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The Long Game: Slaying the Inflation Monster

Erik Siegrist

Erik Siegrist is an FSWA award-winning columnist who covers all four major North American sports (that means the NHL, not NASCAR) and whose beat extends back to the days when the Nationals were the Expos and the Thunder were the Sonics. He was the inaugural champion of Rotowire's Staff Keeper baseball league. His work has also appeared at Baseball Prospectus.

The Long Game: Slaying the Inflation Monster

With the last weekend before the real Opening Day looming (I refuse to acknowledge games played at 3:00 in the morning), you're probably settling on your final protected lists in your keeper and dynasty leagues, determining long term contracts, trying to trade away guys who don't feature in your plans etc. My column from last year on roster decisions is still a good primer on the main factors you need to consider when deciding whether to protect a player or cut him loose, but I want to focus a bit more on inflation and its implications.

First, your handy-dandy inflation calculator:

1) Add up the salaries of all the protected players on everyone's freeze lists
2) Add up the projected auction prices of those players
3) Subtract the salary total from the auction price total
4) Divide that remainder from the total budgets of the entire league

Hey presto!  The result is the inflation at your auction table. For instance, in a typical 12-team league with $260 budgets, if the difference between protected salaries and auction prices for the protected players is $312, then inflation will be 10% ($312 divided by $3120).

But what does that actually mean, in practice? To quote a guy who won his home AL-only league last year (#notsohumblebrag):

"...inflation is the amount players bought at auction have their salaries increased because other players were protected below their market value. If you keep a $1 player who would otherwise have gone for $11 at the table, that's $10 more you have to spend on other players. Maybe you use all $10 at once, and get a $30 player for $40, or maybe you spread it around, but either way it gets spent and drives salaries up.

In general economic terms, inflation reduces the value of future earnings. $1 earned in 2013 is worth more to you right now than a dollar earned in 2014, which is worth more than one earned in 2015 etc. In keeper league terms, however, what gets devalued is not earnings but your auction budget. In a redraft league, $260 at the auction table will get you about $260 in player value, depending on your mad auctionating skillz. In a keeper league, if you protect no one and head to the auction table with $260, you will walk away with far less than $260 in player value."

So your remaining auction budget is worth less than it seems. Stupid economics (shakes fist at the rules of supply and demand). How should inflation then affect your approach at the auction table?

Look For Volatility

Certain types of players have more inherent uncertainty in their projections. In an environment where you know you're probably going to have to overpay for a player due to inflation, knowing that there's a higher than normal chance the player's projection will be on the low side, and that he might actually earn close to or even more than you paid for him, makes that bitter inflation pill easier to swallow.

Obviously any player has a chance to outpace their projection, however remote. Maybe Ryan Goins turns out to be the next Brandon Phillips or something. But some projections are innately a little fuzzier than others. For instance, we "know" that the short right field porch in Yankee Stadium helps the home run totals of left-handed hitters, and it's no coincidence that every hitter the Yankees brought in this offseason to be a starter can hit from the left side. But how much will, say Jacoby Ellsbury actually benefit from that? Most projections seem to be pegging him for the mid-teens in HR (we have him at 16, Steamer has him at 16, ZiPS at 14 etc), which would certainly be a nice bump from his usual single digits. The price you pay for him at auction will be rooted in those projections. This is a player with a 32 HR season on his resume, though. Sure, 2011 was an outlier, but outlier doesn't mean "one time only event". If you buy Ellsbury, inflation and all, projecting him for 16 home runs and he instead pops for something in the mid-to-high 20s, suddenly that inflated salary doesn't look so out of line.

Or consider the flip side. We "know" Robinson Cano's move to Seattle will be a drag on his numbers. He'll have a tougher home park in which to hit, and a lesser supporting cast around him. But how much production will he actually lose? RotoWire's projections for Cano actually have him right about at the level he was last season, with only a slight drop in RBI, but we're the optimists in the crowd. Most systems see him giving away plenty in his rate stats, with corresponding drops in his HR and RBI as well. Those are reasonable assumptions, but sometimes superstars gotta super. If the room prices Cano down due to the move, and he doesn't actually suffer any real stat loss in Seattle, buying him at his inflation price could actually land you solid value.

Every season's player pool is going to have lots of players carrying these sorts of extra uncertainty. Players in new home parks, players coming back from injuries, players with roles that aren't entirely settled. Inflationary pressure is going to hit just about everyone, but not everyone has the same chance of earning back their inflated salary. Identifying those who can is a key to constructing a winning roster.

Don't Wait For Bargains

Wait, what? What sort of nonsense is this? Everyone knows that to win an auction, you have to get guys below their market value. Kick this loony out and bring in somebody sane to finish the column.

Look, I'm not saying AVOID bargains. Obviously, if you've got a guy projected to be $25 and the bidding stalls at $19, you should pounce. And almost every auction, even ones with high inflation, will hit a point where people for one reason or another don't bid aggressively, and you can usually get solid value if you make some buys during that soft patch. What I'm saying is, don't sit back and ONLY bid if you have the guy rated as a bargain.

Think about it this way: the extra dollars floating around the table due to inflation always gets spent disproportionately on more valuable players. If your league has 20% inflation, a $1 player isn't going to cost $1.20. He'll still be a buck. All that loose change gets collected up, and instead a $20 player goes for $27 instead of the $24 you had as his market price. Spread that phenomenon out league-wide, and suddenly your projected prices can mostly be tossed out the window. The higher the inflation, the more pronounced this effect will be, both in terms of the number of players affected and the amount by which their prices increase.

In re-draft leagues, sitting back and letting the room burn itself out, or only making a move when a player is below your projected price for him (even if it's only by a buck or two) is absolutely a valid strategy. But in keeper leagues with inflation, those strategies will get you killed. Even if you think you've accounted for inflation properly in your pre-draft prices, they have to be taken more as guidelines than as caps.

If the pool at a particular position is getting shallow, or the players who supply a particular stat are dwindling, don't be afraid to do what you must to get one of them. You will simply need to spend a little more than you'd hoped at least once or twice during the auction, because otherwise you're going to be the poor sap who heads into the endgame with a huge budget and no one good left to spend it on. We've all seen it happen, and we've seen how it can wreck a fantasy season. Don't be that poor sap.