On Market Value Stars
We’ve had our first big offseason trade in the ottoneu league FanGraphs Staff Two. Chad Young and prospect guy Marc Hulet combined for a doozy. In the aftermath of the trade, Chad and I discussed the relative value of his players versus similar guys I had available. While I’ll refer to our ottoneu league, today’s topic has implications for most keeper leagues.
First, let’s touch upon the trade.
Chad Acquired
$8 Maikel Franco
$5 Blake Swihart
$6 Rougned Odor
$10 Jorge Soler
Marc Acquired
$48 Buster Posey
$48 Felix Hernandez
$3 Carson Smith
Marc had about $200 of salary space while Chad was way way over the cap. In a sense both owners did the right thing for their respective payrolls. Marc added a couple elite names that were affordable for him. Chad snatched four young, cheap core performers.
Honestly, I’m a little sour about the deal. Chad added four players I had on my list. And I know I had superior talent available including $62 Mike Trout, $64 Clayton Kershaw, $36 Zack Greinke, and others. Marc made the offer to Chad without so much as pinging me. (He turned down a feeler offer from me earlier in the day without comment).
Chad and I manage a dynasty team together so we often chat about our shared leagues. I griped that he got a steal when I could have easily outbid him. He countered that he believed Trout and Kershaw are at market value based on this analysis. It’s a good article and well worth a read for ottoneu owners.
In short, using data from all FG Points-based leagues, Chad finds that Trout owners who pay over $65 usually finish in the bottom half of their league. When he’s $65 and under, his owners finish top four (i.e. better than expected). This seemingly clashes with my own pricing analysis that has both Trout and Kershaw at over $80 in market value. Inflation accounts for a healthy chunk of my number – I’d pay about $68 for each in a fresh league.
Chad also informed me that he found no evidence for an inflation effect. Regardless of league age, the inflection for Trout helping his team to victory was right around $65. This is not an intuitive finding. In fact, it ensures that some sort of behavioral phenomenon is in play.
In an old THT article (which I can no longer find), I discovered that keeper inflation plateaus after the third season of a league. In that analysis, I looked at a small sample of 12 team 5×5 leagues with set keeper prices ranging from $5 to $7 per player. The draft price of players increased in the second and third draft because there was more surplus value kept. Thereafter, an equilibrium was reached. Since the findings mirrored expectations, I wasn’t concerned about the small sample. Ottoneu is similar enough to follow the same principles.
So we have a sticky situation. Actual data says that Trouts over $65 are detrimental to team success. Projections say Trouts are worth anywhere from the high $60s to low $80s depending on league age. Actual data says league age is irrelevant. Can we reconcile the actual data with the projections?
Actually, yes. Simply put, the use case for an expensive Trout is very team specific.
An entirely market rate team should be expected to finish somewhere between fourth and eighth. As Trout approaches his market rate, there is a greater onus to fill the rest of the roster with big bargains. If Trout is relatively cheap, then his owner has more room for error. And because Trout is such a premium asset, the effect is much larger than with a player like Anthony Rendon.
My theory – and it’s entirely unprovable – is the owners with $65 or greater Trout were not prime candidates to own him. I would expect to find these teams entering the season with a $1 Michael Morse at first base, a $5 bullpen, or some other punted position. Any kind of punt is a bad idea in ottoneu points.
If a Trout owner didn’t punt a position, then his team should have performed well (subject to injuries). You should be able to own Trout at close to his market rate and still succeed. It’s just that your margin for error is smaller.
For example, the team I built last season could have easily succeeded with a $70 or higher Trout. I simply wouldn’t have drafted an $18 David Wright to back up Matt Carpenter. Wright actually accounted for a small net negative because I sat a few good Carpenter and Alex Rodriguez games to use him.
Alternatively, the team I have now is not a good fit for Trout. To keep Trout, Kershaw, and Greinke, I’d have to start Brock Holt, Franklin Gutierrez, and draft 20 $1 players. Woof.
Going back to the trade, Marc was exactly the kind of owner who could have benefited from a Trout or Kershaw. He still has salary space, but every big upgrade will cost him one or more of those cheap studs he needs to support these swaps.
However, Marc can still play another angle. In ottoneu, the ability to trade money during the season causes elite player trade value to surge after the draft. If Trout costs X in the offseason, he’ll cost somewhere around 2X in-season. By virtue of having salary space, Hulet could play Trout middleman and earn a tidy profit in the process. Not every Trout owner has to be a contender.
You can follow me on twitter @BaseballATeam
Nice piece, and way to go turning a sour note into an objective article.
But seriously, why don’t people don’t shop around? Especially with MONTHS to go.
This is my biggest pet peeve. I get it that it is not worth shopping around if you are trading bench fodder for bench fodder (or even mid range guys for mid range guys), but as soon as a top 20 name pops up, you should be thinking that there may be a better deal out there.
You always get sour grapes comments, but in some cases the trade made was just terrible, and if they had tried to shop their players at all, they would have gotten double what they ended up with.
I’m all about building up assets this time of year. I sure like Chad’s end
Me too
King Felix showing signs of injury. Lot of pitches in that arm. I think Chad made a fabulous deal. I’d be sour too.
Yea I don’t really think either player is especially keepable at those prices. Marc can certainly afford to do so, but there isn’t any profit in it.
For the same amount of money, I could’ve (and would’ve) offered Kershaw, Lucroy, Kazmir.
Brad, I agree with your arguments here. The analysis of their owners’ winning percentage at different prices is a silly way to value a player for the following year. Why not do it for every player in the game to evaluate their value?
As you suggested, the key is that the winning team has to maximize their overall value. That’s a more difficult task if the entire team is loaded up a collection of players <$10. It may be "easier" to cycle through cheap players in a non-competitive league, but you'll still have to get excess value from these players to win the league. Maximizing your total value usually means spending your full allotment, and getting excess value up and down the spectrum. You're likely to get a few "homeruns" out of low value guys, but it's not possible in a competitive league to maximize your value and only use cheap players. The misspricings aren't going to be egregious. If you have cheap value being kept suggesting that you'll be competitive, you should be seeking to the maximize the points/$ for your remaining budget. Maybe your opponent is high on Felix Hernandez, but he should be theoretically indifferent between market value superstar A and market value superstar B. Or, to use the executed trade as an example MarketValue Posey + MarketValueHernadez = MarketValueSuperstar. But as you noted, and I agree with, your superstars are under market value, so should be preferred, as they can be paired with a cheaper market value player (who comes with no premium, either).
When planning for next year, it's not helpful to do an analysis and learn that owners of Correa and Schwarber for $1 won their league 80% of the time, and there was a dropoff in winning percentage when the price rose past $15. That doesn't tell you what you should bid on Correa and Schwarber next year, nor does it tell you what you should bid on next year's prospects. It tells you more about the types of owners that wind up with Correa for $1, and the habits of owners who spent $15 on Correa.
In Chad’s favor, I do think his analysis provides some value for extremes like Trout and Kershaw. At the very least, it highlights that a team like mine shouldn’t plan to go with 15 $1 guys just so I can hang onto my stars.
The analysis style doesn’t scale down to anybody who isn’t hyper-elite or anybody who isn’t roughly market value (i.e. if you felt Schwarber was one of those hyper-elites). It would be interesting to see the same analysis for all players in the price bands he evaluates.
you could always calculate a price per point at different tiers, and figure out what surplus value you need to walk away with.
My bet is that you can win with a bunch of 15-25 players since there is likely a decent price per point. The best values are likely the really cheap guys (a $1 guy that gets 100 points is $1 per 100 points, for a $60 guy to do the dame ppp then he needs 6000 points), but at some point you have to evaluate with the roster spot in mind to maximize return.
Either way there looks like there is not that much surplus value going either way. Swihart never was a blue chip hitting prospect, and expecting more than 15hr with .270 is too high. He is a great glove with above average for a catcher bat. THat is not worth much more than the $5-10 range. Soler bombed last year, so $10 is about where i would be buying this year, cross fingers that he rebounds, cut bait if he does not. Odor is still young, and has been elite in stretches, but still young and has not put together a full season. That leaves Franco, and his half of a season of top 100 stats that ended with an injury. They are all great buys, and guys i would love to build the back end of my team around late in an auction, but none of them are steals.
Of course you can. If your player valuations are right, a team made up of 23 (my league uses 23 roster spots, I don’t know about other people’s leagues), $11-12 players should provide exactly as much value as a team made up of 20 $5 players and 3 $53 players assuming your values are right. If the player is actually worth $53 he should provide 10-11X as much value as a player who is actually worth $5, if that’s not the case you need to rethink your player valuations. Most of us I think, use our player valuations as a guide rather than as law, we add in little factors that alter the price points of players, risk is a really common and rational one, we consider players riskier for a number of reasons from perceptions of consistency to fear of injury. But we also tend to value players we like a little more than players we don’t like, if I need to go $3 over my valuation point for a player I don’t personally like I probably won’t do it, but if I need to go $3 over my valuation point for my favorite player, I’ll be really angry with myself for letting him go. If everyone had perfect knowledge of a player’s performance, and their player valuations were correct, then all ways of generating $260 of value should be even, leading to a 12 way league tie.
What can’t be accounted for is the type of owners who pays top dollar for Trout. If there’s a breaking point at 65 I would assume those going higher had made up their mind on Trout beforehand. That type of owner is probably more prone to poor decisions.
“You should be able to own Mike Trout at his market value and still win your league,” maybe this was your point, but this is a totally tautological statement that applies to literally every single player. On average, every player should be ownable at their market value. If every player in the league is owned at their market value then you should get a 12-way tie assuming projections are perfect, everyone values players the same way, and nobody leaves money on the table. That breaks down because in reality, none of those assumptions hold up. And they’re even less firm in keeper and Ottoneu leagues where owners ALSO value the future, which is of course, less predictable. What your story illustrates is just that your league mate has come up with a different method for figuring out what Trout’s market value is. If Trouts break even point is $65 then that just indicates that your valuation point for Trout is too high or his valuation point is too low. This is how all fantasy leagues function, the person who is willing to overpay gets the trout. You win your league in spite of overpaying for Trout by underpaying for someone else. Now in this case you have value being assigned on entirely different methods, personally I think your league-mates method is silly, but all it is, is a way of deriving player value that suggests the proper price point for Mike Trout is $65. That’s no different really than if he had a projection that said Trout was worse than your projection, or if one of you was deriving values through Z-scores, and another was deriving values through rate of categorical contributions. The only difference is that the method your league mate is using, is in my opinion, not a very good method.