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Deep keeper auction strategies - the long-term contract

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Deep keeper auction strategies - the long-term contract

Postby Sticky Spice » Mon Jan 10, 2011 2:30 pm

It's funny how over the course of time you can go from one train of thought to another... and then back again.

I've been in my 21-team auction keeper since 1993. Contracts are 3-yr and before the 3rd year you can long-term the player for an additional $7 per year (so salary +7 in current year and in next year if you extend one year).

I originally yearned for the day I would get a bargain player and be able to lock him up for what would seem an eternity. That day never came as what bargains I would get would be traded in a money push.

Eventually I decided that I did not like LT contracts except in extreme circumstances. I wanted that extra $7 on draft day. To me the whole purpose of a keeper league is to try to bring in as much undervalue to the draft to give myself the best competitive advantage possible. What is the purpose of having an undervalued player if you are just going to inflate his salary?

Now I've come ... 3/4 circle. If the player is still going to be undervalue and you believe there will be a trade market for him by a rebuilder, by all means long term the guy. I've come to discover that an undervalued keeper is worth far more in trade that $7 is on draft day.

A couple of examples... last year I had Jonathan Sanchez at a buck and declined to long-term him. At the time I felt it was a good idea because even if he continued to improve I did not think he would be seen as keeper material at $8 to rebuilders. I probably made the wrong decision, but I think my logic was correct.

This year I have an eerily similar situation. Jorge De La Rosa at a buck. I think I'm going to make the same decision. Had De La Rosa had another good year last year instead of getting injured I would probably LT him as he would have more name recognition across the league. I think he would have to have a hot and extended start to build up enough trade value to look like a value at $8.

For those with similar long-terming in your deep auction keeper - what are your thoughts?
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Re: Deep keeper auction strategies - the long-term contract

Postby Fenway Punk » Mon Jan 10, 2011 2:35 pm

My thoughts are I'm quite jealous of anyone that can keep a league like this together for 2 years, let alone 17.
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Re: Deep keeper auction strategies - the long-term contract

Postby Sticky Spice » Mon Jan 10, 2011 3:22 pm

It's a league in the Seattle area and so popular that our owners that move stay in the league - NC, MI, AZ, CA, OR. I guess what makes this impressive is that we have an in-person draft.

Also forgot to mention... about the prospective trade of the player you LT. In our league, when trading a future value guy, you generally receive current year replacement value on the player you're giving up, plus compensation for what he's expected to be worth next year. And that's why that $7 is so better spent on a LT contract for one player rather than extra money to play with on draft day.

You can imagine in a 21-team league that there are teams that are in a rebuilding effort quite early.
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Re: Deep keeper auction strategies - the long-term contract

Postby shawngee03 » Mon Jan 10, 2011 3:52 pm

i have been in a 20 teamer w salaries and contacts for 5 years now. max contract is 5 years.....so gusy w salaries below their market value are gold.

Votto at $11 for another 2 years is money...and probably the most valuable guy out there. Linc at $14 is a good one too

almost any young guy w upside and a contract holds value in that league....bc you never knwo who could become that next guy you have for $5 that has $40 value locked up for multiple years. its crazy in our league to see some of the deals made...first rounders who are pretty pricey going for mid round gusy w low contracts. it makes it very fun and unique

so to answer your question from my big league's perspective....long contract anybody who is young w upside. in a $260 cap league $7-8 really isnt that much
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Re: Deep keeper auction strategies - the long-term contract

Postby CincyReds11 » Mon Jan 10, 2011 3:54 pm

Great to see some other dynasty leagues out there, I joined in my Uncle's league about 6 years ago and it's currently going into its 22nd season with 10 teams, NL Only. We have the exact same contract set up, 3 year contracts with a +1yr/+$5 contract value. I'm not sure if this is the case for you Sticky, but for us, extending the player puts him under a guaranteed contract. This means that unless he gets sent to the minors or hits the DL, you are stuck with him. (i.e. just because Barry Zito has been god awful in his stint with the Giants, if someone gave him an extension they can't just cut/FAAB him away as long as he is healthy and producing, no matter how awful that production might be)

Essentially, it's a test of risk aversion and like you, I've recently come FULL circle on the issue. We have a minor league draft where you can stockpile young talent and with only 10 teams you can count on picking up some decent keepers through the blind FAAB system. As such, I've managed to acquire a plethora of young affordable players who over the next two years will be coming into their contract years. In the past, I hated giving extensions beyond 1 year for solid players and two years for studs. I thought the risk was too great and didn't want to get saddled with an albatross of a contract. However, I extended Wandy Rodriguez from $3 to $8 this past year, locking him up through the 2011 season. As you probably know, he had an absolutely abysmal first 10 or so starts and I was hating myself for it. But the truth of the matter is, if pitchers are underperforming expectations that far, their major league club is either going to DL them because something is wrong, or send them to the minors to rework their mechanics, etc. Giving you the option to void the contract. Much risk there? I think not. As such, I'm planning on locking Clayton Kershaw up with a 3 year extension this year, which, although I'm losing that extra value this season, having his services for the next 4 years more than makes up for the 1 year of surplus value. The same sort of philosophy can be applied to hitters, but they are slightly more risky because of platoon issues and benching as a more legitimate possibility. But in reality, you can really get out of any contract if you want.

Think of it as buying out their arbiration years. There's a reason Jay Bruce and Carlos Gonzalez and Troy Tulowitzki got those insane contracts from their major league clubs this past season. Let's take Andrew McCutchen, say over the next 4 years his market value will be: 20, 25, 30, 30. However, his option year is the $20 season and you have him on a $5 contract. Now, if you choose to just keep him and soak up the $15 surplus you make out with that money alone. However, if you extend him through the 4th year, making him a $20 player, you get no surplus value this year but you get +5, +10, +10 for a total of $25 surplus value over the contract life. Given he will likely go over market value in the auction anyways because of inflation due to extensive keepers, this probably understates the value gained by extending him by perhaps as much as $10-$20 more dollars. Lock up your money in known quantities and pay for the guys you want in the auction. That's my 2 cents at least.
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Re: Deep keeper auction strategies - the long-term contract

Postby Sticky Spice » Mon Jan 10, 2011 4:38 pm

CincyReds11 wrote:Great to see some other dynasty leagues out there, I joined in my Uncle's league about 6 years ago and it's currently going into its 22nd season with 10 teams, NL Only. We have the exact same contract set up, 3 year contracts with a +1yr/+$5 contract value. I'm not sure if this is the case for you Sticky, but for us, extending the player puts him under a guaranteed contract.

Let's take Andrew McCutchen, say over the next 4 years his market value will be: 20, 25, 30, 30. However, his option year is the $20 season and you have him on a $5 contract. Now, if you choose to just keep him and soak up the $15 surplus you make out with that money alone. However, if you extend him through the 4th year, making him a $20 player, you get no surplus value this year but you get +5, +10, +10 for a total of $25 surplus value over the contract life. Given he will likely go over market value in the auction anyways because of inflation due to extensive keepers, this probably understates the value gained by extending him by perhaps as much as $10-$20 more dollars. Lock up your money in known quantities and pay for the guys you want in the auction. That's my 2 cents at least.


Yes, guaranteed contracts in our case.

Your league is much different than mine, but I know why. In order to cut down on the number of insane contracts that seemed to perpetuate some atrocious dump deals we made a few rules. The two that apply to this conversation are that farmed players start out at $7 and may not be long-termed. I know this sounds like a horrible idea and contradictory to the entire premise of farming a player, but we had to do it to save our league from all the bad feelings from dump deals. We were also tired of waiting five years for a player to hit the auction and get market value. The other is more innocent - we don't have a FAAB system and free agents are slapped with a $10 salary. So LTing is certainly rarer in our league.

We also had an incident one year that scared everyone away from getting too greedy. A guy added three years to Ben Grieve's contract :-X One of the most infamous moves in our league's history.

Your point about how much you save over the life of the extension is valid, but equally valid is the point that if you are going all out to win first place you don't want the extra baggage. In this case the goal is to go into the auction with as much undervalue as possible.

Just bringing that up as a point and not an opinion. In my 17 years in the league (it's actually existed for 19) I have had 11 top-five finishes, but only one of those was a first place finish. Take another guy in our league who has been in for about eight years and has three championships. He is constantly on the two-year plan - build up one year, win the next, build up, win, etc. I prefer to have fun and compete every year. His way is certainly more lucrative (1st place approx $2700), but you have to do it right and have some luck.
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Re: Deep keeper auction strategies - the long-term contract

Postby fast dogs » Mon Jan 10, 2011 7:19 pm

I would NOT long term DeLaRosa
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Re: Deep keeper auction strategies - the long-term contract

Postby CincyReds11 » Wed Jan 12, 2011 6:14 pm

I admire your changes and that would certainly lower the incentive to extend players. The farm system is by far the best way to acquire talent for our league, at least in my eyes. I've consistently been able to draft players who are on the brink of ML service time and turn them into valuable assets for either championships or trade bait. Sure wish I hadn't dealt Bumgarner from last year!

Another important factor to consider when extending a player is the tastes of your leaguemates. If you have a big time Rockies fan in the group for instance, touching on the De La Rosa example, it might be worth it to extend him, especially if he's in a position to contend. De La Rosa would be doubly valuable to him. Matthew Berry preaches this alot and just knowing your league can go a long way. I hail from Ohio and pretty much all of my competitors are huge Reds fans. Needless to say, I may be looking to sell high on Jay Bruce in his contract year if he can improve on his production. I'd be interested in your draft strategy as well Sticky. How big are your rosters and how much turnover do you generally get?
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Re: Deep keeper auction strategies - the long-term contract

Postby Sticky Spice » Wed Jan 12, 2011 10:21 pm

Our rosters consist of 14 hitters 10 pitchers and a 2-man taxi.

By turnover do you mean roster turnover? Any team that finished in 5th place or lower the previous season can freeze 15 guys. Of course most don't have 15 to keep or "topper rights" help make up their 15 (which means they're in the auction anyway).

My strategy in recent years has been to buy big on offense, cheap starters, and assume I'll be replacing weak positions through free agency or trade. My most depressing seasons have been the ones where I didn't have a legit offense, and my top priority is to have a blast. Chicks aren't the only ones that dig the long ball.

But you're probably referring more to the topic - as I mentioned about what future value tends to bring in trade in our league I've been putting more and more value on players that have two years left on their contracts (instead of one) expecting that I can trade them during the season, or if I suck I can keep them for myself for the following season.

One thing that was new last year was that every single SP sleeper wasn't a sleeper. The entire league sat on their sleepers and prices on SP were not deflated at the endgame. Damn internet ;-)
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