players since there isn’t a small upper tier? Below, you can see one larger tier of top assets (depending on how you view each of these names). Trevor Story, DJ LeMahieu, James Paxton, Danny Duffy, Andrew Miller, Carlos Gonzalez, and Jed Gyorko all have similar amounts of surplus.

arb2

In a situation like this, I would be fine allocating to any of the 7 above, much higher than the average team. Also, there doesn’t appear to be a big separation in value in any of these players. Would I allocate to Josh Reddick over Trevor Story? No. Is hitting DJ LeMahieu or James Paxton over Story okay? Probably. In the past, some have opined that making the team in question “feel the weight of arbitration over multiple seasons” is the optimum tactic. I agree that this is a good way to approach it – but especially for a team like this. This is a good example of a team you would want to take a more socialistic approach to arbitration with.

However, it is very different from the Nannies. With the Nannies, I want to make sure that some of the most elite assets in the league no longer exist (Turner/Murphy). Turner and Murphy could easily be traded and the Nannies will no longer bear the impact of either players allocations, but given the elite amounts of surplus both players currently possess, it would be more important to me that they do not have the same value than that (even with a trade) their owner still holds large quantites of arbitration dollars. With the depth of the Dream, the approach is the opposite. Any one of the large upper tier could get hit and they would still have 6 roughly equal assets.

For the minority of teams with one large upper tier of assets, I would want to spread the allocations around the upper tier.

There are other strategies I could get into regarding arbitration, but this should give you a good starting point for placing your allocations. Are there any specific strategies you like to employ? As always, these things have to be decided on a case by case basis and one size definitely does not fit all. Lets discuss your league in the comments and see who the best arbitration candidates are.





Joe works at a consulting firm in Pittsburgh. When he isn't working or studying for actuarial exams, he focuses on baseball. He also writes @thepointofpgh. Follow him on twitter @Ottoneutrades

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dongale
6 years ago

I took over a team this season (my first in Ottoneu). My hitters are in decent shape, but I need serious pitching help. I was thinking about targeting negative surplus players to try to force cuts and make more players available in the auction. Any thoughts on that strategy?

Trey Baughn
6 years ago
Reply to  dongale

Just my two cents but I would recommend not using this strategy in arbitration. For one, you never really know where that “cut” line is going to be for the opposing owner, so the worst case is you allocate $3 to a player (let’s say you move a $35 Felix Hernandez to $38) that owner that owner was going to cut anyway, before your allocations. The second reason is because you can almost always find pitching either in the auction or on the waiver wire, so in your specific situation I would focus on hitting the best assets in your league, which should put pressure on those owners anyway to cut pitchers close to that keeper limit (a benefit for you if they do).

dongale
6 years ago
Reply to  dongale

Just read Chad Young’s post linked above and he says that my strategy is basically wasting those dollars since the players may have been cut anyway.

KJLmember
6 years ago
Reply to  dongale

Can you do this by trading only players you were going to cut anyways? I dont think its worth the hassle.

If they are rational they will cut the pitchers anyways and youll likely get a shot at a discount in the draft. If they dont cut the players they are only hurting themselves (ie helping you).