Hindsight is 20/20: An Ottoneu Auction Recap

Last night was the auction for the FanGraphs Staff League, going into year 13 and still going strong. My recap will focus on how things went for me and my co-manager, Niv Shah, who built and runs Ottoneu. The goal is to share a lesson you can learn from us so you don’t the mistake we did. But if you want to see the full draft, you can! Eli Ben-Porat streamed the auction, so you can see how this played out live.

The league is made up of FanGraphs staffers (of course), former staffers, and a couple of friends of the staff. It’s a fascinating league because almost everyone is doing their own analysis/ranking/values/draft prep so there is little groupthink. The diversity of thinking makes for an interesting auction.

And that mention of diversity in thinking is what we in the content creation business like to call foreshadowing.

But before we get to that, let’s go back to a time in the not-too-distant past. Kyrie Irving was still a Net. Carlos Correa was still expected to play in the World Baseball Classic. February hadn’t even started yet. It was January 30, 2023, and Niv and I were finalizing our cuts.

And cut we did. We dropped our roster to 21 players and entered the draft with the second most cash available. We felt good about this! We had a strong core!

It’s a solid core that needs stability at MI, depth in the OF and a util bat. We can get that at auction, right?

Then we started looking at the other cuts and, well, the cupboard was pretty bare. Paul Goldschmidt is out there. But after that, our util options were down to Anthony Rizzo or a J.D. Martinez/Brandon Belt/Jared Walsh type. At MI, we could go after Xander Bogaerts and Francisco Lindor, but our next choices were Ketel Marte, Jake Cronenworth, Gavin Lux, and Ryan McMahon.

We had to be honest about how likely we were to get the big pieces we needed. With that level of scarcity and the inflation inherent in such a long-standing league, we figured the three guys we really needed (Goldschmidt, Lindor, and Bogaerts) would cost at least $120 total. We had $173 to spend, so it was possible, but it would have left us in a tough spot filling out the rest of the roster, and we weren’t confident $120 would be enough.

So we pivoted. We drew up a plan focused on upside. It would be a high-variance plan to either a) roster a bunch of 2023 breakouts and compete with a surprising roster or b) find a handful of core pieces to build around for 2024. We set cap prices on injured/bounceback vets (Bryce Harper, Jesse Winker, Shane Baz, Walker Buehler, etc.) and ranked the potential breakout candidates at each position (Spencer Torkelson, Curtis Mead, Spencer Steer, Mastaka Yoshida, etc.).

We executed that plan pretty well. $20 Yoshida was our biggest buy, and we like his upside at that price. Our top three targets at CI were Torkelson, Kyle Manzardo, and Anthony Rendon – we got all three. We were interested in Ketel Marte if he were single digits, but our next three MI were Steer, Mead, and Michael Massey – we got all three of them as well. Our other adds were also upside plays we like – Brandon Marsh, Trevor Larnach, Kerry Carpenter, Trent Grisham, Brandon Belt, Edouard Julien, Tarik Skubal, Brandon Pfaadt, Shane Baz, Max Meyer, Mackenzie Gore, and Gavin Williams.

Sounds great, right? We nailed it! Except we made one very early mistake. Early like a few days before the auction. Remember the “diversity of thinking” foreshadowing? Well, our prediction that Goldschmidt + Lindor + Bogaerts would cost $120 turns out to have been something only we were thinking. They went for $78 total. Goldschmidt stopped at $33, well short of what I expected. Lindor made it to $28 which feels like a fair price not drastically impacted by inflation and scarcity. And Bogaerts went for $17. Which seems wild to me.

Adding insult to injury, we left the auction with $87 in cap space. Leaving with a lot of free cash was part of the plan – if you are playing high variance and looking for upside, being able to pick up literally anyone you want in season has value. But we could have paid for all three of those bats without a problem.

It’s not fair to assume we could have them for <$80. I have no idea how much higher bidding would have gone had we gotten involved but had we pushed those three up by $5 each, we could have won all three for $93. We would have to find $6 of savings later in the auction, but that was certainly feasible. Even at $100 total, we would have been fine.

The lesson, however, is not to regret your draft decisions. It’s also not to just be super accurate when projecting the market. The first serves no purpose; the second isn’t really possible.

The lesson is about contingency plans.

Planning for an auction is effectively a flow chart. You identify your top targets and have a plan or plans in place depending on what they cost. In this league, we started thinking we needed that trio and the first question in our flow chart was, effectively, “can we afford all three?” The “if yes” branch of the flow chart was pretty straightforward for us, but the “if no” branch was scary. We didn’t see a super clear backup plan. And we were pretty sure the answer was no. So we decided not to take that risk, and instead to change the first question to, “Can we get Bryce Harper for a steep discount to build around for the future?”

So when Goldschmidt and Lindor went relatively cheap, they weren’t cheap enough to be obvious buys and they didn’t fit our plan, so I ignored them. When Bogaerts went really cheap I was too deep into our other plan to adjust – and, to be honest, I just messed up not pushing him towards $20, at minimum.

In this case, the first step in our flow chart should have been: Can we get Lindor, Bogaerts and Goldschmidt for less than $110? If yes, do it and follow it up by filling in depth as needed. If no, then and only then pivot to a future-focused plan and look at Harper.

Had we done this right, we might have decided that while $120 was more than we wanted to spend on them, if Goldschmidt was going for <$40, there was a good chance we could get all three for $100, and that would have been workable. But we were too narrow in our planning.

Instead, we assumed the answer was no, we cannot afford them, and started our flow chart one step down. It was a bad assumption, and it looks like we suffered as a result.

After all, we all know the old saying, “When you assume you make…a mistake and miss out on getting two stud SS and an elite Util bat for a reasonable price.”

Looking at the rest of my drafts this year, I don’t want to get too out there (“What if no one bids on Juan Soto and I get him for $3?”) but I’ll also avoid doing the opposite and thinking too narrowly. It was unlikely those three would go for less than $100 let alone less than $80, but by not even entertaining the possibility, we missed out.