How To Account For Keeper Inflation In Your Auction Draft

If you’re in an auction keeper league, preparing for your draft doesn’t end with producing a dollar value for each player in the player pool. Keeper leagues include keepers (shocker), and those keepers can drastically change the auction marketplace.

The key final step in keeper league auction preparation is adjusting for “inflation.” Inflation in this sense means that because owners are, in theory, keeping players at below their market cost, the relative value of the remaining player pool increases.

An Inflation Example
As a very simple example, consider a four-team league with only two keepers for each roster. The table below shows which players are being kept, at what price they’re being kept, and the “auction value” you had assigned to the player before keepers were submitted.

Team Player Keeper Cost Value
1 John Heymans 12 18
1 Brian O’Brien 15 19
2 Dave Power 18 27
2 Mike Poll 10 22
3 Brent Spurgeon 8 15
3 Mike Hay 11 20
4 Shawn McGeachy 5 10
4 Matt Rego 9 12
TOTAL 88 143

What we’re looking at here is that eight players have been kept at a cost of $88. However, the value you expect those players to produce, based on your pre-draft rankings, is $143. Those players are kept and no longer in the player universe, sure, but your total auction values should have equaled the total budget for the league – there is a $55 surplus here, and while the value those players will produce is out of the marketplace, those $55 aren’t.

In more detail, consider the budgets before and after keepers were submitted:

Team Budget Available Budget Remain
1 260 233
2 260 232
3 260 241
4 260 246
TOTAL 1040 952
VALUE 1040 897
$/$ of value 1 1.06

Before keepers were submitted, you would have assigned auction values to the player pool totaling $1,040, which is the total budget available to the league. After keepers were submitted, however, the player pool contains just $897 worth of value (the total value less the keeper values above), while the total budget remaining is $952. Again, there’s that $55 of surplus we saw in the first table.

In short, there are now $952 chasing just $897 worth of value, meaning each dollar of production now costs $1.06. The supply has been reduced, demand remains unchanged, and so prices increase.

So what do you do with this information? Well, in the most basic way, you can simply multiply all your auction values by $1.06, which will do the trick. There are more complex ways of doing this for deeper leagues and/or those with many keepers, ways that would include the impact of positional scarcity (for example, if seven of 10 teams keep a second baseman). But for today, we’re looking at simple auction inflation.

What You’ll Need
In order to calculate your own inflation index, you’ll need the following:
*The auction values you’ve assigned to each player in the player pool.
*The list of players being kept and their keeper cost.
*Your league settings (budget and number of roster spots).

Step 1: Find the total league budget
This is an easy one. Take the number of teams in the league and multiply it by the budget per team. This should also represent the total value you assigned to players when creating your auction values.

12 teams x $260 budget = $3,120 total league budget= $3,120 total player value

Step 2: Find the value of keepers
This is an easy one, too. Take the list of players being kept, find the auction value you assigned them, and total it up.

60 keepers = (Value 1 + Value 2 +…+ Value 60) = $800 of value

Step 3: Find the cost of keepers
Easy once again. Sum the cost of keepers.

60 keepers being kept = (Cost 1 + Cost 2 +…+ Cost 60) = $500 cost

Step 4: Calculate the remaining budget
Take your answer from step three and subtract it from step one. Here, you’re taking the total budget available and removing what has already been spent on keepers.

Total Budget ($3,120) – Keeper Cost ($500) = Remaining Budget ($2,620)

Step 5: Calculate the remaining value available
Take your answer from step two and subtract it from step one. Here, you’re seeing how much production value remains on the market after keepers have been removed.

Total Value ($3,120) – Keeper Value ($800) = Remaining Value ($2,320)

Step 6: Calculate Inflation Index
Take your answer from step four and divide it by your answer from step five. As in the earlier example, you’re taking the total budget available (demand) and dividing it by the remaining value available (supply) to find the new price per $1 of production.

Remaining Budget ($2,620) / Remaining Value ($2,320) = Inflation Index (1.13, or 12.9%)

Step 7: Apply the Inflation Index to your player values
For the remaining players in the player pool, multiply the auction value you assigned them by the inflation index.

Player X = $15 value * $1.13 Inflation Index = $16.95 value ~ $17 value

Partial Dollars
Inflating values is going to leave you with partial dollars in many cases. The general recommendation is to round down for lesser players and round up for better players, as I think most would agree that owners tend to use their surplus budget towards top names, not towards driving $1 players to $2 players. You also have the option to simply keep the decimal place since, after all, your auction values entering the draft probably shouldn’t be set in stone, and you’ll want to remain flexible, anyway. If they’re just a guide, then having partial-dollar values doesn’t really hinder you in any way.

In-Draft Inflation
If you’re in a league that allows for more processing time before each nomination, or have the ability to multi-task in Excel while you draft, you can also apply this same logic as in-draft inflation. If someone spends $35 on a $30 player, they’ve overspent by $5, reducing the overall budget relative to the available value, deflating prices. I’ve tried this before in the past and it’s useful, but it’s not at all paramount – you can get a pretty good handle on over- and under-spending in the draft without this calculation. It can’t hurt, though. Simply have a cell calculating the draft’s total budget available and another calculating the total player value remaining, with a final cell calculating the in-draft inflation – instead of using your pre-draft Inflation Index as the multiplier in your value column, replace it with the contents of this final In-Draft Inflation cell.

Depending on the league, properly accounting for keeper-induced inflation isn’t always going to have a huge impact. If everyone adjusts for inflation, the market moves back into equilibrium, anyway, the same way an increase in total budget would impact the league. However, it’s unlikely that everyone is going to account for inflation properly, giving you an edge on upper-tier players (who could see their price rise $3 or $4), and players in the middle (where an extra $1 could go a long way).

We hoped you liked reading How To Account For Keeper Inflation In Your Auction Draft by Blake Murphy!

Please support FanGraphs by becoming a member. We publish thousands of articles a year, host multiple podcasts, and have an ever growing database of baseball stats.

FanGraphs does not have a paywall. With your membership, we can continue to offer the content you've come to rely on and add to our unique baseball coverage.

Support FanGraphs




Blake Murphy is a freelance sportswriter based out of Toronto. Formerly of the Score, he's the managing editor at Raptors Republic and frequently pops up at Sportsnet, Vice, and around here. Follow him on Twitter @BlakeMurphyODC.

newest oldest most voted
David
Guest
David

What are your thoughts on separate inflation calculations for hitters and pitchers?

@CaliforniaJag
Guest
@CaliforniaJag

I did this on my sheet using a 2/3 split in favor of hitters. Some of the inflation was crazy. This division might cause you to have some very different inflation rates; my base inflation rate is 1.32, but if I divide it between hitters and pitchers it’s 1.45 for hitters and 1.17 for pitchers.

The best use of this, in my opinion, is to “overpay” for top-level talent that is actually underpriced due to inflation. For example, say Andrew McCutchen was thrown back. Your projections have him valued at $35, but with inflation you have his value at $47. The other members in your league that haven’t calculated inflation probably start to bail around that $35 mark, but you can confidently keep bidding knowing you’re still making a smart buy.

Jon
Member
Jon

A little late, but after many years of doing this, I don’t buy the separate hitter vs. pitcher inflation idea, for the most part.

Basically, because there’s no reason the hitting/pitching split should remain constant. Here’s an intentionally extreme example:

Let’s assume that you’d have a 70/30 split with no keepers, so $936 to be spent on pitchers. Now assume each team can keep 8 players (so 96 total).

Now, assume that all of the keepers are pitchers, for $1 each (yes, I said extreme).

There are 12 remaining pitchers to draft, and since they are the 12 worst draftable pitchers, their values will be very low – $1 or $2 each.

Let’s assume that as a group, these 9 guys are worth $15.

If we think that the 70/30 split will remain, then there is ($936 – 12 * 8 * $1) = $840 remaining, and it’s chasing $15 of value. Inflation is 5500%.

Obviously this is unrealistic, but if there players just aren’t there because of the makeup of keeper lists, then teams will shift their money to offense, where the good players are.