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:

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.

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:

Here are the following 25:

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:

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.

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:

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:

We can still achieve a 60% of initial AAV – with $43 of total value – by purchasing 2^nd 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:

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 2^nd 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 3^rd or 4^th 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.