A Quick Guide to Calculating Inflation and Preparing a Freeze List

What is the deal with inflation in fantasy leagues? Though the math is relatively simple, inflation in fantasy leagues is one of those things that never fails to confuse and even irritate fantasy owners. Many owners do not bother to calculate it, with varying levels of success. However I think it is important to do so.

Some Terms to understand

Cost - The dollar amount attached to a player on a roster. (Albert Pujols cost $40)
Value - The amount a player is worth to a team in your league. (Albert Pujols is valued at $51 by BaseballHQ)
Profit - The difference between a players Cost and his Value. (If Pujols cost $40 and is valued at $51 his profit is $11)

What is Draft Inflation
Draft inflation is the cost beyond a players perceived value in an auction caused by budget dollars that exceed the value of the available player pool. A player's inflated value is his projected price on draft/auction day with inflation accounted for. It is important to know this value so you can properly evaluate what it will take to purchase a given player. It will also alert you to potential bargains and warn you of potential pitfalls during your auction.

When to Calculate Inflation
It is smart to calculate inflation frequently because it will change. First an estimated inflation should be calculated before you declare your keepers. This will give you a bit more information on the available player pool and the cost of the players you need and could convince you to change your keeper list. Inflation should be calculated again when the actual freeze rosters are announced. This is the most crucial calculation and will advance your auction prep. Inflation should also be calculated as frequently as possible during your auction. Inflation will change with each player acquisition. I elaborate on in-draft inflation below.

Things to consider before declaring your keepers in an Auction League

• Not every low-priced player is worth keeping. Treat every roster spot like gold.
• Having the best built-in profit going into the draft is nice, but having the most built in value (at the right prices) is more important.
  
• Is there depth in the player pool (or a lack) that might make a certain player worth keeping (or not)?
  
• Don't look for balance in your keeper list, instead look to maximize value.
  
• Consider the long term value of your players and also their cost as they develop. It may be more effective to place a player back into the draft and buy them at a higher price in exchange for a longer contract.
  

How to Calculate Inflation
Inflation equals (money to spend) divided by (value of remaining talent). Multiply each free agent player’s individual value by this amount and you will have the inflated value of each player. Some owners choose to make separate inflation calculations for pitchers and hitters.

In a standard 12-team auction league, with 23-man rosters and a $260 salary cap, there is a total of $3,120 to spend on 276 players. If the owners in our keeper league decide to freeze players with salaries totaling $1,000 but with a projected value of $1,500, then the players remaining in the player pool have a projected value of $1.620. However, the owners now have an extra $500, giving our owners $2,120 to spend on players worth just $1,620. We calculate our inflation by taking the money left to spend divided by the value of the remaining talent or $2,120/$1,620. This results in an inflation of 1.3086, or 31 percent. So if Pujols is valued at $51 and inflation is 31 percent, Pujols has an inflated value of 66.7386 or $67. So if Pujols is the first player called in the above scenario anything less than $67 spent on him should be considered a bargain.

The Per-Player Budget
An essential part of any auction strategy is the per-player budget. This is simply a guideline to the types of players you wish to acquire. On a piece of paper, list the positions required on each roster. Then fill in the names and salaries of anyone on your freeze list (if this is not a keeper league, then you get to skip that step). Next, divide your player acquisition budget amongst the slots with the approximate amounts it will take to roster the players you wish to own. A top outfielder may cost $40, a top-tier closer may go for $35. When all the slots are full and they total the amount you actually have left to spend, you will have completed your per player budget. Spend some time familiarizing yourself with the various players that might fit into these slots, but don’t become too attached to any one player or you could find yourself overbidding to get him.

A proper budget ensures that your team will acquire at least its fair share of the available talent. If there is $1,620 worth of talent available for 12 teams and we assume the freeze lists hold equal amounts of talent (a horrible assumption, I know) each owner must acquire at least $135 worth of talent to stay equal to their rivals. Thus, you must strive to use your remaining money to acquire talent as far exceeding that amount as possible.

In-Draft Inflation
Every auction has moments when players are either being overpriced or going at bargain prices. It is vital to your success that you understand when these periods are happening. In-draft inflation can be tricky to get a handle of when you are trying to track your draft and the rosters of your opponents. The easy way to monitor it is to use a program like RotoLab or Diamond Draft. The software will track the inflation in your auction every step of the way.

However, if you are forced to calculate it by hand, you can use my convenient shortcut. After the first player purchase, jot down how much above or below value (according to your projections) that player was. Do the same for every player that follows – adding or subtracting the difference in dollars. This will leave you with a running tally of how much above or below value the auction is at any given moment. If the number is a large positive value, then players have been overpriced and bargains are about to ensue. If the number is a large negative, the players have been bargains and the correction is coming soon. If the total stays at or just above or below zero, players are going almost exactly as you projected.

An Example from the Mailbag
I received the following e-mail from a reader. The message has been slightly edited and the names changed to protect the innocent...

I had an amazing team last year and was crushing my league all season until a traumatizing final day of the season comeback by the guy in second place where he gained 8 points and I lost 3...

In our league we can select 4 players to keep. Traditional logic would say that I should keep Wandy Rodriguez ($1) Ubaldo ($1) Tommy Hanson ($3) and Aaron Hill (3$) because they would give me the greatest relative value. However I also have on my team Pujols ($38) Kemp ($25) Ellsbury ($18) and Longoria ($25) who would all present some savings but not as much as the previous 4 I mentioned.

The league also has another weird rule that says that new teams are allowed to select any 4 players who were on a teams roster last year but not kept. I feel like if I go for the first 4 players I mentioned I would be doing well value wise, but the 2 new incoming managers would almost certainly keep the latter 4 who are all superior players but provide less value. How would you pick?

Thanks,
XXXXXX

This does look like a tough decision. The first step is to look at the projected value of each of our potential keepers. (Values are from BaseballHQ.com)

	Player	Cost	Proj. Value	Profit
	Wandy Rodriguez	1	27	26
	Ubaldo Jimenez	1	23	22
	Tommy Hanson	3	23	20
	Aaron Hill	3	17	14
	Albert Pujols	38	44	6
	Matt Kemp	25	38	13
	Jacoby Ellsbury	18	31	13
	Evan Longoria	25	26	1

If we were interested in having the greatest built-in profit we would keep Wandy Rodriguez, Ubaldo Jimenez, Tommy Hanson, and Aaron Hill just as our reader suggested. They combine for a cost of just $8 with a collective value of $90 and a profit of $82. That is a pretty nice group of players to have. But is it the best group?

If we take the four most valuable players we would take Albert Pujols, Matt Kemp, Jacoby Ellsbury, and Wandy Rodriguez. Their combined cost would be much higher at $82 but with a collective value of $140 and profit of $58. This is also a good group. But is it more valuable to have $74 more dollars to spend or $50 more value or $24 more profit? This is a tough question to answer without knowing the league more intimately and having more details on the available player pool.

You could attempt to build a combination of players but I believe the second group is the way to go. The only change I'd be tempted to make would be to substitute Ubaldo Jimenez for Jacoby Ellsbury. This is based on my belief that cheap steals will be relatively easy to come by this season. As you will see when I release the All-Sleeper Teams later this week.