The Flawed FAAB Process
This week’s ESPN Insider column, appearing every Friday.
Last week, in the Tout Wars Mixed Auction league, the pearl of the free agent pool was the just-anointed closer for the Washington Nationals, Blake Treinen (pictured). This is a player who would have gone for $15-$20 at the draft had he been named a week sooner. Instead, the Touts spent $5 on the earlier presumptive pick, Shawn Kelley, and $6 on the rumored-on-Draft-Day pick, Koda Glover.
Once Treinen was officially named, nine of the 15 owners opened up their wallets, tossing in a bid from their $1000 Free Agent Acquisition Budget (FAAB). The winning bid was a robust $359.
The losing bids were $357, $239, $200, $167, $123, $108, $96, $77 and $39.
The fact that the winning owner eked out his victory by a mere $2 is a minor miracle. That almost never happens. But a look at the range of losing bids seems to indicate a poor assessment of the marketplace. These owners clearly thought they had placed reasonable bids.
I’ll be right up front and confess that the $123 offering was my own losing bid.
The rules of fantasy baseball give us control over so many aspects of this game, so it is astounding that there is so much randomness in the free agent acquisition process. Some owners calculate player value down to the penny on Draft Day but then spend the other 26 weeks of the season using fake money to bid blindly.
Success in acquiring any one player requires that the owner anticipate what the free agent market value of that player is, guess at what might be an appropriate bid, and pray that they’ve bid enough to land the player. Note that “free agent market value” is not the real value of the player, but what the owners in your league are willing to pay. At the same time, the owner must be careful not to bid too much because you don’t get anything back when you overbid, and those FAAB dollars are precious.
Compare the Treinen results to two other free agents purchased that same week:
Delino Deshields
Winning bid: $210
Losing bids: $152, $86, $77, $77, $76, $67, $65, $57, $53
Wasted FAAB: $58
A large group of owners assessed Deshields’ value in the $50-$80 range but they would have had to at least triple their bids to have a chance.
Trevor Cahill
Winning bid: $57
Losing bids: none
Wasted FAAB: $56
Imagine! This owner could have bid just $1 and landed this player. I bet he must be really ticked off about that. (Yes I am.)
In a game in which we feign control, the amount of wasted FAAB each year is almost beyond comprehension. I charted this amount for a league in the National Fantasy Baseball Championship several years ago. Here were the buys and overpays through mid-July that year:
$$ Spent Dollars Pct. Tm on Winners Overbid Overbid == ========== ======== ======= 1 $827 $596 72% 2 $803 $420 52% 3 $550 $430 78% 4 $632 $244 39% 5 $858 $447 52% 6 $998 $562 56% 7 $850 $523 62% 8 $722 $257 36% 9 $316 $211 67% 10 $982 $601 61% 11 $705 $349 50% 12 $880 $452 51% 13 $870 $526 60% 14 $843 $390 46% 15 $678 $418 62% LG $11,514 $6,426 56%
This wasn’t even a full season. With all this indiscriminate spending, were these smart people exercising bad money management, or just using a bad system?
My opinion? It’s a bad system. It’s a terrible system.
I get a fair amount of pushback on this position. Some people believe that strong enough tendencies emerge, particularly in long-term leagues, where prudent management of this scarce resource is possible.
But these are the same people that believe that accurate marketplace evaluation can be culled down to a four-part general assessment. Your free agent bid should be based on:
- The impact of the player on your team’s standings.
- The impact of the player on other teams’ standings.
- How much you have left in your FAAB budget.
- How much everyone else has left in their budgets.
This seems highly simplistic and ridiculously vague. When I placed my bid for Cahill, my thought process was:
- I could use another starter.
- Heck, everyone could use another starter.
- Based on what I read, I think I value Cahill a little bit higher than others.
- But just in case someone else likes him, let’s build in a buffer.
- $57.
It’s a pretty scientific process like that.
Another element of the thought process is the fact that a free agent acquired in April has potentially three times as much impact as one acquired at the MLB trading deadline on July 31. “Spend early and often,” is what I always say.
But the Touts historically haven’t followed this mantra. I tracked the actual monthly spending pattern for the AL-only league several years ago and it looked like this:
Month FAAB Spent ===== ========== April 12% May 19 June 14 July 29 August 23 Sept 3
The high percentage of FAAB purchases in July represented the trading deadline frenzy. The big August numbers were when the deadline losers realized that they had too much money left, so they started spending exorbitantly for otherwise marginal players. Yes, sound money management.
In mixed leagues, this phenomenon is significantly tempered. The only big deadline expenditures are for players with new roles, such as a reliever traded to become a team’s closer.
Perhaps one way to offset the randomness of the process is to set a monthly budget for your FAAB bidding. The caliber of available talent will drive your spending but having some benchmarks could still be useful.
It might look something like this:
Month FAAB Spent ===== ========== April 23 % May 27 June 20 July 17 August 10 Sept 3
A straight “spend early and often” strategy might look more like “29, 24, 19, 14, 9, 5,” but we need to be a bit more strategic about it.
I’d allocate a good amount of the budget to April, but I’d also want to avoid making decisions based on too-small sample sizes. By May, we have a much better idea of where our true strengths and weaknesses lie and are in better position to acquire players who can really help us. To maximize the calendar, I’d want to have spent 70 percent of my budget by the season’s midpoint.
Typically, I close my FAAB wallet for the first three weeks in July. For one, you never know when a player you buy might be out of a job after the trading deadline. And of course, you want to at least have a chance to be in on the deadline bidding for some players.
However, most of this strategy applies to discretionary spending. If an injury hits, you have to react. When you have Gary Sanchez go down for four weeks and another owner is sitting on the 0 for 19 Austin Hedges, the value of free agent Martin Maldonado takes on potentially epic FAAB proportions.
Next week: Potential alternatives to FAAB.
Ron, just because teams spend way more than the need to, it doesn’t mean the system is flawed. I actually like the idea that valuing FAABs is a challenging activity. In my league we have $150 for the year to cover all transactions. We can bid every day. You can even bid on minor leaguers as long as they are in the cbs sight. The caveat is we have no reserve bench. All players are active (unless on the dl). Sample prices: Benoit went for $15 last week. 2 years ago, when Cespedes came over to the Mets (NL only, 9 years), he went for $70)
I agree that the system is flawed. It is excruciatingly frustrating to blindly overpay for free agents. I think the problem is exacerbated by leagues that have a $1000 free agent budget for each team (such as NFBC). Early in the season, a $500 bid doesn’t seem as crippling as a $50 bid (with a standard $100 budget), which I believe leads to the wide variance of bids and overbidding. Certainly, I understand that bid amounts are relative to how much you have to spend but I think a lower budget would help cut down on the variance of bids and overbidding. I look forward to reading about your potential alternatives.
In a league I’m in, its set where the winning bid is always $1 more than the next highest bid. So if Owner A place a bid of $30 on a player and Owner B bid $22 on that same player, then the Player would be sold to Owner a for $23. You have to be willing to bid what you put in, but doesnt “waste” the dollars.
Many people feel this way. But I don’t understand why you’d never spend $30 for a player you could get for $25 at the draft but the rules change for free agents. A scarce commodity is still a scarce commodity.
This is the Vickrey Method, introduced by Nobel Prize winner William Vickrey. I’ll touch on this in next week’s column.
Ron, How much do you have in the FAAB? The one league that I’m in – you start with $100, plus whatever is left from your $260 draft day budget. We also use “the Vickrey Method” which we enacted last season based on eBay. 🙂
So what is the net effect of the Vickrey method after it’s been in use? Overbidding? By bidding a max bid, you would get the player and only pay $1 more than the #2 bid. In Ron’s case, he could have bid $100 for Cahill and still got him for $1. Is that right? FAAB means more of a market based bid. You make an over bid, you get hung out to dry. It’s not perfect but this game will never be perfect to project.
I like that rule where you get to use your leftover draft dollars. A better rule is to have a single year-long budget — $500, say — to use at the draft and during the season. But all leagues are different. Most common FAAB amounts I’ve seen are $100 and $1000. All funny money.
I liked this article as this season I’m in a league with FAAB for the first time, and so far I like the craziness and gamesmanship of it. I couldn’t imagine spending $300 in week one, but I’m a newbie. When looking at the Poll of the Week on when to take results seriously, I thought if having a BABS liability would cause doubt in a particular player more quickly. For example, would age (Zobrist), injury history (Victor Martinez), lack of experience (Baez, Bregman), or playing in a new park (EE) cause doubt in some of these players before those without any identified liabilities (Rendon, Hosmer). It’s probably too early for this question, but for the players that continue to struggle, perhaps owners would tend to abandon one type of player before another.
In our league we have $100 FAAB, and we use the Vickrey method. One change I really like is that we do not allow bidding until the first Saturday after May 1. This allows the standings to “normalize” and teams to get a sense of what their team needs truly are. We also play Ultra (with a 17 round reserve draft immediately following the auction) so forcing teams to wait until May to bid on free agents puts an emphasis on the reserve draft. (If you do a poor job of insuring yourself against injuries, you suffer for that month).
I’ve often advocated for this May 1 delay but rarely get any buy-in. Kudos to your league.
In our case you only have $150, vs $260 at the draft. You don’t know what else is coming and you don’t know what you need throughout the year since the money is for injury replacement as well. In this case Benoit probably goes for $6-8 in our draft, so people did spend. I’m a believer in spending early if you are improving with a good level of confidence.
WATS THE PROBLEM WITH THE ‘OLD WW’ SYSTEM? WORSE SHUD/CUD/WOOD GET THE FIRST PICK, THE FIRST WEEK AND THEN GOES TO THE BOTTOM SLOT. YU CAN ENHANCE YER PICK BY NOT CHOOSING. THE FOLLOWING WEEK, WW ORDER BEGINS WHERE IT LEFT OFF PREVIOUS WEEK. AT THE END OF WW, ALL REMAINING FA’S ARE OPEN FOR ‘FREE’, FIRST TO POST ON DEFINED STRING, GETS HIM. BASICALLY, THE ONLY RULE PICKING UP EITHER FA, IS THAT YU HAFTA PLAY HIM (SO THE PLAYER YU DROP IS AVAILABLE THE NEXT WEEK OR MAY BE RESERVED IF ON DL OR DEMOTED TO MINORS).
I PLAY IN SUCH A LEAGUE WITH ONE EXCEPTION — WW ORDER STARTS EACH WEEK IN REVERSE ORDER OF STANDINGS, SO PASSING DON’T HELP YU (I HAVE NOT BEEN ABLE TO CONVINCE SIX OTHERS IN MY 12 TEAM LEAGUE TO CHANGE RULE). THERE HAVE BEEN NO ARGUMENTS OR DISAGREEMENTS YET!
IT SEEMS TO ME THAT THE WAY YER LEAGUE IS ACTUALLY SET UP (RESERVES, DL SLOTS, MINORS), DETERMINES HOW YU PLAY THE PICK-UP GAME, ALONG WITH THE VARIED RULES EACH LEAGUE PLAYS (KEEPERS, TRADING RULES, ETC.)
I think that the biggest issue with the straight waiver wire method is that it rewards poor performance. Even if I have a terrific draft, if my team gets off to a bad start, I’d get first dibs on the best free agent. That doesn’t seem fair. Everyone should have a shot at all the incoming talent.
ONLY THE FIRST WEEK…. ALSO, IF YU DRAFTED SO GOOD, WHY WOOD YU DROP A POOR PLAYING FIRT WEEKER FOR A FAST PLAYING FIRST WEEKER? WOODN’T YU HAVE DRAFTED HIM?
LIKE I STATED: WORSE SHUD/CUD/WOOD GET THE FIRST PICK, THE FIRST WEEK AND THEN GOES TO THE BOTTOM SLOT. YU CAN ENHANCE YER PICK BY NOT CHOOSING. THE FOLLOWING WEEK, WW ORDER BEGINS WHERE IT LEFT OFF PREVIOUS WEEK
I FEEL VERY STRONGLY NOT USING A FAAB SYSTEM! USING YER DATA, IT SEEMS LIKE ALLOTTA LUCK IS INVOLVED! WHAT’S WORSE? I GUY WITH LUCK USING FAAB OR SOMEONE YU CAN OUTWIT IN A TRADE? (BTW, I PLAY IN TWO LEAGUES WHICH WE USE FAAB)
Well, I might not be dropping a poor playing first-weeker. I might be dropping a player who got hurt. Or maybe I drafted Byron Buxton and decide that I am not going to give him a lot of rope, so if I’m in last place, I can have first dibs on Avisail Garcia? Or maybe I think my team stinks so I don’t make any moves for a few weeks and wait until I’ve got the first WW priority and a good player becomes available. Seems like you can game this system a bit. No system is perfect.