skyking162

Your best laid plans only resulted in a middle-of-the-pack finish — respectable, but no Yahoo shower. You managed to dump your overpriced stars for a couple decent keepers. And you’ve survived the winter by dreaming about how stacked your team is going into next year’s auction. Now you have two days to declare your freeze list and two weeks to plan a strategy to finally beat your older brother. So, how do you decide who makes that keeper list?

Obviously, the decision starts with knowing how much each player is worth and comparing that value to his actual salary. The bigger the difference, the better the keeper — ok, there are a couple catches. While a $1 player worth $5 seems like a better deal than a $12 player worth $18 (80% savings versus 50% savings), it’s actually the other way around. What matters is absolute savings, not relative savings. And while a $5 player worth $10 and a $15 worth $20 seem equivalent in absolute savings ($5 each), the second also provides extra salary without inflation (something you won’t find at the auction.) Inflation isn’t just a tool for the auction, it’s a tool for optimizing your keeper list, too.

Let’s start at the end (the beginning is so overrated.) After the auction, every team will have spent $260 in salary and accumulated, on average, $260 worth of talent.* So even though every team has a keeper list with players worth a lot more than their salaries, some of those keeper lists are actually below average — about half or them, unsurprisingly. Why? Because after keeper lists are declared, there’s a lot more money left to spend than value left to buy. Just as everyone saves money with their keepers, they must “waste” money at the auction. That’s the phenomenon known as inflation. In addition to keeping players below value, you want to try to limit the amount of money you’ll be spending at the auction.

Ok, so how do you compute inflation and use it to help choose your keepers? First, you should look through every team and decide on a preliminary group of keepers. You have a simple spreadsheet, right? Just subtract salary from value and choose based on the largest positive difference. (You’ll revise those choices later based on the inflation rate, so don’t do anything rash with the spreadsheet.)

Now comes a little math. Just a little, and assuming you’ve got that spreadsheet handy, there’s no arithmetic for you to do. First, have Excel add up the total value and total salary of the players predicted to be kept. Subtract each number from the total money to be spent by the league. For a ten team league, that would be $2600. That leaves you with the total salary remaining to be spent and the total value remaining to be bought. Finally, divide the salary left by the value left — that’s your league inflation rate. A value of 140%, for example, means that every dollar of value to be bought at the auction will actually cost you $1.40 from your budget. Ouch.

Large inflation rates are the reason why you may want to pass on a $1 keeper in favor of a $30 keeper. The $30 keeper might not be as sweet of a deal, but the $1 keeper forces you to spend an extra $29 dollars on inflated players. ($29 will only buy $21 at 140% inflation.)

Next, determine the relative value of each keeper given your inflation rate. Subtract each player’s salary from $260 and divide by the inflation rate. Add that number to the player’s actual value. That leaves the value of your team if you decided to keep just that one player and spend the rest of your money at the auction. If you then subtract $260 divided by the inflation rate, the difference is how much each keeper helps your team compared to not keeping him. Here’s an example:

Keeping a $10 player at $5 leaves $255 to be spent at 140% inflation resulting in $182 of auction value, for a total of $192. Keeping the $20 player at $15 leaves $245 to be spent at 140% inflation, resulting in $175 of auction value, for a total of $195. $260 spent at 140% inflation leaves a baseline of $186. Therefore the $5/$10 player increase your team’s expected value by $6 and the $15/$20 player increase it by $9. Now, a $3 difference isn’t huge, but the two players in the example aren’t extremely different. And while most keeper choices are obvious, making a few smart decisions can make your team significantly richer overall.

Addition — that complicated calculation simplifies down to: val - sal/inf. A player gets credit for the difference between his value and how much value his salary would buy at the auction.

Ok, so now you know every keeper’s relative value. So what? Well, it will likely turn out that your original best-guess keeper lists for each team were not those teams’ optimal lists. Go back and re-pick each team’s keepers based on your with-inflation calculations. If you’re objecting that changing the keepers changes the inflation rate, you’re right. It’s a nasty cycle (this is the last time I’m going to suggest using a spreadsheet), but unless the inflation rate changes significantly, you don’t need to re-calculate more than twice.

Tada! Now you know who you should keep in order to maximize your team’s value by considering inflation. Of course, you should calculate the true auction inflation rate once you know for sure whom every team is keeping. Auction inflation is a story for another time.

*(Actually, the average is probably a little less than that because not every ownver will agree with your values and will buy some guys worth negative dollars.)

Extra Points

Based on the actual keeper lists, I like to run one last fun calculation to judge the quality of each team’s keepers. I add up the total value of the keepers and add it to how much value a team can expect to buy at the auction, which is their salary remaining divided by the inflation rate. The league average should be $260. Anything higher means the keeper list was a good one. Lower, and that team will need a great auction to have a chance at first place.

I’ve outlined the basic, theoretical process of determining optimal keeper lists, but there are some real world issues to discuss as well.

• Not everyone in your league will attack the issue quite as analytically. You’ll need to have a feel for your league when picking out each team’s expected keeper list. If certain owners like to keep overly expensive studs, mark them a keeper even if your calculations advise that they shouldn’t be kept. If owners in your league stick solely with $1-$5 keepers, take that into account as well. The goal is to best approximate the league’s inflation rate so you can optimize your keepers.
• The differing quality and lack of position requirements for keeper lists makes pre-season trades quite common. If you have a deep keeper list, look to trade two or three for a stud keeper from a team with a shallower list. Even without ripping them you can benefit from being on either side of that deal. (A win-win trade is still lose-lose-lose-lose-lose-lose for the rest of the league.)
• You’re not likely to spend your auction money at full infated value, simply because you don’t value players the same as other owners. Some guys will go for more than your values and some for less, which you’ll grab. Therefore, when estimating inflation, err on the low side.
• Keepers often come with a maximum number of times they can be held over. If two potential keepers have the same value but one has a longer contract, you’ll obviously want to keep that one. But how do you determine the proper trade-off between longer contract and better keeper? The easy (and not so useful answer) is to think about if you really have a chance at winning this year. Don’t be afraid to pass up a year or two of keeper eligibility for the better keeper. You never know what’ll happen down the road.
• What if you have to make a decision about a keeper’s option year versus signing him to a long-term contract? That’s a whole other article for a different day (I plan on writing it, though.) My word of caution is to make sure you get as much value out of a player as possible, even if it’s all focused on the next year or two. A mediocre contract for more years is still mediocre.
• Toppers. Must be non-judgmental… I, um, haven’t used toppers before. Not… my… favorite… rule. If you’re league does use toppers, I really wouldn’t take that into consideration when picking your keepers.

Edit: I added a step in the calculation to compare keeper choices that ends up making the numbers actually mean something intuitive: the change in team value between keeping the player and not keeping the player.

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