Part III: Dollar Values

This is Part III in a series describing the methodology the Price Guide uses to come up with dollar values for players. If you haven’t already done so, you might be interested in reading Part I (standard scores) and Part II (positional adjustments) to see what we’ve done so far.

The final step in figuring out player values is to convert our values into dollar amounts. The example we’ve been working with is a standard Yahoo league–12 teams, 5×5, 9 hitters and 7 pitchers. For this last step, let’s also assume that each of the 12 teams has $260 to spend on starters at the auction, with a $1 minimum bid.

Since everyone has to spend at least $1 per position, we know there will be $16 per team that is essentially reserved from bidding. That gives everyone $244 marginal dollars to work with, and the league as a whole $2928 to spend.

We also know that if we add up the value of all of the “draftable” players (i.e. those with a positive value after the positional adjustment) we have 529 units of value that will be bought at the draft. Knowing the total amount of money and the total amount of value, we can set up this formula to determine the money each player is worth:

$ = (player value / 529) * $2928 + $1

Dividing the player’s value by 529 will give us a percentage of the total value that that player represents. We multiply that percentage by the total marginal money at the auction to get that player’s percent of the money. The $1 added on the end is what we reserved as the minimum bid for each player.

In Part I, we calculated David Wright’s value in this league at about 7 units. After the postional adjustment in Part II, he ended up at about 9.6. Plugging that value into our formula:

$ = (9.6 / 529) * $2928 + $1 = $54

The results are what we would expect for our last players picked, too. In this league Jorge Cantu ended up as the replacement level 3B, worth 0:

$ = (0 / 529) * $2928 + $1 = $1

So the last player goes for $1, which conforms to what actually happens at the draft.

The 70/30 Split
It’s an accepted rule of thumb in fantasy that about 70% of money should be allocated for hitting, and the remaining 30% saved for pitchers. Why didn’t I split the money up that way when I determined the dollar values above? The short answer is that I didn’t have to.

If you use this method to calculate dollar values for all of the players, you will find that 64% of the money ends up allocated to hitters, and the remaining 36% goes to pitchers. For a traditional roto league with 14 hitters and 9 pitchers (AL-only, NL-only, or mixed), the split winds up right at 70/30. The Price Guide displays at the top of the results how the money ends up being allocated between hitters and pitchers, and it is usually pretty close to what you would expect.

So don’t worry about the various explanations as to why two-thirds of the auction money goes to hitters; the split is just a function of how players are valued. The numbers confirm what fantasy players already knew, even if they haven’t understood why.

That sums up most of what goes into the Price Guide. The only thing left is something I hinted at in Part I, when I mentioned using the best 108 hitters. In Part IV, we’ll look at how we managed to come up with the top 108 hitters, even before we ranked the players.

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