Does Skin in the Game Matter?

A while back, I brought forward my thoughts on being 100% transparent about my weekly player acquisitions. The article started many discussions, but my thoughts kept coming back to one point. Does it matter that I have some skin in the game? I lucked into a position to provide fantasy content, does it matter if my ideas are successful when there is quite a bit on the line?

Note. For this article, I’ll use tout in place of an industry expert for consistency sake. Also, for the game’s participants, I will use owners.

I felt every tout should have some skin in the game and let their results do some of the talking. Some touts may disagree on this take, but I needed to find out and joined a few NFBC leagues. Besides just rostering a team, I felt I needed to be competitive.

Some of this belief may come from my own insecurities. I know I’m not close to the most entertaining personality, so I think my results may give me credibility. I have no idea if this is true.

Part of the belief comes from Ray Dalio’s book, Principles: Life and Work. In one section he states (p. 376):

“Remember that believable opinions are most likely to come from people 1) who have successfully accomplished the thing in question three times and 2) who have great explanations of the cause-effect relationships that lead them to the conclusions.”

So, do I need to be successful in all formats for others to believe me? So many questions.

While I’ve participated in Tout Wars for three years and won it twice, I’d still hear rumbling that it’s nothing close to the competition in the NFBC. The “personalities” participating in the industry leagues are just looking to tweet out their results or talk about them on the radio. I decided to take the plunge with my own money.

After finishing my live NFBC draft, my LABR auction came up and immediately it was called it a “kid’s league”. The LABR AL-only league may be the most loaded industry league with an NFBC high-stakes player, Larry Schechter in it. All the LABR touts, but one, have won multiple industry leagues. It’s the experts league of leagues but some still considered it a joke.

I brought these ideas to some others in the industry who thought the expert leagues were tougher because the participants didn’t want to look bad. The same discussion, two extremely different takes depending on the audience.

Both groups have something to lose, those just in the NFBC with their money and those in industry leagues with their reputation. The question remains, are different strategies need to be followed by the different groups since they have different goals? Those with money on the line may take steady, known quantities while the industry touts can test some new novel ideas and if it succeeds, they look great. If not, the results are ignored.

So, does a tout’s recommendations and strategy depending on if they have a few thousand dollars on the line? Most will say it doesn’t change their approach, but I have my doubts.

Should touts play with something more than skin in the game beyond just their reputations? The author of Skin in the Game, Nassim Nicholas Taleb has a couple of thoughts on experts who don’t follow their advice.

“Don’t tell me what you think, tell me what you have in your portfolio.”

And

“Because what matters in life isn’t how frequently one is “right” about outcomes, but how much one makes when one is right. Being wrong, when it is not costly, doesn’t count…”

Most of his ideas stem from the financial market but most economic ideas are completely transferable to fantasy baseball. I can see how some non-experts think like Taleb since they make their living in the real world where each decision matters if their company sinks or swims. They don’t get to experiment with their business. They need results to keep going. Touts to them are akin to university professor talking about all these great ideas but don’t put them to work.

Some touts have taken the next step and put some skin in the game. In this year’s NFBC Main Event, a few dozen industry “experts” have entered the arena and many others are in smaller stakes contests. Not even a half dozen joined the official high stakes ($10K or more) leagues which are too rich for my blood. Other touts may not want to put their reputation on the line in money leagues. Some legitimately might not have the money.

At the time I wrote the article, I felt having skin in the game is important. The more I thought about the different sides of the debate, I don’t think there is a right answer. Most owners play because they love baseball and want to have a fun time. Others see it as a major competition and may be willing to put down some money to bring out the best in everyone and reward them. The problem comes when a tout blurs the line and tries to cater to both groups. The tout wants to reach the masses and still be a considered cutting edge by the top-10%.

My competitive nature and desire to never become complacent pushes me to the second group to the point of alienating some industry touts. I don’t think there is a way to satisfy everyone. Each tout must make should decide who is their audience. The same decision exists for owners.

Does repeated analysis on the first three rounds help the owners the most or do they need to know 300 to 400 players or do they need to go even deeper in dynasty leagues? It’s a big matching game where each consumer needs to find the information which helps them the most and ignore the rest. It’s impossible nor helpful to consume everything. An owner needs to find the touts who help their individual game.

So back to the original question of does it matter if a tout has skin in the game? It depends if the tout is trying to gain the respect of owners by playing (and hopefully succeeding) at the top level. Also, it may not matter for the tout because they are trying to reach more of the casual owner. And there are various levels of interest in between. The key for everyone, touts, and owners, is to pick the correct path and master it.

We hoped you liked reading Does Skin in the Game Matter? by Jeff Zimmerman!

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Jeff, one of the authors of the fantasy baseball guide,The Process, writes for RotoGraphs, The Hardball Times, Rotowire, Baseball America, and BaseballHQ. He has been nominated for two SABR Analytics Research Award for Contemporary Analysis and won it in 2013 in tandem with Bill Petti. He has won three FSWA Awards including on for his MASH series. In his first two seasons in Tout Wars, he's won the H2H league and mixed auction league. Follow him on Twitter @jeffwzimmerman.

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Jim
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Jim

Jeff, I met you briefly at the Arizona SABR conference two or three years ago and you were friendly, accessible, and engaged. So I am not surprised you struggled with having skin in the game. You care.