Using risk to your advantage on draft day

This is my weekly article from ESPN Insider.

During the course of his career, Edwin Encarnacion has had a pre-draft ADP in the Top 15 only once, slotting in at No. 10 in 2015. He has earned first round value only once as well, pulling up the bottom at No. 15 in 2012. Yet Encarnacion is always near the top of our draft boards. Perhaps he might be considered as having peaked as a second-rounder (not that there’s anything wrong with that).

His ranking has been in decline since moving to Cleveland, and as he reaches his mid-30s, it is safe to say that his best is probably behind him. Currently, his ADP is down to No. 55. Projections from a variety of sources range from about 30-90-.260 on the low end to about 35-115-.265 on the high end.

There is another player on the draft board whose projections substantially overlap with Encarnacion. Forecasts put him around 29-33 home runs, 80-90 RBI and a batting average between .255 and .265.

But Justin Smoak (pictured) is going almost 100 spots later, at No. 150. Is the variance in skill really that wide?

Statistically, no. The difference between their home run projections is a few errant gusts of wind. The difference in batting average is nothing more than a rounding error. In the end, Encarnacion’s higher price tag is for want of 15-20 RBI. Are those RBIs really worth 95 spots on the board?

No, but you are also paying for a track record and the reduced risk that experience brings. Encarnacion has been putting up his numbers over a longer period. Smoak posted a career year in 2017, albeit supported by some legitimate adjustments he made at the plate. Given that one player is on the decline and the other’s projection has some regression already baked in, doesn’t that make Smoak a better pick at his slot? It probably does. Smoak represents profit.

The winner of your league is not going to be the owner who has the best player projections. The winner is going to be the owner who has more profit built into his roster. One way to find that profit is to uncover market inefficiencies and embrace some level of risk. Moneyball is still alive; you just need to know where to look.

Assuming risk at the top of the talent pyramid does not make sense. You are already paying a premium for the best players and any profit they might give you is not going to equate to more than a 5-10% bump in productivity. Odds are Paul Goldschmidt is not going to come out of 2018 with 50 HRs and a .350 average.

As I wrote last week, caution is warranted here as well. When you draft Trea Turner in the first round, you are already paying a premium and assuming the risk that he might once again fail to reach 500 at bats again. There is likely no profit potential here. For me, this is not where you take on excess risk.

There are pockets of profit all through the player pool if you are willing to take on some risk in more appropriate places. Here are two examples from 2017:

If you examined their support metrics last draft day, Jacob deGrom and Carlos Martinez held nearly identical skill sets. As it turned out, the marketplace recognized that, and their pre-season ADPs were 67 and 68, respectively.

There was another pitcher who shared essentially equivalent skills but was being drafted at No. 389 because of his extensive injury risk. If you recognized the upside and were willing to build that risk into your roster, Alex Wood could have been drafted for a song. The secret to that profit was recognizing the equivalent skills and leveraging the marketplace.

Similarly, Evan Longoria, Jake Lamb and Nick Castellanos were essentially interchangeable commodities but were being drafted at Nos. 107, 146 and 206, respectively. Castellanos carried some health baggage, but turned out to be a bargain at his price.

The Encarnacion-Smoak tandem offers just one of many risk-related profit opportunities in 2018 if you know where to look. Here are two more:

There is general agreement that Aaron Judge’s home run output is going to regress off the 52 bombs he hit last year. It might be in the forties; it might be lower. He is being projected for at least 100 RBI. Given his batting average history, a prudent expectation might be somewhere in the .250-.270 range. Judge is currently going No. 18.

There is another player who is being projected for around 40 home runs, over 100 RBI and a batting average right around .250. But Khris Davis is going No. 69. Does 10 points, or even 20 points of batting average justify a 50-slot premium? I don’t think so. Pass on Judge, grab Davis and pocket the profit.

The marketplace is down on Andrew McCutchen given that he is moving to a ballpark that’s tough on hitters. But good hitters are not as affected by park factors. Analysts project 20-25 homers, around 10 steals and a .280 batting average. He is currently ranked No. 88.

There is another hitter going 57 spots earlier who is projected for upwards of 30 homers, around 10 steals and a .275 average. Yes, George Springer is better, but a four-round premium for want of five home runs seems a bit steep. Take on the risk of McCutchen’s new ballpark and the profit should be there.

There are many pockets of potential profit all through the player pool. Not all can be measured in rounds, but even accumulating a few 5-10 slot advantages can pay off.

BABSian Note: Admittedly, this is basic BABS theory, but presenting it in these terms is the one way to open the path to the promised land.