On Paying 80
On Paying 80% of
by David Luciani
Published February 27, 2002
One of the more common
areas of confusion from subscribers who use our interactive ranking forms is in
relation to the little note at the top of the sheet, which reminds readers that
they should assemble a roster worth 75-80% of salary, if they are to win their
fantasy league. Without a doubt, most readers wonder how they can get an
Alex Rodriguez or a Randy Johnson for 80% of projected value.
Well, the answer is: You
probably can't get those guys. Let me also emphasize that it certainly is
not my recommendation that you bid at least 75% of value. In some
leagues, such as 5X5 NL only leagues, we project Randy Johnson to be worth $57
or more. Now of course, even 75% of $57 is $42-$43 and in a good majority
of leagues such a high bid is unnecessary. You can probably get Johnson
for 65-70% of his projected value in those leagues and that opens up flexibility
for other players on your roster.
In fantasy leagues, you are
either in a "keeper" league or in a straight auction league.
Draft leagues, of course, don't care about auction price as they can just take
the best available remaining player as the draft cycles through. In this
column, I will focus on the keeper leagues and will then return to the topic of
newly forming leagues in a future essay.
In a previous column in
this space, I discussed an approach to making a good keeper list. I spent
a good deal of time there emphasizing the idea of ROI or "Return On
Investment." As you will see here, there was a good reason for that
as it naturally leads into this essay.
You see, in a keeper
league, the better your keeper list, the more you can afford to overpay for a
player. The point I wish to emphasize about the so-called 80% rule is that
you want to pay no more than 75-80% of the actual value of your team.
The reasoning, quite simply, is that if you pay what players are worth, on
average, you will have an average team, ultimately destined to finish in the
middle of the pack. The last place teams will be made up of rosters for
which the owners overpaid for players, sometimes even slightly, and the top
teams will be made up of rosters with slightly underpriced players, usually
around a salary of 75-80% of their ultimate value.
This is not to say that
each and every player should be purchased at 75-80% of value. If, for
example, you have one or two dramatically underpriced players (Kelvim Escobar is
proving to be one such player in most AL leagues this winter), compared to their
projected value, you can then afford to pay more. In fact, it is no secret
in actual Rotisserie leagues that I play in that instead of a laptop computer,
which a few have been known to bring, I simply bring a calculator and a scribble
pad, in addition to my notes. I'll explain what I'm doing and you can do
the same, if you practice a bit in advance.
Let's say that your keeper
list has $140 in projected value and it cost you just $85 to retain the players
you're keeping. In some leagues, it is not uncommon to see such a good
keeper list and I have occasionally had super keeper lists which were better
than that, especially in leagues where I deliberately forego success in a single
season for the express purpose of building a long-term superteam that lasts the
subsequent few years or so.
Well, if our goal is to
pay 78% of value (and readers probably know that this is the number I actually
prefer to settle at between 75-80%) that means that I want to assemble a squad
worth $333 and I want to pay just $260 to do it. In our example, going
into the draft, I already have $140 in projected value meaning that I need just
$193 in value at this point (i.e. $333 goal - $130 already on my roster = $193
left to acquire). I have spent $85 of my $260 so I still have $175 left
with which to purchase players.
I have $175 with which to
buy $193 in value. That means that I can now afford to bid 91% of the
projected price for the remaining players, not 78%. Indeed, if I pay 91%
of player value the rest of the way, my roster will achieve exactly a 78%
underprice. If I get a few bargains in there, I am constantly adjusting
the price. So let's return to Randy Johnson. Let's say that the
owner of Johnson threw him back into the pool rather than retain him for $46.
We now know that at least this particular owner is unlikely, at best, to pay
more than $46 for Johnson because if he thought he was worth that much, he would
have simply kept him at that price. At this point, I usually look back
over the recent history of the league to see what the top player sold for.
Most leagues, especially the smaller ones, rarely will see a player go for $50
unless the salary scale is higher.
For argument's sake, let's
say we correctly decide that no one will bid more than $50 for Johnson and we
also decide that in our league, we projected Johnson to be worth $57 this year.
Well, we could bid 91% of value as I demonstrated above but that would be $52
and in our case, we've decided that if we go to $50, no one will top us.
Why waste the extra $2? We bid $50, get Johnson and now add him to our
After the purchase of
Johnson, we have added $57 in projected value to our $140 worth that we already
had. That means we have a total of $197 in projected value and we have
spent a total of $135 to get it. Though the math seems complicated, it
really isn't. These are the sort of scribbles I usually write down during
an auction, usually just crossing out the line above and replacing the new
amounts with my calculation. We now need a remaining $136 in value (we
want to achieve at least $333 in projected value) and we still have $125 to
spend on it. That means we can now afford to bid 92% of projected value
(we have $125 to buy $136 worth of players so that's 92%).
Eventually, usually later
in the draft, we will have picked up enough bargains that we can actually overbid
to get players. That is to say, that we actually need less value than we
have money left. Typically, I have found that this happens when we have
about $50-$60 left but a lot will depend on the nature of your league and its
players. Often, you can have $60 left and you only need $40 worth of
value. That means, you can now bid 1.5 times what you project each player
to be worth (in other words you have more money than you need and so you divide
that as usual - $60 / $40 = 150%) and this is the stage where you will dominate
the draft, if you've done your homework, scooping up bargains left and right.
If you're right about the bargains, you'll win your league. If you're not,
you probably won't.
Though I will talk more
about new auction leagues in a future essay, as opposed to keeper leagues, I
want to emphasize that the emotions make us feel that we will miss getting our
favorite players when we know that 80% of their projected value won't get them
on our roster. I can only emphasize to you that if you really believe that
Barry Bonds, for example, is a $41 player, then it does you no good to buy him
at $41. You're simply paying average price for him and you will end up
with a roster worth exactly $260, just like the average team in your league.
If you want to win, create a slightly underpriced roster, in terms of projected
value, and you'll be going a long way toward success.
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