Strategy Room: Need, not value should guide keeper league moves

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Many of you are no doubt perusing your favorite news sources in an effort to glean that last nugget of information to assist in preparing your freeze lists and strategies for your keeper leagues. So today, we will discuss some keeper league strategy.

Let us first define keeper league as opposed to a dynasty format. Both involve the ability to protect players from one year to the next. In a true keeper league, there is a significant amount of turnover every spring, replenishing the player pool with talent. Dynasty leagues feature limited, if any turnover. The major difference in terms of how you play is in keeper leagues, you can legitimately get into a compete-rebuild-compete-rebuild cycle, while in a dynasty league, you may need to commit to multiple years of building in order to field a team capable of competing for several years.

While many contend it is best to attempt to compete every year and only rebuild if they absolutely must, it is really dependent upon your league's dynamics if this is possible. The more your league practices an open market, anything goes mentality with no restrictions on dump trading, the harder it is to compete without putting together a strong freeze list. The more restrictions your league has on dump trading, the easier it is to start out competing and only rebuild if the effort appears to be coming up short. For those curious, dump trading refers to the style of deal where one side acquires help for this season while sending help for next season to the other team. The present value is greater for the team contending this season, but the future values favors the rebuilding team. This is analogous to what Cleveland has done with CC Sabathia and Cliff Lee in recent seasons.

While there are no hard and fast rules with respect to constructing a freeze list, there are a few rules of thumb that seem to lead to success.

1. Favor hitters over pitchers. This is not exactly ground-breaking advice; it is quite common. The reason most suggest this is the stability of hitting versus pitching. And while that is well and good, a better reason is that in the majority of keeper leagues, you will find more bargains on the pitching side than the hitting side so it is better to have these roster spots available to be able to take advantage.

2. Do not take too many chances with your freeze list. For every player you freeze, you lose an opportunity to buy someone in your auction or acquire someone at your draft. Taking chances is fine, if not suggested. But it is best to take chances during your draft or auction and not within your freeze list.

3. Do not be afraid to freeze high salaries in auction leagues. This could be the most common mistake made in keeper leagues as some feel they are at an advantage if they have the most money to spend during the auction. As will be explained in a moment, inflation runs rampant in an auction and you end up paying an inflated price for the top talent. So it is not a matter of how much you have to spend, but more how much can you realistically buy with what you have. For example, let us say you are freezing $100 worth of talent for $60. This leaves you $200 for the auction. Chances are you are going to use half of that to buy inflated talent. It is not uncommon for the upper-tier players to be inflated by 30 or 40%. So you may only get back $60 or $70 worth of value. If you break even with your last $100, your team has accrued $260 or $270 worth of value. Another team may freeze $210 worth of talent for $200. If they break even with their remaining $60, they have amassed $270 worth of talent. And to be frank, most keeper leagues have inflation flip to deflation at the end, so you are apt to actually get back a profit on the last $60, and while this is true for both teams, the primary message is depending on the extent of inflation for the best players, it may be more efficient to freeze them and not chase them in the auction.

The concept of inflation was just discussed. For those not familiar, in auction keeper leagues, the frozen players are kept because they are at a price below the expected market value of the upcoming auction. For example, a player valued at $20 for 2010 may be frozen at their 2009 salary of $5. Since we are dealing with a zero-sum economy, this leads to $15 extra available to buy 2010 talent. Extrapolate this over the entire player pool and the available money to buy the available talent far exceeds their total raw value. So in order to not leave money on the table, owners are forced to overspend, or pay inflated prices.

Conventionally, an algebraic formula is used to determine the inflation rate, which is then uniformly applied to raw value of the available players in order to arm the owner with a list of inflation corrected prices. What you do is add up the salaries of the frozen players. Then you add up what their 2010 projected values are. Put those numbers aside for a minute and determine how much overall money there is in your league's economy by multiplying the number of teams by the salary cap per team. By convention, a proper valuation system will distribute exactly this much money over exactly the number of players necessary to fill everyone with a legal roster. This is the zero-sum nature of the game. Now take the amount of the frozen salaries and subtract that from the total amount in the economy. This is how much total money everyone has to spend. Next take the projected value total and subtract that from the total amount. This equals the value of the available talent. In keeper leagues, the amount of available money no doubt is greater than the value of the available talent. You put the available money in the numerator and the value of the available talent in the denominator to determine league inflation. The number will be greater than 1.

As an example, if $2000 is available, to chase $1500 worth of talent, the inflation is 2000/1500 = 1.33 which means there is 33% inflation. You now multiply all the 2010 projected prices by 1.33 to obtain the inflation correction prices. If you want to be more precise, you can break the pools into hitters and pitchers and determine a distinct mark for each and apply it separately.

Now I want to let you in on a dirty little secret. I just took away a couple minutes of your life you will never get back, as the above is an exercise in futility. While it is an elegant idea and mathematically sound, to be completely truthful, in practice, it is useless.

What ends up happening is even more than the inflated adjusted budget gets spent on the top talent. Assuming the player was indeed bought for an over-inflated price, the inflation level has now been reduced. This continues to happen. At some point, the upper echelon talent is exhausted. The level of inflation has likely been reduced drastically. Now the next tier of talent is purchased, usually for the expected inflated value as not many make on-the-fly adjustments. Before you know it, the economy has flipped and it is actually deflated, meaning there is more talent available than there is money to buy it, leading to bargains. This relates to the point above, suggesting it is best to freeze high-priced talent as you can get some profit with what you have left.

So at this point, we have rendered the linearly applied inflation formula useless. As soon as someone playing for next year overpays for trading chips, or someone with an excellent keeper list assumes they can overpay for top talent does so, the uniform application of the inflation rate is moot.

The math gurus in the crowd are probably now coming up with a means to track inflation on the fly. Yes, this can be done with some clever spreadsheet manipulation and is also a feature of several commercially available drafting software. But I say so what, it is still useless. So I have a new inflation index that is calculated after every purchase and applied linearly to the remaining players. We just explained that this number is impractical as the top player will go for greater than the adjusted value.

So now the really, really geeky math gurus in the crowd are formulating a means of mathematically adjusting the inflated values to represent the phenomena just described. Perhaps they are eliminating the purchased and frozen players from the pool along with adjusting the money the league has to spend on what's left, and they re-running the value calculation. Mathematically, this does exactly what we want -- funnels money to the top while leaving the $1, $2 and $3 players as is. Pretty neat. But even the most complex algorithm has no idea how much Joe Blow is willing to spend on Albert Pujols when they are rebuilding. All they want is the best player in the game to trade to acquire prospects or bargain talent. There is not enough visual basic in the universe to know how much someone with a killer freeze list is willing to pay for Hanley Ramirez or Alex Rodriguez. In short, "HAL" cannot account for the human element, only humans can.

My advice is not to get wrapped up determining a correct price in keeper leagues, but rather kick back and go with the flow. If you need a specific commodity or position to get you the stats you need, go get it. Pay more attention to what you are buying than how much. There will be a time that keeper leagues enter into deflation. You just need to make sure you have an ample foundation in place that this additional value puts you over the top.

I have presented this argument to the readers at Mastersball and have been met with some consternation. They want me to develop a fluid pricing program to best reflect the inflation adjusted prices. They agree with the above in principle, but still want the comfort of a transiently adjusted price. And that is just fine. As I ended with last week, Yogi Berra would say this hobby is 90 percent mental and the other half is knowing the players. If you need the security blanket of an adjusted price to nudge you to go even higher, there is nothing wrong with that. So long as you understand that the generated value is not a stop sign, but a reminder that you need to spend to get what you want.

In summary, there is nothing that replaces good old experience when it comes to keeper league dynamics. Others will suggest to be guided by a list of mathematically inflated values. Take advantage of that. After the initial spending frenzy subsides, go the extra buck knowing the rest of your opponents will see the octagonal red sign around their value and stop. Get a few of the top remaining players. Then relax while everyone else realizes they have a ton of money to spend on mediocre talent, pushing the inflation to deflation, where you jump back in, scooping up the bargains to fill out your championship roster. If you need your adjusted price list binky to help guide you, that is fine. But don't get married to the prices and instead trust your instinct and eventually your experience to lead the way.