The Interaction of Keeper Value and Inflation

This is a topic I probably should have brought up earlier in the draft season when more owners could use the concepts to select their keepers. I’ve decided there’s still a reason to talk about keeper value and inflation as it could inform your trade talks or how you think about the game in general.

A couple of my auction keeper leagues included hefty inflation this year. We’re talking prices over $10 above retail. As I’ve said in previous posts, the best way to handle the craze is to join the fray for a few big names then position yourself to be the king of dollar days. But let’s take a further step back. How should we prepare for rampant inflation before the draft even begins?

There are parts of my thought process we can (and should) debate. I see inflation as a non-linear entity. The supply of -$3 to $3 players greatly outstrips the demand for such assets. For example, not long ago, I picked up Jake Lamb and Danny Valencia after a 350 player draft. It’s possible nobody even thought about drafting them. They’re free fantasy replacement level guys with some upside. They could be core performers, or I may end up cutting them in April.

On the top end of the scale, everybody wants the Mookie Betts and Starling Marte’s of the world. These top players are inflated substantially more than lower quality players. Thus you might get a graph that looks like this:

Inflation

Expected value is listed on the x-axis with prices to be paid on the y-axis. Note, this is a representation of what happens. The numbers are not meant to be precise. The point is that the gap grows larger for particularly good players. We even see this happen in redraft leagues when multiple owners assume they’re better at finding viable scrubs than their rivals.

The implication for keepers is pretty obvious. Be more willing to “overpay” for top talents than run of the mill players. If you have Chris Sale at his expected, pre-inflation price, it’s an easy keep. If you have Josh Reddick at cost, then you can keep or cut based on your whims.

I semi-tested this concept in one draft where I released Adam Eaton, DJ LeMahieu, Joe Panik, and Devon Travis at their inflation adjusted price. Eaton went for $12 – the exact amount I could have kept him at. Panik and Travis were $6, a $2 discount from the keeper price (I re-selected Panik). LeMahieu was $5, a $3 discount. Based on my best estimates, Eaton should have been $10 while the second basemen were valued appropriately.

We should take these so-called findings with a grain of salt. Really, this is just an anecdote from one non-representative league. It supports a theory that smells reasonable and has general acceptance in the industry. It’s not proof of anything.

If we assume non-linear inflation is a real thing, how can we use it to our benefit in trades? Again, this comes out as rather obvious, bundle low cost players for high cost players. That $25-to-keep Puig is more likely to be a value in 2017 than a $7-to-keep Addison Russell. Let’s say those wind up as their expected values in 2017. Russell would be drafted for about $7 while Puig would run closer to the $30 to $33 range. You’d get surplus inflation value from the Cuban.

Of course, there are contradictory forces in play. Even with a breakout, Puig doesn’t stand to gain much value. He’s already a high priced, well-regarded player with his ceiling priced into his current cost. If Russell puts everything together, he could boost his value by $20. In other words, Russell could create a much larger discrepancy between his price and projected production during the 2016 campaign.





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David
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David

Danny Valencia just went for $16 in our auction. Our league has tons of keepers whose price-tag is far lower than their value, so a lot of money was spent on middle-of-the-road talent with upside, especially where multi-positional players were concerned.