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April 21, 2014 Fantasy FreestyleWhy 70/30?
This winter, there was a great discussion on Twitter with Peter Kreutzer (a.k.a Rotoman) and Chris Liss of Rotowire about why fantasy baseball teams in auction formats spend about 70 percent of their money on hitting and 30 percent on pitching (more or less). We are beyond auction season now, but this is such a terrific debate (and such an important concept to auction owners) that it is worth revisiting now. Kreutzer is correct that we spend more for hitters in the aggregate than we do for pitchers because there is always more value to be had in the free agent pitching pool than there is in the free agent hitting pool. A simpler way of putting this is that in a 12-team format you’re far more likely to buy a pitcher who will not be as good as one of the actual top 108 pitchers as you are to buy a hitter who will not be as good as one of the actual top 168 hitters. I don’t agree with Kreutzer’s assumptions on the valuations, but that’s not especially germane to this particular discussion. He’s right where it counts, and this is why most experts use something along the lines of 65/35, 70/30, or something in between for dollar allocation. However, while this observation about hitting and pitching free agents is correct, it isn’t the primary reason why it is important that you should try to stay close to a 70/30 split on hitting and pitching prices. If you fail to spend 70 percent of your money on hitting and 30 percent on pitching, you will hamper your ability to field a competitive team. For example, let’s say that you decide that paying for pitching is stupid. You decide to go into your auction using an 85/15 split for hitters and pitchers instead of a 70/30 breakdown. Using 2013’s expert league prices as an example, here is what this dollar allocation would have done to the Top 10 AL hitters. Table 1: Ten Most Expensive 2013 AL Hitters: 70% Versus 85%
The average salary is generated from the salaries of three expert leagues: CBS, LABR, and Tout Wars. These leagues have been spending in the neighborhood of 70 percent for hitting and 30 percent for pitching league-wide for the last few years. My recommended bids—published at Baseball Prospectus for the last two years—use a 70/30 framework as well. As a result, my prices for these players are generally in the ballpark of the expert leagues. If I had been a participant in all three expert leagues, there’s a possibility I would have bought Trout in at least one of them and depending on where his price fell, I might have purchased Beltre. The other hitters I would have passed on. Reyes’s average salary matched my suggested bid, but I’m not in the business of buying players at a par price. Now look at what happens when you push 15 percent of your money toward hitting (the 85 pecent hitting budget listed above). Suddenly every price for the top hitters is a good price. In theory you should be buying all of the top hitters until you run out of money. In this scenario, let’s say that you bought Trout, Cabrera, Cano, Pujols, Reyes, and Fielder at one dollar more than their average, expert league bid price. This would cost $222 for six players. At this point, you could either try to fill in across the board with cheap players or spend $22 on one more player and go dollar derby on your remaining 16 roster slots. In a best-case scenario, you would clean up on offense and your pitching would struggle. Worst case, one or two hitter injuries would put your team in the basement. You could argue that since you know that your league is going to only allocate 70 percent per team on offense that you can simply scale back on your prices from the 85 percent for hitters when you are at the auction. However, all you’re doing at this point is engaging in a semantic exercise about what the “right” split is versus how to spend your auction dollars. It is stating the obvious, but if you turn the dial up on pitching spending, the same principles would apply. Table 2: Ten Most Expensive 2013 AL Hitters: 45% Versus 30%
Because you are starting with a smaller percentage of the “pie” allocated toward pitching, adding 15 percent of your overall dollars to the pitching budget doesn’t quite have the same dramatic impact as it does on the hitters. But it does have an impact. In a hypothetical bidding war with all of these teams, I would “buy” all of these players except Sale. The same problem would occur for me on the pitching side, where I’d spend $227 on my top nine arms. I might win all of the non-saves pitching categories, but there isn’t enough variability in the world on offense for me to win any hitting categories while spending $33 on my offense. Maybe I would sneak a few points in steals if I got lucky. The 70/30 split exists not because the dollar allocation is correct or accurate then, but because you are trying to build a team based on market values. You can go over or under budget on the whole for hitters or pitchers by a few percentage points, but once you start moving your split five percent or more in one direction or the other, you run the risk of buying an imbalanced team. Right now, in mid-April after we have purchased our teams, none of this matters. Hitters and pitchers each contribute half of points in roto-style leagues, and the value proposition changes the moment your auction concludes. This is why it isn’t uncommon to see a $25 hitter flipped for a $20 pitcher; once the season starts, we recognize that the 70/30 valuation of the auction is theoretical and wrong in terms of the realities of the season. However, if your budget is too far off, your team will be unbalanced and you will have a difficult time correcting, especially in an only league. In a mixed league, you might be able to adjust through free agency, particularly in the example where you spend 85% on hitting. In the end, though, the 70/30 split might be derived from the number of free agents who are as good or better than the players we actually buy, but for me as a pricer this is a moot point. I’m interested in budgeting for my auctions based on the market conditions; the “whys” of those conditions does not particularly concern me.
Mike Gianella is an author of Baseball Prospectus. Follow @MikeGianella
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Essentially, the argument here is that I should follow the 70-30 split because everyone else does, or at least close enough to everyone else to effectively set market prices.