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May 27, 2015 The QuintonWhat Buyers Sell in Keeper Leagues
While we usually think of teams playing for a championship this season as buyers and teams playing for the future as sellers, the obvious truth is that both teams are selling something. One of my favorite parts about keeper leagues (at least the ones in which I participate) is that there are different types of assets to trade. Teams can trade major leaguers, minor leaguers, and future minor-league draft picks. For sellers, anything that does not have future value, such as players on expiring or overly expensive contracts, will be on the trade block so long as the return is worth the cost (whatever that might be). Sellers might also try to trade assets with future value for assets with more future value. This part is pretty straightforward. The more interesting part is probably what buyers choose to and do sell. Everyone tries to hold onto their top prospects, while selling more marginal pieces. Then, when buyers are up against the trade deadline, they might sell their more valuable pieces to take a shot at a championship. We discussed the advantages and disadvantages of preempting the normal trade cycle here, so it now behooves us to take a look at the decision-making factors that come into play when trading each of the previously mentioned assets as buyers. Trading Prospects As mentioned previously, what I have observed is that buyers try to avoid selling their top prospects. This often results in small trades that marginally improve each team involved. This is fine in theory, but given what we think we know about human behavior, there is a good chance we are consistently leaving value on the table. The endowment effect, which causes us to value something more highly simply because it is ours, probably causes to overrate our minor leaguers: players who we have watched grow and progress, players in whom we have invested both time and reputation. Additionally, the more valuable the piece we trade away, the riskier we perceive the trade to be; thus making us less likely to make such a trade. Lastly, overrating our “top” prospects might cause us to underrate our lesser prospects, causing us to trade them away too cheaply. Like so many other decision-making errors we make, this is really an error in decision framing. First of all, we are completely ignoring the return package, making it impossible to actually assess the riskiness of any trade. Secondly, in fantasy baseball, we should be looking at prospects as assets that can help us win. If that is helping us win via the production they bring back via trade, then that should be just as valued as them providing value to our team once they reach the major league level. Yes, it is going to not feel great when a minor leaguer we traded becomes a bona fide fantasy contributor, but it is not going to feel great when we watch another team finish just ahead of us because we held onto our beloved prospects. It is a debate we have on the non-fantasy side all of the time, and there is certainly a point where the production we can get back for our minor leaguers is not worth the value of keeping them, but we need to make sure our evaluation of the situation has removed the previously mentioned biases. Trading Minor League Draft Picks In many of my leagues, future minor-league draft picks (especially first-round picks) are the first things to be traded. This is most likely the case because they carry obvious future value for the sellers, while being void of endowment-effect-influenced-valuation for the buyers. The important thing is to make sure we are properly valuing draft picks. In other words, just because we our current minor leaguers are in hand (less uncertainty), whereas future draft picks are not (more uncertainty), does not necessitate the former being more valuable than the latter. In these situations it is important to use league norms to your advantage, either avoiding such trades because these picks get underrated or seeking them because these picks get overrated. It is also important to take note of how easily minor leagues picks can be replenished. If, after the season, you can always trade a first round pick two years down the road to an owner with an extra pick this year for that extra pick, then trading away those in picks becomes a more effective strategy. However, if this is costly or difficult to do, then trading those picks away becomes more costly in the long term. Again, knowing your league is imperative and often a more valuable skill than being marginally better at picking players. Trading Major League Talent There are essentially two types of major-league players that get traded by buyers in-season. The first type is cheap, decent players that get traded for better, expiring players. This is straightforward. The second type is more interesting: It is trading an “untouchable” player for a huge return package. Sure, you will most likely be trading away the most valuable future piece, but trading such a player can often bring back the most lopsided returns. However, it would have almost been impossible last year to convince owners that trading away a $5 Corey Kluber or a $1 Josh Harrison could be the best deal they make, no matter how lopsided the offer. The key here is knowing that giving someone what they most want is usually the best way to “win” a negotiation. So if you have a real shot of winning and someone tells you they are interested in your $5 Dallas Keuchel, do not immediately dismiss them. Instead, shoot for the moon in your counter offer and you might be surprised at what you can get back. So get buying (if the timing is right) and make sure you are making the best trades, not just the least risky or most defensible.
Jeff Quinton is an author of Baseball Prospectus. Follow @jjq01
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Jeff, this is great article and a topic I enjoy talking about more than most because of the extensive analytical basis of it. Because of that I could, seemingly like you, talk at length about this topic as well.
There are a couple of things I feel are more important than just being hinted at. One is Timing. Timing could dictate the value of the assets. For example, draft picks could potentially have more value the closer it is to the actual draft. While a 1st round pick has its own face value, it could just as easily get added to a trade to ensure the trade is completed. However, before baseball season begins the main topic in keeper leagues is the draft and trading these picks at that time could potentially result in greater return because of the immediacy of the topic.
Another example of timing would be the urgency of the buyers. The previously mentioned Kluber traded now or earlier in the year would result in a return value of someone of his elite caliber. However, the return could be greater towards the end of the year as you are not only getting a return value for his capability but the buyer will potentially pay more for Kluber getting his team into/deeper into the playoffs.
So, timing is also a major to consider when making offers. This is a retired man's opinion based on experience and observations.
Silverback38-
So sorry for the late reply. I too could talk about this at length. For me, this is the interesting part.
I completely agree that timing is the most important factor, I breezed over it because I have written about it previously (whether I did a good job, that remains to be seen).