A baby step towards dealing with FAAB

Those who read me regularly know that I am not a fan of FAAB – the Free Agent Acquisition Budget – specifically, the blind-bidding process that uses it. For all the effort we make to try to accurately value players during the draft, we are seemingly fine with throwing away gobs of money in FAAB. Frankly, it’s not much of a “budget” at all.

Research I did years ago showed that we lose over 50 percent of our FAAB dollars in overbids. That’s money just squandered because we are not better at placing value on players during the season. It’s tough to find accurate values when you are bidding blind!

I’ve written about possible solutions as well, but that is not the point of this article. Faced with the reality that FAAB exists and we have to deal with it, there is a chart I use that I wanted to share with you.

It started with the realization that, in order to set a benchmark in my mind as to what a player could be worth, I needed to put FAAB dollars on the same scale as draft dollars. So, calibrating $1000 in FAAB to $260 draft dollars (and draft rounds) yields this chart:

FAAB$     Draft$     ADP Rd
-----     ------     ------
$1        $.25       Reserve
$5          $1         22
$10         $2         20
$15         $3         19
$20         $4         18
$25         $7         15
$50        $13          9
$75        $20          4
$100       $26          3
$125       $33          2
$150       $39          1
$175       $46          1
$200       $52          1

So, if I think a free agent would potentially be a $20 player/4th rounder if today was Draft Day, then I need to think of a FAAB bid in the vicinity of $75. I would probably consider $75 as a minimum bid, depending on the circumstances. Similarly, if I think the player could be even remotely draftable in March — and not just a desperation FAAB fill-in now — I need to start at $5; anything less would be the caliber of a reserve pick. Austin Riley (pictured) would likely draw triple digits.

I use this chart as a starting point. It’s not perfect, because I may be the only one who views things like this. There is always one imbecile who is going to place a $300 bid for someone he’d draft for $7 in March. But by the same token, Riley’s bid winners this past weekend far exceeded the top value in my chart because, well, FAAB is funny money (and draft dollars are precious). So, whatever.

Draft dollar spending is about roster construction first, and need second. FAAB spending is almost completely driven by need. The different motivations create different pricing strategies. And the different methods – blind versus not-blind – create the wild bids that are tough to understand and justify.

It’s funny. I’ve heard several experts on podcasts asked how they came up with a specific dollar value for a player they acquired via FAAB, and not one was able to describe the process without using the word, “gut.”

For what it’s worth, 30 players were acquired via FAAB in the Tout Wars Mixed Auction league on Sunday night. Their owners paid $1657, which is 11 percent of a full season’s $15,000 FAAB allotment. But wait — the league only had $8085 left in their coffers at the beginning of the weekend, so that $1657 was actually a twenty percent hit!

Riley went for $384. The next highest bid was $379, which was pretty amazing, all things considered. But Willie Calhoun’s $311 purchase price was a $143 overbid. And 15 of the 30 players were purchased for a total of $146 when fifteen $1 bids would have done the job.

In all, $502 of the $1657 investments were overbids, a 30 percent rate which was better than past experience. However you want to frame it, these are still squandered dollars that might have been saved for future investments had we used a bidding system that was a little less blind.

But that’s an old discussion that I’m tired of writing about because too many people think the word “budget” in an economic game is just a suggestion.