Detailed outline to auction drafting 

The last time we were together I promised a detailed outline of how I approach an auction. As you’ll see, it is more of an approach than a strategy. It’s designed so you can implement any desired micro-strategy within the confines of this infrastructure.

In words, the objective in an auction is to purchase as much intrinsic talent as you can at a price below market rate. The word intrinsic was chosen specifically to connote players are worth different amounts to different people based on their specific strategy and team construct. The bid price you assign a player not only depends on the projected production but also the role and contributions the player will make to your team design.

Another latent key to this objective lies in “as much possible.” On the surface it goes without saying you want to purchase as much talent as possible but the unspoken caveat is “and also spend all of your money.” This is going to be the crux of Part 3 of this auction trilogy; the means to buy as much talent as possible while also being sure to spend your entire budget.

Before we delve into the nuts and bolts of the process, let’s review some basic auction dynamics. Everyone has $260 to spend, or whatever your league uses as a budget. If you take the final standings of most leagues and convert rotisserie points to budget dollars, you’ll observe most league champions have between $320 and $360 worth of points. That means winners get a return on their initial $260 investment between 23 and 38 percent. Keep that in mind as it’s going to be very relevant in a bit.

Getting a return on investment 

Here are several paths to realize this return on your investment. Players can perform better than expected. You can replace underperforming players with better ones. Depending on your league’s transaction rules, you can maneuver reserve players on and off your roster to maximize production. And perhaps most importantly, you can purchase players whose price you paid for their intrinsic value is less than what they are truly worth. That is, you can leave an auction with more than $260 worth of potential. It isn’t value until the season is over; right now it’s still potential. Check back with me in October and we can talk value.

Now let’s fold this thought into some of the results presented last week. Recall not a single player was purchased for $35 or more that I had rated as even a break-even purchase. With the obvious disclaimer that the comparison is to my numbers and the person that bought the player may have a more optimistic expectation, but based on my ranking every player purchased for $35 or more was a bad buy.

OK, maybe a couple of the players in this class were purchased at or below the expected production of that owner. But let’s be real - the majority were not. Most (I’ll make a gentleman’s wager that all) of the purchases were made knowingly above projected value…I mean potential.

I’m gonna be honest gang, I don’t get that. I just don’t understanding consciously paying more than what you feel a player is going to be worth. But I promise you, it has happened in every auction conducted this far in the history of fantasy baseball and it will continue to be a part of every auction in the future.

I know the reasons. Well, I know the rationalizations. I can always make up for it at the end with bargains. I like to get a solid foundation of stats from which to build. I’d rather overspend on a star than chase a scrub just because I have money.

I don’t care how you spin it. Overspending is overspending is overspending. Period. End of story.

Why use the end game to make up for a loss? Why not build upon more gains? A foundation is nice, but if it costs more than it’s worth, why bother? And finally, who says you have to overspend on anyone? If you manage your money correctly, you won’t have to chase anyone.

Overspending is overspending is overspending.

Let’s look at this in terms of return on investment. To win, you need to realize an ROI of 23-38 percent. If you spend $50 on a player that at best will provide $45 when all is said and done, you know have to generate the remaining $275-$315 worth or value from $210! In other words, you need between 31 and a whopping 50 percent ROI! Are you serious? Do you really think you’re THAT good? When you spend $50 on Mike Trout that’s EXACTLY what you’re saying. You’re saying not only can you make up for the net loss Trout provides, but you can also add an additional $60-$100 worth of points from the $210 left after purchasing Trout.

Good luck with that.

The above calculations are not perfectly accurate as the difference between standings places is not linear and you get one point regardless of how many stats you accrue in the category. But the larger point remains. If you overspend, you are putting yourself in a hole. Not only do you need to make up the loss, you lose the opportunity for that portion of your budget to offer a positive ROI.

Maybe the real question is who do I think I am? I’m an arrogant sunuvabitch that wants to realize a positive ROI on my entire $260. Here’s how I go about accomplishing it.

The easy part is to preach not to overspend on anyone. The hard part is having the discipline to heed to that. Making the hard part easier is the technique of slot drafting in conjunction with pricing tiers.

I’ll enter every auction with a piece of paper with a line corresponding to each roster spot. On each line is the amount I plan to spend with the total of all the lines equaling my entire budget. Sticking with the 15-team data discussed last week yields 23 lines totaling $260.

I’ll talk more about how I set the lines in a moment but before you run off to watch the NCAA Tourney, I want to make sure you’re still here for the following. Keeping in mind it is obligatory to spend all $260, as soon as you realize you will not be purchasing a player at a particular line, you turn that line into a lower one and add the difference to one or more other lines.

As an example, let’s say I have a $35 line and there are no players left I price for at least $35 but there’s still some $30-$35 on the board. I’ll make that line $30 and add $5 elsewhere. If I don’t purchase any of these players, I’ll drop it to $25 and again add the extra $5 elsewhere. By tracking what’s left in the pool versus what I have remaining for lines, I know where I have to begin buying lest I leave money on the table. I never want to get to the point I have more money assigned to lines than there are commensurate players available.

More art than science

Admittedly, recognizing the point of no return is as much finesse and art as it is numbers and science. There will be a time where it’s necessary to at minimum buy some players at value. You may not get a positive ROI, but at least you’re not creating a deficit. Plus, if you overspend on a lesser player, that leaves more of your budget to compensate.

As an example, I decide the only way I can possibly spend all my money is to pay $20 for a $15 player. I’m in the same $5 hole as the person that purchased Trout, but I still have $240 to get the necessary $320-$360 by season’s end as compared to the Trout owner who only has $210, though they do have a $45 Trout in the bank while I only have a $15 player.

Of course the ultimate goal is not to overspend on anyone, but even arrogant SOBs make mistakes now and again. Now let’s discuss how I go about setting my lines using the 15-team data from Part 2 as the basis.

If no one in any of the three leagues studied valued at $35 or more when at or below that amount, there’s no sense in my setting a line at $35 or above so my initial line will be $30. There’s a small chance I fill it but I want to be prepared in the event the situation presents itself.

There were some players I price between $25 and $29 that went under cost so I want to have at least one $25 line. I have a strong suspicion the $30 line will become a $25 so I’ll stick with just one.

There were a few bargains to be had from $20 to $24 so I’ll dedicate two $20 lines in the hopes it happens again.

So far I have four lines: $30, $25, $20 and $20 for a total of $95.

Figuring I’m going to need to spend some serious money to make sure I exhaust it all, I’ll put four lines at $15 and six more at $10. I now have 14 players accounted for totaling $215. That leaves 9 for $45 or $5 apiece.

What ultimately happens is I’ll put a player on a line or two for more than is slotted. I’m not saying I’m overpaying. What happens is I’ll have a $10 line as the maximum but a player I have priced at $17 has halted at $12. I’ll bid $13 and if I win, I’ll put him on the $10 line and change a $5 line to $2. So by the end-game, I have almost always borrowed from several $5 lines to secure good buys elsewhere.

Tactics are common, execution is critical

I’m not the only person employing this tactic; it is quite common. Others go so far as assigning a position to each line. I don’t like to do that for all 23 lines, but I will do it for a select few that match up nicely with ranking tiers or a strategy I want to deploy.

For instance, there is a solid and stable tier of shortstops that includes J.J. Hardy, Erick Aybar, Asdrubal Cabrera and Alexei Ramirez. In a 15-team league, I should be able to get one for about $10 so I’ll pencil a $10 line in for a shortstop and avoid buying one elsewhere unless the price is too good to pass up. I can still buy the $10 shortstop and use him in the middle.

Another instance where I’ll preset lines is for my staff anchor and closer(s). If I decide I want to anchor my staff with someone like Cliff Lee, Yu Darvish, Chris Sale, Felix Hernandez or Max Scherzer, I’ll dedicate a $25 line to my staff ace. If I want to secure an upper-level closer like Craig Kimbrel, Kenley Jansen, Aroldis Chapman or Greg Holland, one of the $20 lines will be reserved for that purpose. If I end up putting two hitters on the pair of $20 lines but I still want a closer, I’ll take a $15 line and make it $20, borrowing $5 from other places (remember, I have 9 lines at $5 to take from).

The only other preset factor to the lines is the hitting to pitching split I anticipate using. Again, these amounts aren’t set in stone and I have no reservations about funneling hitting budget to pitching and vice versa. It’s all about flexibility and maximizing assets.

Gather aound everyone as I’m going to let you in on a little secret which was actually more of an epiphany on my part. Prior to finally realizing this, I’m sure it just naturally happened during my more successful auctions while I know for sure it contributed to many, if not the majority of my disappointing auction squads. There will come a time in almost every auction where a buy in a vacuum is a good one, yet by winning the player it handcuffs you going forward. Garnering a $17 player for $11 is a great purchase, but not if it takes you out of the running for that finally flurry of bargains that inevitably occurs on the $5-$9 subset. That $6 profit can literally deprive you of $20 or more profit in the end-game. It takes discipline but you have to know when to walk away. Fortunately, the slotting system helps this as well since you’ll be reminded how much the return in investment can be if you have the bottom lines over a buck. It doesn’t seem like much, but that extra buck or two in the end game can be the difference between, getting Dan Straily and Drew Poweranz.

Finally, we’ll wrap up this discussion as well as the trilogy by circling back to a point at the beginning. Auction slotting is not a strategy unto itself. It’s more of a technique or process. You can use it to guide any strategy. Do you want to draft SMART? Employ the LIMA Plan? Dump saves? Punt batting average? It doesn’t matter. Auction slot drafting can umbrella all of them.

 




Comments

Rob Johnson 

Over spending early leads to other teams getting bargains on next tier players,especially in larger leagues You don't have money to push the price up once you over spend early

Sfav 

How can you determine/estimate how much value a player will earn? Specifically in a points league?

ToddZ 

nice catch - I'll make the adjustments

RS 

"If you spend $50 on a player that at best will provide $45 when all is said and done, you know (sic) have to generate the necessary $320-$360 worth or value from $210!" Todd, this should read "...you now have to generate the REMAINING $275-$315 from your remaining $210". You may have overspent on Trout but you didnt buy nothing.


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About Todd Zola

Affectionately known as Lord Zola, Todd was the 2013 Fantasy Sports Writers Association recipient of the Fantasy Baseball Article of the Year, Web. He's been with Mastersball since its inception in 1997 and presently Todd writes for the ESPN Insider and Baseball HQ. Todd is a frequent guest on SiriusXM and is a regular on HQ Radio. He's a veteran of Tout Wars and LABR as well as a multi-time NFBC champion. Follow Todd on Twitter @ToddZola

Todd Zola on Twitter

It's not value - it's potential.

@ajB_real Try using the link on the top menu bar -- that is the best gateway (I have no control over either ) http://t.co/beevgokYio

@ajB_real Sorry -- no idea what you're referring to. ESPN's note's have been up all morning

In case you missed any of Sunday's MLB action, @FantasyAlarm is here for you --- Box Score Blitz From August 31 http://t.co/geMCvAbDri

OK, let me get this straight -- my browser is slow because we're able to see free boobies on the Internet?