Calculating Keeper League Inflation

This article first appeared Mar. 14, 2000, but remains a good basic guide for calculating inflation in keeper leagues.

More than any other question I get asked over the winter one keeps coming back to haunt me. "Should I keep (insert player here) for (insert price here)?" Sometimes it is several players, sometimes the prices are on a different scale, but almost always, the answer depends on two factors.

First, how will the player do next year. Now, that's usually the money question, it's why I'm an "expert" you show up to read on this site, why people get paid in this business and so on. Predicting player performance plays a premier part of any pontificator paycheck. Or at least it should be (and thanks to Mrs. Ellison for teaching me alliteration). Point is, prediction precedes petty parts of... ok I'll knock it off.

Long article made short, until you know, or think you know, how well a player will do, everything else is secondary. You can run equation after equation, and mountains of spreadsheets and valuation equations and rolling chicken bones across the floor, and whatever else you want, but it all means squat if you have Eric Owens hitting .315/35/120 this season.

So, I will deal with how to deal with how to predict player performance some other time, since it's a long complicated process.

The second factor, and one people almost always seem to forget, in keeping players is inflation. Now, I know people know it exists, but so few people actually figure it out and adjust their prices for it. I'm guilty of that, I hardly ever actually do it, I just guess it. That's a bad, bad thing. Standard inflation is anywhere from 20-30 percent. That \$14 player you are looking at? Well, he's \$17 now. That \$25 ace pitcher, he is \$30 now.

Does inflation have as much effect as in draft economy changes (oh boy, another good column topic), maybe, but why purposely leave your hands tied when dealing with the value of players? If you can predict what a player will earn, you have an advantage.

The reason people don't predict inflation isn't usually because they are lazy, like myself, but because they think it's hard. Face it, you hear Greenspan rambling on about 1632 inflationary factors and stockmarket fluxes, blah, blah, blah. Lucky for you the RotoEconomy is much simpler, so figuring out inflation is tons easier.

Inflation is nothing but the change in supply and demand. If you save a \$26 Roger Cedeno at \$6, then you just removed his \$26 of talent-value for \$6. Simple enough, right? Less talent to draft, but still more money hanging around. That's all we ever are dealing with, what can I get for my buck.

So here is the quick and dirty way to figure auction inflation.

First, add up all the keepers values. Go on, every single player kept. What do you think they are worth? Get your value from wherever you like, as long as it is the same scale you are using everywhere else.

In this fake little league in my mind only 6 players were kept. Yes, six players for the entire league, mixed, 4x4. I'm trying to keep this simple. Umm, let's see. Brian Giles at \$10, Jeff Cirillo at \$16, Todd Walker at \$18, Ruben Mateo at \$3, Jermaine Dye at \$1 and Brian Daubach at \$2.

Ok, I've got the values they are going to earn at: Giles \$30, Cirillo \$27, Walker \$15, Mateo \$12, Dye \$10 and Daubach \$8. That's \$102 in value.

Next step, add up what they are being kept at. Doing the math in my head, \$50. Still with me, good.

So we have 12 teams \$260 per team, 168 hitters, 67 percent hitters split. Thats \$2090 to be spent on hitters. As a side note, some people figure inflation for an entire league. I figure two of them, since the inflation on hitters shouldn't affect the inflation on pitchers if you keep your split straight. Two different sets of points, stats, inflations. Feel free to do it your way if you think differently though.

Moving on, next we take the talent-value and subtract it from the total hitters pool of available money. \$2090 - \$102 = \$1988. Now do the same for kept-value. \$2090- \$50 = \$2040. So now we have two values, the available amount of talent that can be drafted, \$1988, and the amount of money available to spend, \$2040.

Into the home stretch. Divide the money available into the talent available. \$2040/\$1988 = 1.03. There you have it. In this example the inflation rate is 3 percent. Now, if it's that low, I wouldn't even go farther. There are so many other factors that can change things by a lousy 3 percent the rounding errors on your dollar values become more of a mess than a help.

But assuming that instead of six players saving you 52 dollars it's 4 players a team, or 48 players saving you or, say, \$300. You now have 14% inflation.

Ok, you got me, I took the long way - you could have saved a step and just divided the price of the savings into the hitters money pool. But the long way let me show why things worked that way.

Ditching our six keepers at 3 percent and moving on to 48 players at 14 percent. You now just adjust every player by 14% to get the new price. If a guy is at \$17, a 14% inflation make his draft value \$19.38, or adds about \$2 to his draft price.

You just do this to every player on the hitters' side. People may look a little funny at you spending \$34 for a \$30 player, but you are still getting at about his value. The real advantage is when you get down to the \$10-5 fill-ins, you can get them by spending the extra buck sooner. Your league mates, at least a few of them sticking to their unadjusted values, will have 8 or 9 bucks left over when there are only \$1 and \$2 players available.

So, will it really make a huge difference in your prices? It won't make or break your auction, but it's an advantage, and that is something if you pass up you might kick yourself for if you are the one with \$12 in your budget and are staring at some 4th outfielder getting crickets at \$2 to finalize your roster. But then you won't know if that is true until you figure out your league's inflation, will you?