Why I hate FAAB

This article was originally published at BaseballHQ.com on June 10, 2005. My opinion has not changed.

---

Sometimes I can’t believe the things we accept about this game.

One of the great allures of playing fantasy — you might even call it the foundation of the game — is the sense of control it gives us. No longer do we have to sit back and question the decisions made by our home team’s management. Fantasy gives us the opportunity to run our own team, to assess talent and project value, and to make the personnel decisions that shape our own fortunes. In auction and salary-cap leagues, we also play with economics, getting to build our team within a pre-set budget. But it all comes down to one central concept, that of taking control of our own destinies.

The rules of the game foster this control. A player gets to be on our roster only if we say so. We get to trade these players to acquire more needed commodities. And we get to cut them when they pollute our statistics beyond our threshold for pain (which is, perhaps, the greatest sense of power known to man).

Still, there are things we don’t have control over. We can’t control what numbers these players put up. We can’t control their ability to stay healthy. We can’t control what foreign substances they put into their bodies or how their off-field activities affect their on-field demeanor. But we can accept these variable elements of the game because, well, their real managers have no control over those uncertainties either.

Since fantasy baseball is all about control, one would think we’d design a set of rules to maximize that core element of the game and minimize those things that are left to chance, or luck. But we don’t. We have this thing called the Free Agent Acquisition Budget, or FAAB. FAAB is the methodology many leagues use to acquire new players; it’s an important part of roster management. But it leaves this process in the hands of a blind bidding system.

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.

Many fantasy leaguers are quite content with FAAB. I think it’s absurd.

Unlike a draft day auction, FAAB gives us a false sense of control over what players we can acquire. On draft day, if you have enough money, you can buy whoever you want. On FAAB day, if you have enough money, the only way to guarantee the acquisition of a player is to spend that money indiscriminately. That’s because each player’s market value for that particular bidding period is unknown. It does not correlate to a player’s real market value. It only barely correlates to supply or demand within the marketplace. It’s arbitrary. Everyone is shooting arrows in the dark at an unknown target.

If I want a player more than any other owner in the league, and I am willing to pay for that right, I should be able to acquire that player. Period. However, a closed bidding system conceals what I need to pay to exercise that right. So, the only way to ensure this acquisition is to partake in irresponsible money management. But I should not have to bid $20 to guarantee the purchase of a player with a free agent market value of $5.

Let’s take a look at how this process works, at least at my desk.

It was a very active free agent week in the Tout Wars-AL league last Friday. Eighteen players were acquired by nine of the 12 teams for a total cost of $86. There were several plum minor league call-ups who were sure to generate some spirited bidding. My team had recently fallen to third after spending the first two months of the season atop the standings. As those of you who have been following my exploits know, my squad has been cleaning up on offense but struggling on the mound.

Here is where the FAAB gods were sitting last Friday:

                             R  A  N  K
TEAM              FAAB$   Overall  Wins   ERA   WHIP    K   
================  =====   =======  ====  ====  =====  ====
Shandler (BHQ)    $ 96       3       9     7     9      8
Peterson (STATS)    96       6       4     8    10      5
Berry (TMR)         85      11       8    12    12     11  
Fogel (USA Stats)   83       1       3     1     1      2
Michaels (CS)       76       5       7     9     6      7
Siano (MLB.com)     76      10      11     3     4     10 
Walker (WSJ)        76       4       1     4     3      1
Erickson (Rwire)    75      12      12    11     8     12
Sheehan (BP)        68       7      10    10    11      9
Moyer (BIS)         65       8       6     2     2      3
Wood (LongGandhi)   32       9       5     6     7      4
Grey (Mastersball)  17       2       2     5     5      6

From a FAAB perspective, this is a sweet spot. With the exception of Dean Peterson, I could have any player I wanted if I bid enough, in theory. However, while an $86 offering would give me a 91% guarantee, there were no players worthy of such a bid.

The prime commodities we’d be bidding on this day were Chris Shelton, Chad Gaudin (pictured above), Chad Orvella, Mike Morse, and due to his untimely release the prior week, Sidney Ponson.

What are the criteria used to determine a FAAB bid? There have been many essays written on this, but in simple terms…

• Impact of the player on your team’s standings.
• 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.

So what should I bid?? Here was my thought process:

1. For starters, I expected that Shelton would generate the most activity. Given that my needs were on the other side of the standings, I decided to restrict my own bids to the pitchers in the group.

2. There were at least 3-4 teams behind me in the pitching standings, but all of them also had offensive deficiencies. I figured that they would likely split their bids between the available bats and arms. In doing so, I might be able to slip in a reasonable bid for a pitcher and still have a good shot at acquiring one.

3. While there were some intriguing possibilities, none of the players were sure things. Typically, players who are guaranteed playing time and have reasonable upside will generate $20-plus bids in this league. I did not see that happening here.

4. Beyond that, I didn’t have a clue what to bid. But that was okay, because assumptions 2 and 3 would turn out to be faulty anyway. It’s very dark in here.

So, I carefully crafted (ha!) a bid submission that looked like this:

CLAIM TWO (2)
=============
Chad Gaudin ($11) #OR# Sidney Ponson ($5)
(If I get Gaudin, skip Ponson)
Chad Orvella ($6)
Ambriorix Burgos ($0)
Joel Peralta ($0)
Scott Sauerbeck ($0)

Frankly, I like Gaudin. He was on our sleepers list coming into the season, was putting up solid numbers in Triple-A, and had a decent debut start (regardless of his second start meltdown). A pitcher has to be pretty good to generate a double-digit FAAB bid in this league. But how did the other owners view him? I checked over their other websites (admittedly, a competitive intelligence exercise not everyone can do) and the consensus was not that far off from mine.

As for Ponson, I couldn’t ignore him as any starting pitcher has value for his strikeouts alone. Still, I did not want him and Gaudin. Given that he had been cut the week before, I assumed his value would be pretty low.

Orvella was a token bid. Potential closers will generate good interest, but I needed a starter more. The remaining bids were just so that I’d get someone to replace the recently demoted David Bush.

Just as I was about to click SEND on my e-mail, I decided to click Gaudin up to $13. I don’t know why I did it other than the fact that I have the dough. Heck, I’d go higher if I had to, but I don’t want to waste precious FAAB and, well, I don’t know if I have to.

The relevant results (in order of winning bid amount, with winning owner listed first):

Chris Shelton: Erickson $21, Grey $17, Peterson $15, Berry $11, Moyer $11, Siano $10, Fogel $6, Sheehan $3
Chad Orvella: Michaels $17, Wood $14, Berry $6, Shandler $6
Chad Gaudin: Erickson $14, Shandler $13, Peterson $5, Sheehan $2, Grey $0
Sidney Ponson: Siano $10, Berry $5, Shandler $5, Peterson $1
Mike Morse: Siano $6, Peterson $5, Sheehan $4, Wood $2, Moyer $1, Grey $0
Brent Abernathy: Siano $6, Wood $4, Moyer $1
Joel Peralta: Wood $3, Shandler $0
Ambriorix Burgos: Berry $0, Shandler $0
Scott Sauerbeck: Shandler $0

I could have, and would have gone to $15 for Gaudin. But a blind bidding system never gives you that chance. Of course, Jeff Erickson might have gone higher as well, but this type of process prevents any true read on market value. What’s more, there was never any way to anticipate that Erickson, though in last place overall, would spend nearly half of his remaining FAAB on two minor league call-ups with only moderate short-term potential. Who knew?

In tandem with this column, Lawr Michaels wrote his own perspective on FAAB: “I am not so much thinking of FAAB as a plus or minus; rather as a fact of life. Given that, it is amazing how close all the bids really were.”

I take issue with anything being a “fact of life” in this game. However, I’ll admit that it is amazing that most of the bids last week were close. That means we were all in the same value ballpark. It rarely happens this way, though. Moreover, we can never draw the conclusion that the winner of any bid was the owner most willing or most able to acquire that player.

It’s mostly all luck.

And there is more than enough luck already in this game that we should willingly accept even more uncertainty in a process so important as free agent acquisition.

The problem with dissing FAAB is that there are not many good alternatives…

The optimal solution is to have a free agent auction each week, live or online. However, it is tough enough for most leagues to get all their owners together for draft day, let alone a weekly auction.

Prior to the invention of FAAB, free agents were awarded in reverse order of the standings, a process many leagues still use today. The biggest knock against this method is that it unjustly rewards poor performance and does not make all free agents available to all teams. However, many of the drawbacks can be resolved by expanding the size of reserve lists and delaying the first bid for a few weeks into the season. Any other problems are offset by the advantage of promoting parity and keeping more teams interested deeper into the season.

Finally, there is the Vickrey Method. There are numerous articles about this system, but in simple terms:

William Vickrey, a Professor of Economics at Columbia University, proposed that the best system for auctioning off items of unknown value was to have all interested parties submit a closed bid, and then the item is sold at the price of the second highest bidder (or $1 more). Vickrey’s theory was that this method reveals the true value of the commodity. The simple idea may not seem so brilliant, but Vickrey was awarded the Nobel Prize for Economics (and $1.2 Million) in 1996 for his work.

Of course, even Vickrey would not have made my $13 bid a winner for Gaudin. However, had we been using Vickrey, I would have been less skittish about going higher. The reality is that, in those leagues that do use Vickrey, teams tend to spend more FAAB dollars.

There is an elegance to the concept, but it has been narrowly defeated several times in constitutional votes by both LABR and Tout Wars.

And so we forge on with our imperfect system. Ick.

Despite all of the activity last Friday, the current FAAB standings in Tout Wars do not provide me any more of an advantage than they did last week.

TEAM              FAAB$
================  =====
Shandler (BHQ)    $ 96
Peterson (STATS)    96
Berry (TMR)         85
Fogel (USA Stats)   82
Walker (WSJ)        76
Sheehan (BP)        68
Moyer (BIS)         63
Michaels (CS)       59
Siano (MLB.com)     54
Wood (LongGandhi)   29
Erickson (Rwire)    20
Grey (Mastersball)  17

Perhaps this is not such a bad place to be. Placido Polanco will be this Friday’s plum, but I don’t know whether I’ll bother unless he decides to take his place on the Comerica mound every 5th day. Of course, I could also sit on my fortune and just wait. That’s not the advice I’d typically give (“Spend early and often.”), but my track record this season is not encouraging. The one piece of information missing from the above chart is the fact that, for the $4 I have spent, I’ve bid on 27 players this season.

So I clearly don’t have a read on the market. That would make me a poor fantasy player in terms of our wonderful FAAB system. But it also puts me nearly first in line should Roger Clemens jump to the American League.

Talk about unjustly rewarding poor performance…