Understanding draft dynamics and valuation

Translated by Pepe Latorre

Most valuation systems, including mine, use a generalized set of assumptions about how the market will behave (i.e., a “typical” league). The primary assumption driving the valuation is that this typical league will allocate 65% to 70% of its resources to hitting and 30% to 35% to pitching. My pricing system allocates 67.3% to offense and 33.7% to pitchers, which translates to $2,100 for hitters and $1,020 for pitchers in 12-team leagues and $2,625 and $1,275 in 15-team leagues. teams. Admittedly, it seems like this theory is only viable for leagues that bid for players, but it also works for draft leagues because each draft spot is theoretically worth a certain amount of draft capital.

Fantasy leagues adhere strictly and essentially to these assumptions. However, there are always outliers, both in terms of team and league behavior. The most likely source of an outlier is how an individual team behaves. A team in a bidding format could split its offensive/pitching capital at $200/$60 or $140/$120. Even in a 12-team league a fantasy manager using $40 differently changes the overall picture very little. Instead of a 67.3%/33.7% split we would find a 68.9%/31.4% split. Leagues also tend to “correct” themselves, that is, if one team spends more on pitching, the rest of the league spends more on hitting and the average is roughly the same.

But sometimes an entire league is an outlier.

Table 1: CBS, LABR and Tout Wars. Spending in 2024 in an AL league.

CBS, LABR and Tout Wars are three baseball people’s leagues with many variables and that have existed since 2004. The difference between LABR and Tout is negligible: a difference of $34 in pitcher prices across the league is equivalent to a difference of just $2.83 per team. Not enough to be important. However, the $176 difference between CBS and Tout equates to a difference of $14.67 per team, which is significant.

If you normally have a budget of $80 to $85 for your pitching team and you are in a league that runs that way, you need to adjust your bids accordingly so you don’t end up with a $40 to $50 pitching team because everyone else is “overspending.” more” on launchers or, worse yet, adjust on the fly and pay $25 per Aaron Civale because you don’t want to leave money on the table. You don’t want to do any of these things, but “overspending” on hitting is better than overcorrecting on one or two pitchers. If you’re abruptly overcorrecting mid-draft, it’s already too late.

You also can’t just look at CBS, see that they are spending 13% more than my bid limits recommend, and make a 13% adjustment across the board.

Table 2: CBS, American League offers by level in 2024

What is happening in the CBS league is that fantasy managers, who are mostly mixed league players, are not adjusting properly to the dynamics of the American League. This results in high prices at the top for both hitters and pitchers. CBS’ “Expected” column shows what would happen if the adjustments CBS made were linear for less spending on offense and more spending on pitching. But they are not linear. Instead, the most expensive players get even more money than what my bid limits recommend (or what is paid in the LABR and Tout leagues). In the end, on both the hitting and pitching sides, the money runs out. This top-spending strategy generally works better in mixed leagues, where cheap players remain starters and there is more variation of opinion on $1 to $3 players, than in mono formats, where $1 hitters are frequently bench options.

Not all market differences occur in the aggregate, as in the example of the American League on CBS. There are leagues that refuse to spend on catchers or overpay closers. In the example of an entire league shifting its draft capital toward pitching and away from hitting, it’s easier to make adjustments because while you get less for the money invested in pitching, so does everyone else.

An additional challenge is that in cases where a position or category is treated differently, there is no right answer in terms of bidding or drafting behavior, meaning there is no simple mathematical solution that can be found. apply to make the “correct” adjustment. Depending on what the market is doing (or not doing), you may want to follow the market and spend more on catchers or less on closers. Or you can spend $2 on both catchers and spend $30 on two closers because the prices are right. I can make general recommendations on how to behave, but there is no one-size-fits-all solution. It depends on your league.

Since during the winter and early spring I write almost exclusively about NFBC (National Fantasy Baseball Championship) drafts, it is worth clarifying that the NFBC market generally overpays for pitchers. This probably won’t be news to anyone, the surprise is how overextended the NFBC market is.

Table 3: NFBC Draft Pick: Pitcher “Value” vs. Actual Value in 2024

The ADP columns (remember that ADP is average draft position) in Table 3 reflect the ADP in the NFBC Draft Champions leagues in 2024. The Draft Value column shows the value of the best pitchers at the end of 2024 . For example, Spencer Strider he was the first pitcher chosen with the fifth overall pick. Pull Skubal he was the best pitcher and sixth best value (hitter or pitcher) overall. Table 3 does not measure each pitcher’s performance relative to his ADP, but rather how much the NFBC market spent relative to what the pitching group earned at the end of the season.

We pay “too much” for pitchers, but not in the way we suspect. Relative to what they can earn, the 15 most expensive pitchers are priced appropriately. The next 15 pitchers (level 2) are overpaid by about one round’s worth compared to what they can earn. However, it was in levels 3 to 7 (ADP 96-294) where excessive spending was rampant. There are certain pitchers who certainly can and do exceed their value in this wide valuation range, but many of them do not and, in addition to the failure that is implicit for pitchers in these rounds, the market is paying too much for them in based on what pitchers in these value ranges typically earn.

That’s the question. We need pitchers, and we can’t completely rule out pitchers between rounds 7 and 19. However, it’s a good idea to get as many pitchers as possible early on and hire as little as necessary in the middle rounds.

Knowing that valuation is not linear is quite useful, both for bidding and draft formats. It allows you to maximize value within certain segments of your draft, develop your goals more appropriately, and stay away from parts of the bid or draft where you might end up paying “too much” for the same statistical or positional product you can get. later at a cheaper price.