New and Improved ottoneu Arbitration Process

The off-season arbitration process in ottoneu is likely the single most polarizing aspect of the format. In fact, in the FanGraphs Q&A section, there is a thread titled “Do you hate the arbitration rule in ottoneu?” with split answers. The initial post simply says, “I hate it.” A later reply says, “I love it.”

Personally, I am a fan. I believe some form of arbitration can help restore balance. But the system we have in place now is probably not the only system that would work and so for the past few months, the ottoneu founders have been developing rules for a new arbitration process, one that lets the market decide which players need to have their values raised, without pulling anyone off a roster.

The new system works like this:

Each team gets $25 to allocate to players on other teams. Every owner has to allocate at least $1 to every other team and can allocate no more than $3 to any given team. The dollars to a given team can be given all to one player or split among up to three players (due to the $3 limit).

At the end of the day, salaries in the league will have increased by $300 – which we found to be roughly the same amount of increase seen under the original arbitration system – with each team taking on between $11 and $33, depending on how the league assigns values.

To help make this more clear, check out this Google spreadsheet. This is a sample allocation that was conducted by the original ottoneu league. There is a tab for each team and on each tab is a column for each owner. So if you click the tab for Pretzels (my team), you will see that the guru of ottoneu, Niv Shah, allocated $2 of his $25 to my team – $1 to Jordan Zimmermann and $1 to Allen Craig. Geoff Newton, the brains behind the creation of ottoneu, allocated all three of his eligible dollars to Craig.

Let’s look at another team – Tiger Striped Dick(s). While the dollars allocated to my team were split amongst three (and primarily two) players , all except one of the dollars allocated to this team went to bringing Mike Trout’s salary up to where people felt it belongs. Dave Stewart’s Balls, on the other hand, saw eight different players receive allocations.

In this case, no team got a full $33 allocation, although Gerbils on Speed came close, with $32. No one only took on $11 either – the low was West Coast Wellness with $17. And there was almost no correlation between place in the standings and dollars allocated. The last place team at the moment (BrewCrew for a While) took on only $22 while the Gerbils took on $32 from 11th place. The top four teams did get $29, $28, $28, and $27 allocated, but the fifth place team took on just $17.

Part of the beauty of this system is that each league can decide for itself (or let the market decide) what the goal of the arbitration is. Clearly our league took two approaches – first, we focused on bringing underpriced guys up to the market value, hence the big hits on Trout ($5 to $35) and Andrew McCutchen ($13 to $33). Second, we punished the top teams, hence four of the six largest allocations going to the top four teams. It seems to me we heavily valued the first goal over the second (as evidence by the other two top six allocations going to bottom three teams).

As I have discussed this with ottoneu players a few questions regularly come up:

Woo hoo! When can I switch?
The new system is being built as we speak and should be ready to launch for this off-season. If you don’t want another season with the vote offs, you can switch to the allocation system this year.

If I like the old system, do I have to switch?
No, absolutely not. The new system is an option and league commissioners will be able to change the settings for each league to reflect the system they want.

If I switch, what happens to the $5 coupons we had under the old system?
Gone. You get to keep guys if you want, and if you cut them loose, that is your choice. As a result, there are no more coupons.

So if this is an option, what are you going to do in your leagues?
Well, the original league has already agreed to this change and we will be making it this off-season. For my other leagues, I am going to strongly recommend we make the change – I think this system is more fair and more interesting.

Then why would anyone not change?
This system is also more complicated and more time-consuming. ottoneu is pretty complicated and time-consuming, as is, and I fully expect that some leagues will decide that the voting system is simpler, cleaner and quicker. Another of the owners in the original ottoneu league felt that the allocation prevented certain players from reaching the salary they should. Specifically, he felt Trout would have gone for way more at auction than his salary was raised to via this system. I am sure some leagues will decide that is a good reason to stick with the existing system. Finally, there is also some risk. We have worked hard to build a system that works, and the test run results I shared suggest that we did well, but this has never been used in practice, so there is a chance it proves to be a less-than-ideal solution (although I am confident that will not be the case).

How will the allocation work?
The technical details are still being hashed out, but the idea is that teams will be able to allocate over at least a week-long period after the end of the season, and the allocations will be transparent (meaning that when I allocate, I will know how everyone who allocated before me spent their dollars). The idea here is that I may want to change my allocation once I see what others have done. Perhaps I want to boost Trout to $30, but not higher – if I know everyone else has put their dollars on him, maybe I want to put my dollars elsewhere. In our test run, we found this to be really helpful. Owners didn’t (at least I don’t think…) do anything spiteful or try to get back at someone who hit them hard; but they did make adjustments based on what had already happened, which helped to spread the $300 over a wide range of players, instead of concentrating it on only 12.

Why $25 per team? And why the limits on allocations per team/player?
As mentioned above, our sense was that leagues were seeing about a $300 price correction from the old system. The issue we were trying to solve for wasn’t the price correction, it was that the price correction was being concentrated on 12 guys instead of spread over many more (62 different players received at least a $1 allocation in our trial run). We aimed to keep that $300 total after considering $22 per team (so $2 to allocate to each other team), and many other variations. The per team limits were put in place to avoid any one team being hit overly hard. We want to keep values in line, not punish an owner who expertly built a great team of undervalued players. This should maintain competitive balance, keep salaries in line, and limit the value of lucky buys – it should not prevent an owner who consistently finds great values from building a dynasty or being regularly competitive.

Did you know that ottoneu was the single greatest thing ever invented?
Yes, I did. I propose that in the future we use it to replace “sliced bread.” So if you are super excited about this new rule, you should say, “This new rule is the greatest invention since ottoneu, which is way better than sliced bread.”

How can I provide additional feedback on ottoneu?
In the FanGraphs Q&A section, I have created a thread called “ottoneu Suggestions Thread.” This is a place where you can post comments, concerns or questions about the format. If you want to suggest a rule change, comment on the site, etc., add an “Answer.” If you want to support someone’s rule change, vote for it. If you want to comment on it (something other than “I agree,” which you can express as a vote) reply to that answer. Niv and I will be actively tracking the thread, looking for recommendations that can improve the game, and clearing up any confusion about why certain rules are set how they are set. I can’t promise quick responses all the time, but we will do our best! You can also always email help -at- ottoneu -dot- com or tweet @ottoneu.