Big FAAB Spending – A Historical and Risk Management View

Introduction:

If you are reading this article, you likely play fantasy baseball. You are already well aware of the FAAB extravaganza which occurred two weeks ago. If your fantasy squad is sitting 40 points out of the money, the lure of an impact prospect on your roster was incredibly enticing. The peer pressure of bidding on a top 10 prospect surely lured you in to spend significant free agent resources on those young rookies.

The Great Fantasy Baseball Invitational (TGFBI), was created by FanGraphs’ own Justin Mason. It is a compilation of 315 fantasy baseball experts – all who put out content one way or another (writing, projections, podcasts, etc.). The experts were divided into twenty-one 15-team 5×5 mixed roto leagues, with NFBC rules and regulations.

You can find out more about TGFBI and follow the experts here. You can listen to me regularly on the official TGFBI analysis podcast, called “Beat the Shift” right here.

The experts of TGFBI were not immune to the May 19 FAAB extravaganza and accordingly indulged. In TGFBI, owners are given $1000 for the season to bid on Free Agents on the waiver wire. There is no $0 bidding in TGFBI, all players must be acquired for at least $1.

Below is a summary of the FAAB results of 5/19 across all 21 TGFBI leagues for the top prospects:

That is a considerable spend. Owners spent upwards of 50% of their entire yearly FAAB this week on prospects.  If you wanted to acquire one of the top 4, it may have taken 20%+ of your FAAB budget in half of the leagues to do so.

But we have to ask ourselves – was this the most prudent use of fantasy resources? Were we better off saving money for new closers that arise in today’s [to use a Matthew Berry term] closer carousel environment? Should we be saving money for picking up hot players when injuries occur to our fantasy rosters (since injuries are more abundant now than ever)?

Fantasy owners who believe that it is prudent to invest highly and early in the season in prospects, will state one or more of the following arguments:

• Prospects have the highest upside potential of any player available on waivers. You need to spend more, because the upside is greater.
• Spending a large amount on an impact player early on in the season is more optimal than spending it later in the season because you have use of the player for a longer period of time.
• Look at Juan Soto last year, and how he impacted fantasy teams.
• What else will you spend your FAAB money on?
• Spending on prospects is fun and exciting!

Fantasy owners who believe that you need to be more cautious on spending highly on prospects this early in the season will state one or more of the following arguments:

• Prospects are not guaranteed to succeed immediately in the major leagues. In fact, typically prospects do not hit the ground running. You may be wasting lots of money on too high of an expectation.
• Prospects are not guaranteed to earn playing time and are subject to demotion. Look at Carter Kieboom and Nate Lowe who were quickly sent down to the minors after their call-ups.
• It is better to save money for the end of the season. You will then be able to have the hammer to pick up your needs as they arise (hot players, injury replacements, streaming pitcher matchups, etc.).
• Closers are scarce, and also more cost effective to be acquired in FAAB as opposed to at the draft. A large portion of FAAB should be allocated towards closers.
• You don’t need prospects to win at fantasy baseball.

These are all valid points. There is no right or wrong here; it is a trade-off. It is an exercise in risk/reward. Fantasy players need to their own cost benefit analysis. The upside of hitting big on a prospect must be weighed against the downside of overspending on FAAB and handicapping your resources.

Today, I will attempt to provide you with some historical context of the inherent risk with the various types of FAAB pickups, and how they had played out. I will look at successes and failures associated with last year’s FAAB spend in the TGFBI leagues for various categories of player pickups.

Historical TGFBI hit and bust rates won’t be the tell all and end all of a return on investment analysis. However, with the largest number of experts playing in a single unified format – I believe that it is meaningful information to place under our consideration. At the very least, it will provide the reader with another nugget of analysis to reflect upon – and might stir some more side conversations.

Setting the Stage:

Using 2018 data accumulated and provided to me by Smada (@smada_bb), I sorted through the 2018 FAAB spending in TGBFI. Last year was the inaugural season of TGBFI, so there is only one season of data available to us for this format.

I extracted the players for which the vast majority of owners bid upon within a span of a week or two. This will represent to us the players who were part of a “FAAB frenzy.” Further, I whittled down the these “frenzy” pickups to ones which the median bid was larger than $40, or 4% of a team’s annual FAAB budget.

In the end, I found 44 players for which the median bid value was substantial and closely timed. Many of these players might have been acquired for $1 in their leagues. Some players who were not in the 44 may have gone for hundreds of dollars in one league. However, the beauty of TGFBI is that we get a consensus on FAAB spend. Thus, using a 4% median FAAB spend should be appropriate for this exercise.

Definitions:

• Median Bid – The median FAAB bid by TGFBI teams within the “FAAB frenzy.”
• Average Bid – The average FAAB bid by TGFBI teams within the “FAAB frenzy.”
• Week – The week of the season where the FAAB frenzy was centered upon.
• 2018 Value – The final full season returned value in an NFBC contest. Using my personal Z-Score based auction calculator, this will give us what each player was worth to roster all season long. (Note that as this is a full season figure, players who did not play for the entire season will have a diluted value. This is not a per-week valuation which is a bit more complicated.)

In terms of organizing results, below are the devised classification of players, and verdict descriptions:

Classifications:

We will classify players into 3 types:

• Prospects – Players who were picked up with little or no major league playing experience.
• Hot Players – Players acquired because they were playing well, who started to obtain more playing time, or landed a new and significant role, etc.
• Closers – Players acquired in order to earn saves.

Verdicts:

I have assigned value verdicts to all 44 players judgmentally. I considered various factors, which included:

• Full season values
• Playing time
• When they were acquired in the season
• Unique category contributions

For Prospects and Hot Players, we will classify 2018 player results into four categories:

• Gain – Highly profitable players. Players who returned a value far above replacement for the season, or who made a large fantasy impact for the length of their playing time.
• Par – Players who either earned near-replacement value, or who provided significant unique category contributions.
• Some – Players who returned below replacement value but provided owners with some value.
• Bust – Players who returned negative value.

For Closers (saves being the primary reason for the FAAB pickup), we will classify 2018 player results into three categories:

• 10+ Saves – Players who earned at least 10 saves. This will be a proxy for a successful FAAB closer acquisition.
• 5-9 Saves – Players who earned 5 to 9 saves. This will denote a small or short term FAAB closer success.
• 0-4 Saves – Players who earned less than 5 saves. This will denote a FAAB closer bust.

The 2018 “FAAB Frenzy” Pickups:

Below are the 44 “FAAB frenzy” pickups from TGFBI in 2018, along with their classifications and verdicts:

Here are the 44 “FAAB frenzy” pickups from TGFBI in 2018, along with their 2018 playing time and 5×5 stats:

Results:

Onto the analysis of the results. Let’s take a look at the verdicts of each of the classifications separately.

Prospects:

Juan Soto is clearly the 2018 maximum in terms of FAAB spend and was somewhat an outlier. Owners spent $512 on average for him in week 9, with a median spend of $482. I would say though that he was well worth the spend.

The other notable high value player was Miguel Andujar who earned $23 of full season value, and was acquired very early on in week 3. He went for $78 on average across TGFBI leagues, with a median bid of $43. Clearly, on a value per FAAB dollar basis – Andujar was the supreme acquisition of the group.

However, looking at the rest of the prospects that went for over $52 of FAAB, there were almost no successes. Other than Freddy Peralta, no other player earned either a Par or Gain verdict. In total (including $40-$52 bids), about two-fifths of all players did earn Par or Gain verdicts. 29% of the group were total busts.

Let’s see how the prospects compare to the other classification groups:

Hot Players:

The first item to note is that there were more prospects (17) than hot players (12). TGFBI owners ponied up big FAAB money for a larger number of player prospects.

Matt Adams was the highest FAAB acquisition last season for “Hot Players.” He was acquired for an average of $123 with a median bid of $111. Despite only 306 ABs, he earned above average full season value – mostly due to swatting 21 HRs.

Jurickson Profar was the highest earning player of the group, earning a full season $15 value. 20 HRs and 10 SBs, along with 82 runs and 77 RBI, all as a waiver wire pickup – was indeed an excellent result for a $56 average FAAB spend.

This group produced a 50% hit rate on Par and Gain verdicts. You were equally as likely to succeed with the FAAB acquisition as you were to fail, which exceeded the prospects. The bust rate of this group was also better than the prospects – with only 2 out of 12 players being complete value drainers.

Of course, it is important to note that some of the players’ production in this cohort occurred before the waiver wire pickup (which is why they were acquired). Not all of the player production and value was actually earned by the rostering fantasy teams. But …. the players were also generally acquired earlier on in the season, so their value contributed for a larger portion of time.

Closers:

Hunter Strickland was bought on average (during FAAB week 2) for a whopping $235, which was second in spend only to Juan Soto. At week 2, owners wanted to secure as many saves as they could and felt that Strickland had a firm grip on the role. Strickland finished the season with 14 saves, so the 20% FAAB spend did lead to a significant (but not exuberant) return in the needed counting stat. Strickland’s 14 saves was the third highest save total off of the waiver wire. Only Joakim Soria’s 16 and Hector Rondon’s 15 saves trumped Strickland.

Jose Leclerc provided the largest full season value of the closers at $10. His 12 saves (which were all late in the season), coupled with a final 2018 line of 1.56 ERA, 0.85 WHIP and 85 Ks was absolutely worth his $98 average FAAB opportunity cost.

About half of the closers who went for considerable FAAB did in fact save over 10 games, and two-thirds earned at least 5 saves. 5 of the 15 closers (33%) only earned 4 or fewer saves and were complete busts.

The fact that about half of the closers purchased did in fact succeed (saved 10+ games), means that the closer class was indeed the best cohort in terms of success rate. This does not even count some highly valuable 5-9 saves players such as Jose Alvarado – who helped fantasy teams in other scoring categories. Alvarado did in fact earn positive full season fantasy value.

Conclusion(s):

Here is what I draw from the above:

The highest of the player values came from the prospect class. Juan Soto and Miguel Andujar were players that were able to take a fantasy team on the cusp of excellence and propel them into title contention. Of the other groups – the hot players and the closers – Jurickson Profar was the only other player that earned anywhere near the magnitude of value as some of the prospects.

However, for players who went for a median bid of $52+, prospects were by and large a bust.  Those who bought Juan Soto – even at his exorbitant price – were successful. Almost all of the other expensive prospects, did not help enough to justify their FAAB cost. The Michael Kopechs, the Fernando Romeros and the Garrett Hampsons (the busts) were far more abundant than the near-successes. For the prospect class – you were far better off purchasing players in the $40-52 range, which included a number of successes such as Christian Villanueva, Yonny Chirinos and Franmil Reyes.

What I gather is that a 4-5% FAAB spend on prospects is the sweet spot, where a fantasy owner would have the greatest chance of finding a success, yet which has a large upside. For prospects, a 4-5% FAAB spend has the largest return on investment.

Sure, if you have touted an Austin Riley and believe that he is worth a 30% FAAB spend, then go for it! Looking for the 4-5% FAAB price point means that you may miss out on the top end of the prospect market. But all things being equal, a 4-5% spend is a more efficient use of fantasy capital.

If I was going to spend 6-20% of my FAAB, the greatest return on investment seems to be with the closers. The success rate (getting the saves which you pay for) is greater with closers than for any other class of pickup. The returned value that closers provide is also excellent for the average price point.

It may be wise to allocate a large percentage of your FAAB dollars for closers, and it may be wise to save the spend for later weeks in the season. Whereas large FAAB prospects are purchased earlier in the season, closers are purchased later on. Around the MLB trading deadline, new closers emerge and gain the role following a trade. For example, Jose Leclerc was a week 19 FAAB pickup who did just that.

As for riskiness – the hot players seem to be the safest category of pickups. 83% of the hot players were not complete busts. What that tells me, is that for injury replacements – hot players are a safe way to manage your team’s roster. Unlike the prospects, the distribution of successes and failures seem pretty even over the range of FAAB bids – so that you need not to overspend on hot players, but you shouldn’t underpay. Paying the market price is the way to go for acquiring hot players to fill holes on your fantasy squad.

Once again, many thanks to Smada (@smada_bb) for providing me with the underlying data of this analysis. Thanks also to one of my interns, Jacob Szlechter for assisting with some of the data cleanup.

There is never going to be a “don’t buy prospects” or “spend on prospects” or “save for closers” one-size-fits-all advice. One should be aware of the risk characteristics of each type of purchase before exercising a large FAAB gamble/investment as the opportunities arise.

Your risk appetite should differ depending upon where you are in the standings. If you found yourself in first place come May 15, you would lean more conservative – and not make a 10% FAAB prospect purchase. If you were in last place – you need to increase your team’s risk – and should take a larger gamble on a high upside player. Plan your spend commensurate with your needs, and accordingly manage your risk.