The Case for an Ace

You should buy an ace.

The fantasy landscape has changed dramatically over the past few years. Just a half decade ago, a mid-$20s bid at a mixed league auction would buy you a top pitcher. $30 was unheard of … for any pitcher. A non-hitter in the first round was blasphemous. Pitching was thought of to be too volatile, and far too risky to roster at such a considerable cost.

I personally bought into this notion. At auctions, I used to purchase two $19 SPs … the not-your-ace 1A pitchers. I had the fortune of winning my fantasy leagues using the “spread the risk” roster construct for pitching.

That was fine then … but in a few short years, everything has changed.

Listed above are the top five pitchers selected (with amounts) in each of the last seven years at the Tout Wars Mixed Auction League. [I am honored to be a new participant in Tout Wars for 2019 – in the Tout Draft & Hold League!]

What a dramatic change. In 2012, the average auction spend of the top five pitchers was $26, and just this past year, it spiked to $39. To buy an ace, you now need to pay $13 more than you did in 2012. That’s a 50% increase! Gone are the days of the 70/30 Hitting/Pitching splits.

Normally, when everyone is zigging … it is my tendency to zag. When elite starting pitching costs almost as much as the top hitters, I would normally see this as an opportunity not to fall in a “market trap” and to steer clear of what seemingly is a poor use of assets at the draft/auction table.

However, as the title and first line of this article indicates, I would like to state the case that you should buy an ace.

In an auction, this entails allocating your pitching dollars towards an elite arm. In a draft, it means grabbing the cream of the crop earlier than you normally would – and perhaps in the first round.

In this article, we will take a look at what would have happened last year if you had bought an ace. Further, we will look to calculate the optimal price points to purchase pitching, by maximizing profitability.

Definitions:

A few definitions to help us:

  • Annual Auction Value (AAV) – The average of the auction values from last year’s NFBC online auction season. This in effect is what it would have cost to roster a player in 2018.
  • 2018 – The final full season returned value in an NFBC contest. Using my personal Z-Score based auction calculator, this will give us what each player was worth to roster all season long.
  • % of Value – This represents the percent of original cost that the player held. It is the 2018 values divided by the AAV.
  • Verdict – We will classify 2018 player results into five categories:
    • Gain – Profitable players. Players who returned more value than their initial price point.
    • Par – Players who roughly earned what was paid for them.
    • Most – Players who returned 50%+ of their original price.
    • Some – Players who retuned at least a quarter of their original value.
    • Bust – Players who returned little to no value, or even negative value.

Note: The 2018 values have been capped at a loss of -$2 per player. Players with negative values are below replacement and are not worth rostering. These players should effectively be cut from rosters before returning negative value. For this study, we will let players earn a slight negative value (-$2), but not more.

On average, starting pitchers in 2018 retained only about 40% of their initial value. I let the Z-Score method fully dictate the Hitter-Pitcher split of the auction dollars in this analysis. [Had I given more weight to pitchers in my valuation, the 40% figure would have been higher – but it shouldn’t matter for determining player profit relativities.]

With injuries, valuable undrafted players, rookies who came up mid-season, etc. – There were many players having a zero AAV (not drafted) yet had a positive season-long value. In this 2018 environment, if you simply returned 50% of a drafted value – you did well comparatively.

Profitability:

Let’s take a look at the profitability of rostering one of 2018’s “Big 4” starting pitchers:

2018 Profitability – Top 4 Starting Pitchers
No Player AAV 2018 % of Value Verdict
1 Clayton Kershaw 42 14 33% Some
2 Max Scherzer 41 38 91% Par
3 Corey Kluber 40 27 66% Most
4 Chris Sale 39 32 80% Par
Total 163 110 67%
Average 41 27 67%

On average, the top four pitchers in 2018, as ranked by AAV, held most of their value. No pitcher was a bust. Scherzer and Sale’s return was outstanding. Kluber’s return was perfectly acceptable for his cost. Kershaw’s return was adequate.

Kershaw’s lowish returned value was due to missed time, not because of poor quality of play. He was immensely valuable on a per start basis. During his absence, fantasy players had the opportunity to play a replacement level player.

The verdict with this unprecedentedly expensive group of four pitchers – is that they returned excellent value, and were worth their extravagant cost.

Looking at the next group of “aces,” we see another batch of very effective returns.

2018 Profitability – 2nd Tier Aces
No Player AAV 2018 % of Value Verdict
5 Madison Bumgarner 33 -1 -3% Bust
6 Stephen Strasburg 33 3 9% Bust
7 Noah Syndergaard 30 7 25% Some
8 Carlos Carrasco 29 14 47% Some
9 Jacob deGrom 29 39 133% Gain
10 Luis Severino 28 14 48% Some
11 Justin Verlander 27 36 134% Gain
12 Zack Greinke 25 15 57% Most
Total 235 126 54%
Average 29 16 54%

The first two pitchers in this pack (Bumgarner and Strasburg) were busts. Syndergaard wasn’t a fantastic buy, but he still held some value. It was the latter half of this group (which included deGrom and Verlander) that made this collection of lower-tiered aces worthwhile.

All in all, looking at the 2018 “Aces” as deemed by the twelve highest auction values:

Half of the “Aces” returned at least 50% of their value.  Only 17% of the top dozen were total busts.

Below are the next 20 starting pitchers:

2018 Profitability – Starting Pitchers 13 to 32
No Player AAV 2018 % of Value Verdict
13 Yu Darvish 25 -2 -8% Bust
14 Robbie Ray 25 -2 -8% Bust
15 Chris Archer 24 -2 -8% Bust
16 Carlos Martinez 24 1 2% Bust
17 Aaron Nola 23 31 130% Gain
18 Jose Quintana 21 -2 -9% Bust
19 Dallas Keuchel 20 -2 -10% Bust
20 Gerrit Cole 19 24 124% Gain
21 James Paxton 18 8 45% Some
22 Luis Castillo 17 -2 -11% Bust
23 Shohei Ohtani 17 1 5% Bust
24 Masahiro Tanaka 16 5 33% Some
25 David Price 15 9 58% Most
26 Jake Arrieta 15 -2 -13% Bust
27 Jose Berrios 14 4 31% Some
28 Kyle Hendricks 14 7 47% Some
29 Jon Lester 14 2 18% Bust
30 Luke Weaver 14 -2 -14% Bust
31 Rich Hill 14 6 45% Some
32 Alex Wood 13 0 0% Bust
Total 364 81 22%
Average 18 4 22%

Here are the following 25:

2018 Profitability – Starting Pitchers 33 to 57
No Player AAV 2018 % of Value Verdict
33 Zack Godley 13 -2 -16% Bust
34 Trevor Bauer 12 22 181% Gain
35 Sonny Gray 12 -2 -17% Bust
36 Jeff Samardzija 11 -2 -18% Bust
37 Johnny Cueto 10 0 -3% Bust
38 Jon Gray 10 -2 -19% Bust
39 Marcus Stroman 10 -2 -20% Bust
40 Lance McCullers 9 3 27% Some
41 Danny Duffy 9 -2 -23% Bust
42 Garrett Richards 9 -2 -23% Bust
43 Danny Salazar 8 -2 -25% Bust
44 Jameson Taillon 8 8 105% Par
45 Gio Gonzalez 8 -2 -26% Bust
46 Kenta Maeda 7 0 -1% Bust
47 Taijuan Walker 7 -2 -27% Bust
48 Aaron Sanchez 7 -2 -28% Bust
49 Chase Anderson 7 -2 -28% Bust
50 Dylan Bundy 7 -2 -28% Bust
51 Blake Snell 7 35 496% Gain
52 Charlie Morton 7 12 176% Gain
53 Kevin Gausman 7 -2 -30% Bust
54 Dinelson Lamet 7 -2 -30% Bust
55 Michael Fulmer 6 -2 -32% Bust
56 Drew Pomeranz 5 -2 -40% Bust
57 Alexander Cobb 5 -2 -42% Bust
Total 208 43 21%
Average 8 2 21%

What is noteworthy, is that results are poor for the entire stretch of pitching from $5 to $25. On average, players hold only ~20% of their initial value. Looking at the verdict distribution:

Only 5 out of 45 players in these two stretches combined were profitable (Nola, Cole, Bauer, Snell, Morton). Only 16% of all players even held half of their full-season value. 71% of the players were busts. They likely warranted to be replaced mid-season by a replacement level player.

Finally, below are the final 30+ players who were bought for at least a ~$1 AAV in 2018:

2018 Profitability – Starting Pitchers 58 to 90
No Player AAV 2018 % of Value Verdict
58 Michael Wacha 5 1 31% Some
59 Cole Hamels 4 -2 -45% Bust
60 Mike Clevinger 4 12 277% Gain
61 Patrick Corbin 4 17 395% Gain
62 Julio Teheran 4 -1 -24% Bust
63 Rick Porcello 4 2 44% Some
64 Sean Manaea 4 6 158% Gain
65 Ervin Santana 4 -2 -53% Bust
66 Jacob Faria 4 -2 -54% Bust
67 Lance Lynn 4 -2 -55% Bust
68 Jordan Montgomery 3 -2 -58% Bust
69 Tanner Roark 3 -2 -60% Bust
70 Lucas Giolito 3 -2 -60% Bust
71 J.A. Happ 3 10 312% Gain
72 Tyler Chatwood 3 -2 -65% Bust
73 Jake Odorizzi 3 -2 -68% Bust
74 Bradley Peacock 3 2 57% Most
75 Alex Reyes 3 -2 -71% Bust
76 Felix Hernandez 3 -2 -75% Bust
77 Brent Honeywell 3 -2 -78% Bust
78 Luiz Gohara 2 -2 -80% Bust
79 Miles Mikolas 2 18 785% Gain
80 Eduardo Rodriguez 2 2 97% Par
81 Marco Estrada 2 -2 -123% Bust
82 Steven Matz 1 -2 -140% Bust
83 Jimmy Nelson 1 -2 -153% Bust
84 Matt Harvey 1 -2 -169% Bust
85 Hyun-Jin Ryu 1 11 1045% Gain
86 German Marquez 1 4 515% Gain
87 Vincent Velasquez 1 -2 -230% Bust
88 Zach Davies 1 -2 -247% Bust
89 Matt Shoemaker 1 -2 -247% Bust
90 Mike Leake 1 -2 -322% Bust
Total 87 41 46%
Average 3 1 46%

Since the final group of players were purchased on the low end, we should have expected a large amount of turnover throughout the season. In this stretch, indeed there were a number of diamonds in the rough such as Clevinger, Corbin, Happ, Mikolas, Ryu, etc. These were highly profitable players on a per dollar spent basis – and allowed the group as a whole to retain about half of its value (46%).

This isn’t a revolutionary concept – that the $1-3 players are relatively good purchases. What is interesting is their comparison in verdict frequency to the two other tiers above:

27% percent of players at the low end retained most of their value, with 21% profiting. That’s roughly twice the chance of each of the previous two cohorts.

Optimization:

Now that we have an idea of the profitability at various price points for starting pitching, let’s use that information to optimize the spend.

2018 Profitability – Starting Pitcher Groups
SP Group AAV 2018 % of Value
Top 4 41 27 67.4%
5 to 12 29 16 53.7%
13 to 32 18 4 22.4%
33 to 57 8 2 20.8%
58 to 90 3 1 46.4%
Average 12 4 38.0%

The average starting pitcher was purchased for $12 in 2018. We will assume that each fantasy team buys exactly six starting pitchers – for a total of $72. With the given constraints, let’s now maximize our returned value:

2018 Profitability Optimization – Starting Pitchers
SP Group AAV 2018 Num Players Cost Value % of Value
Top 4 41 27 1.5 60 40
5 to 12 29 16 0.0 0 0
13 to 32 18 4 0.0 0 0
33 to 57 8 2 0.0 0 0
58 to 90 3 1 4.5 12 6
Total 6.0 72 46 63.9%
$72 to optimize, subject to max 6 players selected.

Using a solver tool, we can easily deduce that the best way to maximize value is to employ a complete “stars & scrubs” scheme – to select one or two aces from the top 4. In doing so, that mechanism would have provided us with $46 of value, equating to 64% of initial AAV. [Remember, the average was only about 40%!]

Below is the same optimization exercise, with the caveat of holding teams to a maximum of one elite SP:

2018 Profitability Optimization – Starting Pitchers
SP Group AAV 2018 Num Players Cost Value % of Value
Top 4 41 27 1.0 41 27
5 to 12 29 16 0.7 20 11
13 to 32 18 4 0.0 0 0
33 to 57 8 2 0.0 0 0
58 to 90 3 1 4.3 11 5
Total 6.0 72 43 60.3%
$72 to optimize, subject to max 6 players selected. Max 1 Top 4 SP.

We can still achieve a 60% of initial AAV – with $43 of total value – by purchasing 2nd tier aces two-thirds of the time, on average.

Finally, below is the optimization exercise one last time assuming that we cannot purchase an elite ace:

2018 Profitability Optimization – Starting Pitchers
SP Group AAV 2018 Num Players Cost Value % of Value
Top 4 41 27 0.0 0 0
5 to 12 29 16 2.1 62 33
13 to 32 18 4 0.0 0 0
33 to 57 8 2 0.0 0 0
58 to 90 3 1 3.9 10 5
Total 6.0 72 38 52.6%
$72 to optimize, subject to max 6 players selected. Top 4 SP may not be selected.

We exhibit a large drop-off in this scenario – with only a 53% Value to AAV ratio. It is still decent, but less optimal. The algorithm prescribes us to purchase two 2nd tier aces here, along with four low valued players.

Conclusion:

Obviously, if the ace that you selected in 2018 was Madison Bumgarner, your team started in a large hole. On the other side – if you selected Trevor Bauer, you certainly had a fantastic edge on the competition. But in general – you would have been wise in 2018 to acquire elite arms when possible.

It is not a guarantee that doing so once again in 2019 will provide the optimal use of one’s assets. At the same token, passing over the chance to grab an elite batter (in favor of an elite arm) may not fully work out either.

Certainly, if you have your favorite 3rd or 4th tiered pitcher, or mid-round sleeper to target in 2019 … go for it! You may have good reason to believe that a particular mid-level arm is undervalued and will break out.

But playing the percentages has historically indicated to us that the optimal way to allocate your starting pitching budget is to align yourself close to a “stars and scrubs” methodology. We aren’t all smart enough to know who will break out; sometimes it is best to play the numbers. Optimize your starting pitching spend by purchasing one or even two elite ace starters.

To reference a Ron Shandler strategy – He would refer to this approach as ZIMA. In the 2019 FSTA draft, Ron [out of character] used his first-round selection to draft Jacob deGrom.

The trend of the overall pitching vs hitting spend has been increasing every season. As seen above, owners are spending more and more on a top 5 starter. The key is that the riskiness of a front-line starter is now no greater than that of a superstar hitter. With fewer 200 IP / 200 K pitchers these days, the top pitchers are indeed superstars, and may be treated just as the hitters would.

It seems to be the case, that the best course of action in 2019 may be to zig when everyone else is zigging.

This has been my case for an ace.

We hoped you liked reading The Case for an Ace by Ariel Cohen!

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Ariel was a finalist for two 2018 FSWA Awards - Baseball Article of the Year, and Baseball Writer of the Year. Ariel is the creator of the ATC (Average Total Cost) Projection System. Ariel and his fantasy partner, Reuven Guy, have used the ATC system projections to finish in the money in several NFBC, RTSports, Doubt Wars and other national leagues, racking up several division titles. Ariel is a member of the inaugural Tout Wars Drat & Hold League. Ariel Cohen is a fellow of the Casualty Actuarial Society (CAS) and the Society of Actuaries (SOA). He is a Vice President of Risk Management for a large international insurance and reinsurance company. Follow Ariel on Twitter at @ATCNY.

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cb001dplsAriel CohenWerthlessJay Deecavebird Recent comment authors
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hebrew
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hebrew

ok so i know this isn’t the right place, but I have to ask …. what is it about Brandon Nimmo that has ATC so excited? His projection from you is off the charts!!!

also, the premise of this article is spot-on. Especially in H2H leagues, everyone seems to forget that pitching stats count just as much as hitting stats. I’ve made a living choosing elite SPs at the tops of my drafts while everyone else reaches for hitters.