The Z Files: Keeper League Inflation Dos and Don'ts

It's that time. Keeper leagues are gearing up for the 2021 season. Some are first clearing away spider webs after sitting 2020 out. This can mean only one thing: fantasy managers everywhere are misapplying the concept of inflation.

If you play in a keeper auction league, you're no doubt familiar with inflation. Unfortunately, you're probably approaching it wrong.

By means of review, it's the nature of keeper leagues to carry over talent at a price below what the player would cost in an open auction where everyone is available. Since prices are set using a zero-sum economy, if the available players in a keeper league all sold for their projected earnings, there would be a lot of available budget left on the table.

The conventional manner to account for the discrepancy is scaling up bid prices via an inflation factor. The factor is calculated as follows:

• TLB: Total League Budget
• SKFP: Sum of Keeper Freeze Prices
• SKPP: Sum of Keeper Projected Prices

Inflation Factor = (TLB – SKFP) / (TLB – SKPP)

Here's a practical example for a 12-team league with a $260 per team budget.

• TLB: 12 x $260 = $3120
• SKFP: $720
• SKPP: $1200

Inflation Factor = (3120 – 720) / (3120 – 1200) = 1.25 or 25% inflation.

Normal treatment is multiplying the projected earnings of all the available players by 1.25. Now, the sum of the adjusted prices of all the available players matches that which is total available to spend in the auction.

In this scenario, a $40 player becomes a $50 player thus is considered a good deal if purchased for under $50. A $30 player is $37.50, etc.

The only thing right about this process is the algebra. The sum of the bid prices equals the sum of the available funds.

The problem is this is not at all practical and by no means mirrors what almost always occurs. Anyone who has played in an auction keeper league before knows that most of the excess budget disproportionately gets directed at the remaining top-end talent. Anyone following a conventionally adjusted price list would be left out in the cold until they realized they better spend, lest commit the cardinal sin of leaving money on the table.

There actually is a numerical means to better approximate adjusted keeper prices. Without getting too much into the way the sausage is made, projected earnings are based on the proportion a player is expected to contribute. In standard rotisserie, it's a dynamic process over five categories, but for simplicity, let's consider a home run derby auction league.

Let's say there are 10 teams, each with $100 to spend, so there's $1000 of available budget. If a batter projects to hit 2 percent of the total homers in the player pool, he's projected to earn .02 x $1000 or $20. This is an oversimplification, but I want to show the general way earnings are calculated.

In a standard redraft auction, prices are computed using the full $260 and distributed over each team's entire active roster. In a keeper auction, the same process can be done using the available funds and open roster spots. In fact, it can be done after each purchase and there is software capable of doing this on the fly.

By the numbers, what happens is the lowest ranked player remains $1 as opposed to adjusted to $1.25 (or whatever). This may not seem like much, but when you save $.25 on each player in the pool (and this grows as the quality of player improves), the extra budget is naturally funneled to the top end, driving the prices over the conventionally adjusted inflation price.

While the math works out again, this model still falls short of what often occurs in keeper auctions. There's always someone with a perceived great keeper list willing to spend whatever it takes for the top talent. In addition, if the in-season salary cap allows, non-contenders will often pay exorbitant prices for top players then look to deal them.

There isn't an algorithm capable of reading minds. Any mathematical treatment of inflation will probably undershoot the prices at the top end. The effect is to reduce the overall inflation, often to the point of deflation.

I've presented this argument many times, including in this space. The main pushback is the drafter understands what I'm saying, but they still like having inflated prices as a guide. Those using draft software that recalculates inflation are especially fond of their process.

You know what? This is all fine. I know I opened by stating most are misapplying inflation. However, right or wrong, if something makes you more comfortable at the draft table, it's right, at least for you. So long as you understand the inflated prices are elegant algebra and not a telepathic connection between your computing device and the people in the room, it's all good.

My guess is I've done so many keeper auctions over the years it's become intuitive. That said, understanding that inflated prices are flawed and knowing how to handle acquiring players in a keeper auction are two different things.

My favorite way of combating inflation is to keep higher-priced players. The less budget you have to spend, the less you'll have to deal with inflation. As mentioned, the inflation factor decreases as players are purchased at inflated prices, and more budget comes off the board. Keeping salary means you can't afford the top tier. By the time the available players are in your price range, they aren't subject to as much inflation. You may still have to "overpay", but not nearly to the extent those with cheap keepers and tons of budget to spend have to overpay.

Here's a practical example. I know this is contextual, so asking, "Which option do you prefer?" is a bit of a loaded question since I will rig the details to make my point, but take a second to consider which pathway you usually adopt.

• Manager A: Protecting $120 worth of players for $60, $200 left to spend on 13 players
• Manager B: Protecting $240 worth of players for $200, $60 left to spend on 10 players

Manager A has $60 of profit while Manager B has only $40.

Manager A spends their $200 in the following manner:

Manager A leaves the draft with $25 of profit. Manager B also buys 10 players for $60, just like Manager A did with their final 10 players. However, Manager B retains all of their initial $40 profit.

Obviously, the numbers were chosen to make my point, but all of the above is realistic in keeper auction dynamics. At least on paper, Manager B has an edge heading into the season.

The segues nicely into the final point of today's discussion – what makes a good keeper list? Conventionally, with 25 percent inflation, a $40 player is a possible keeper for $50 or less. But here's the thing. Just because it would take (at least) $50 to acquire the player in the auction, keeping him at $50 doesn't make him a $50 player. He's still a $40 player.

I know, I know, we have to "overpay" somewhere to prevent leaving money on the table. Everyone has their own approach; this is my column, so here's mine.

1. Avoid risk with high-priced players

While there are exceptions, hitters are safer than pitchers. If faced with the option of freezing a $30 Jacob deGrom or $50 Mookie Betts, give me Betts, even though deGrom is fairly priced and Betts may be a few bucks overpriced.

2. Protect less available commodities and throw back more available commodities

The commodity can be a position or a statistic. If a bunch of cheap speed is being kept, consider freezing Adalberto Mondesi, even if he's a bit pricey. The exception to No. 1 is if most of the top starting pitchers are keepers, deGrom is now in play as a freeze.

If you expect a hefty inventory of a specific position to be available, you want to have the open roster spot to take advantage of someone going for a good price. If the player you're keeping blocks the roster spot of a potential better buy, leave the spot open.

3. Never freeze a player when there's a good chance of purchasing someone better for the same cost

This is more apropos in shallower mixed leagues than single-league formats. There are always crazy end-game bargains in mixed leagues with 15 or fewer teams. You'll often be able to get someone you project to earn more than $5 for a buck. There's a great chance you have some $1 players on your roster projected to earn $5 or so. Many will see the profit and want the money to spend at the auction, and therefore freeze a few $1 players they expect to return $5. I prefer to throw them back, hoping for a $7 or $8 player with that buck. Worst case is someone projected at the same $5 I threw back. This is just the nature of shallow mixed leagues.

Good luck in your keeper leagues. As always, I'm happy to share my opinion of your potential keepers posted in the discussion section. All I ask is please provide all pertinent details – league format, number of teams, scoring, salary and contacts, etc.