Last Player Picked

Brilliant observation, huh? People pay more money for good players than bad ones. How long did it take me to realize that? Actually, that’s not what I’m talking about here.

It’s clear that people pay more for top-tier players than for lesser players. However, it’s not immediately obvious why the Price Guide tends to understate what people tend to pay for the top-tier players. Why do people spend more for top players than what the Price Guide recommends?

As quick as I am to defend the Price Guide’s methodology, this is one case where I think people’s behavior might be more accurate. I don’t think my methodology is flawed, I just think it’s leaving out a couple of factors that come in to play in a draft:

Sleeper Mentality
Fantasy players tend to pay less for low-end “consistency picks,” and instead target late-round high-risk/reward sleepers. By targeting sleepers late, they are able to spend more money early.

So instead of spending $6 on a veteran platoon-OF or a journeyman SP, most teams will go after a rookie player valued at -$2, knowing that he has the potential to beat that projection. If he doesn’t, that’s OK, because there’s no problem with dropping him when someone better comes along during the season.

Divergent Opinions
Fantasy players tend to have more divergent opinions about late round players, which means these players go cheaper. Guys that the Price Guide projects for $6 will often go for $2-3, because there will be some owners who have them ranked below replacement level.

The top-tier guys are more predictable–everyone has a very similar ranking for the top ten players. Owners will take their savings from the late-round players and spend the money at the top instead.

Open Positions
Related to that, owners may be willing to spend money on late-round guys, but can’t because they have already filled a certain position. Compare that to the first few bids, when every team has money and open positions. The opening bids are also where the top-tier players are usually brought up.

Add all of those factors up, and I think it enough to maybe skew the values to give an extra 10-15% to the top players. And while that may work as a rule of thumb, I’d really like to be able to quantify some of these factors into the Price Guide.

A long-standing rule of thumb for fantasy baseball auctions is that a team should optimally spend 70% of their money on hitters and the remaining 30% on pitchers.

Actually, it’s not always described as a 70/30 split. Some people think it’s closer to 67/33, some say 65/35. But I think everyone recognizes the line is somewhere around there.

Let’s examine this rule with regard to the Price Guide:

When the Price Guide assigns dollar values, it does so without respect to whether a player is a hitter or a pitcher. There is no set allocation between hitters and pitchers. All it does is look at the player’s value as a percentage of the total amount of value among all drafted players, and assigns that player the same percentage of the total draft dollars. It doesn’t matter if that player is a hitter or a pitcher.

So, using a method that doesn’t differentiate between hitters and pitchers, what does the split end up being? Fortunately, when the Price Guide displays its dollar values, it also displays how the money was distributed between hitters and pitchers. Based on the 2008 final stats, it will come up with these splits for standard rotisserie leagues:

Mixed rotisserie: 70/30
AL-only rotisserie: 72/28
NL-only rotisserie: 72/28

That looks to me like it passes the smell test. And remember, we arrived at those numbers without considering any of the other explanations for the 70/30 split (pitcher riskiness or anything else). We just distributed the dollars evenly to all players, and the numbers fall perfectly in line with what fantasy players expect.

ESPN and Yahoo
Now notice how the split ends up for 2008 Yahoo and ESPN default leagues:

Yahoo: 64/36
ESPN: 64/36

The Price Guide recommends spending more on pitchers in these leagues. Why is that? The main factor is that these leagues draft fewer hitters than a traditional rotisserie league. Whereas the traditional league drafts 1.56 hitters for every pitcher (14/9), Yahoo takes only 1.29 hitters per pitcher and ESPN 1.22. If there are relatively fewer hitters taken, it makes sense that more money should be spent on pitchers.

So keep this in mind if your fantasy auction is more like an ESPN or Yahoo league: It’s OK to allocate more money to pitchers than usual. The Price Guide should point you towards the optimal amount.

Projections
The numbers above are all based on the final stats for 2008. But for 2009, we’re more interested in what the split is for the projections. Let’s see what these splits look like with the CHONE projections:

Mixed rotisserie: 66/34
AL-only rotisserie: 65/35
NL-only rotisserie: 68/32
Yahoo: 61/39
ESPN: 60/40

Across the board, the Price Guide suggests allocating more money to pitchers. About 4% of draft dollars shifts from hitting to pitching on average.

Now this, I think, is a little surprising. Pitchers are supposed to be unpredictable, which traditionally means that you should spend less on them. But the projections factor in the risk associated with pitchers, and the Price Guide suggests that you should spend even more on them.

Here’s what I think is happening: Pitchers as a whole are less predictable, and the unpredictability leads to the pitchers being projected more conservatively than hitters.

But that is not true for all pitchers. There are a few who have consistently shown themselves to be very good. As we become less confident in their peers, these pitchers become more valuable, because we are more certain of what they can give us.

So using projections, the Price Guide recommends that you take about 4% of what hitters will earn, and instead allocate it to the top-tier pitchers. That’s not a big shift–only about $9 per team. And it isn’t spread across all pitchers, just the top 15 or so (Santana, Sabathia, Peavy, Haren, Kazmir, etc.).

Notice that the average rotisserie league split from the Price Guide is now 66/34, which is still in the ballpark of 70/30. Just keep in mind that the split for your league can vary from that quite a bit. If you are interested in what the split is for your league, just try it out on the Price Guide.