Arbitration by Team Rather than Player

A plea was recently posted on the message board of one of my ottoneu leagues:

To the 4 owners who allocated a total of $9 to my team, keep in mind that it’s strategically sub-optimal to spend more than $1 on a non-contending roster.

Posted by the last place team, this argument seems perfectly logical and in most leagues the chances are the top 2-3 teams will get hit by close to $30 in allocations, while last place teams will be closer to $15-$20 (we’ll confirm this once allocations are done). But in reality this is an overly simplistic way to look at allocations.

Last year, in the original league, the team Gerbils on Speed finished in 10th place with 20 points and then immediately got hammered in arbitration. Definitely broke the pattern talked about in the intro, but with very good reason.

Despite the bad hit in arbitration, the Gerbils improved by 72.5 points this year, cracking 90 and running away with first place. The bad hit in arbitration was not “strategically sub-optimal” in this case. If anything, we should have done more to slow down this formerly cellar-dwelling team.

And now, coming off such a dominating season, there is good chance that fewer dollars get allocated to the Gerbils this year than last. Instead of having a roster filled with low priced talent, as he spent all of 2012 acquiring, he now has a bloated $523 in salary commitments and his supposed best arbitration target – a $7 Matt Harvey – has not had a single dollar allocated to him, as the other owners are waiting to see how he heals.

Now, don’t get me wrong – the Gerbils are still going to be near the top of our league in dollars allocated. And the owner who posted the aforementioned plea is right – putting a ton of money against his team does not make sense. But it is not a simple case of looking at the standings and allocating more at the top and less at the bottom.

You should be more focused on projected standings in 2014. Is there a last place team that spent all of August selling production for potential and is about to go into 2014 with a loaded roster and a ton of cap space to fill in the gaps? That might be the team that deserves your $3 allocation. Did your league champ take the title by packaging any cheap talent to load up on $50 stars? They probably have to blow it up anyway, so why waste your money allocating to them?

While considering 2014 potential, you should also realize that different players have different potential values to different teams. The owner who made the plea for his weak roster owns a $21 Adam Wainwright and the fact is, on a first place team or a last place team, a $21 Waino is a steal. He also has a $7 Alfonso Soriano. Soriano continues to produce and a $7 Soriano is probably undervalued, but I feel very differently about assigning a dollar to him on a team that won’t compete than I do on a potential league champ. By the time this team is ready to fight for the top, Soriano will have gone up to $9 or $11 on his own and will have gone from “post-peak” to “pre-retirement.” There is a good chance assigning a dollar to Soriano on a bad team will never have an impact.

Allocating by team rather than focusing on players is totally reasonable. You should still put your dollars on the most undervalued assets, but there is nothing wrong with targeting owners rather than players. Just don’t get drawn into the trap of giving $3 to each of the top four teams, $1 to each of the bottom three, and $2 to the other five – look at what the teams are likely to do next year and focus your scarce allocation dollars on the teams who will be in a position to win next year, not the ones who won this year.

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8 Responses to “Arbitration by Team Rather than Player”

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  1. Brad Johnson says:

    You’re of course correct that teams should allocate towards disrupting 2014 performance, but in my particular case, the roster I inherited still projects for last place. I could legitimately cut 38 of my 40 players without making any individual bad decisions (granted taking that tact would be a bad decision overall).

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    • Chad Young says:

      Yeah, Brad, I am with you. Was not disagreeing with your assessment, just using it as a catalyst to look at the general rule. I think people are too quick to assume there should be a strict relationship between current standings spot and dollars allocated and that is just not the case.

      But yes, your team doesn’t really deserve to get targeted.

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  2. Cardinology says:

    We have a situation like this – we had a team go all Houston Astros and sell off everything that he didn’t have nailed down (cano, kemp, joe nathan, aramis, etc.). He also doled out loans to the teams he was trading with so they could fit his high priced players under their cap. He wasn’t competitive this year, but he now has a lot of bargain priced players and I’m sure he’ll be able to afford several veterans in the auction and make a fairly quick turnaround. I made sure to allocate $3 to his team.

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  3. Dr. Nick says:

    I’ve never played ottoneu, but this made me look up the allocation/vote off system. I guess I’m a little unclear as to why people would like this as a feature. It smacks of sour grapes. If I do work to have a lot of valuable players, I wouldn’t enjoy all the other teams being able to raise my cost.

    Imagine a similar system in MLB… Trout is too good, so the other teams vote to raise his salary to $10M. Although maybe they would have only gone $5M, since the Angels weren’t good.

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    • Chad Young says:

      It’s an interesting question and hopefully some ottoneu players other than me can weigh in with their thoughts, but here is why the system was created:

      First off, MLB DOES have a system like this. Teams get a two-to-three years with a player before the enter arbitration, but in another year or so, the Angels are going to have to pay up to keep Trout. Other teams don’t get to assign those dollars, an independent arbitrator does, but the effect is the same.

      In addition to trying to mimic the MLB system, we wanted to do something that would increase parity in the league and make it possible for everyone to compete. In one of the first years of ottoneu, I made a bunch of trades and landed dirt cheap versions of Hanley Ramirez, Dustin Pedroia, Brian McCann, Prince Fielder, Justin Verlander, Aramis Ramirez, Ryan Zimmerman, and a handful of other players. Had we not had a system in place to redistribute talent (the system has changed over the years and was not the same back then), I basically could have sat back and run away with title after title thanks to having that base and the option to sign basically any free agent I wanted every year. Putting a system in place to move salaries up quicker gives everyone a chance to compete every year.

      Teams that have a bunch of great young talent still get a couple or a few years to utilize it (the core I mentioned above won 3 of the next 4 championships), because other teams can only allocate so many dollars to them. If you only have a $5 Trout, he’ll go up to $35, but if you have a $5 Trout, a $5 Harper, a $5 Myers, a $5 Jose Fernandez and a $5 Matt Harvey, they will all only go up a little bit.

      There are also safe guards in place to prevent any single team from being hurt too much. Each owner gets $25 to allocate but has to give at least $1 to each team and cannot give more than $3 to any team. In most leagues, every team will get at least $15 and no team will get more than $30. Better teams get hit more, but not so much more as to unfairly handicap them – just enough to keep things balanced and competitive.

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      • Dr. Nick says:

        Thanks for the response, and I see your point. I guess with the depth of the rosters, you really could hold an edge for longer than I appreciated.

        Still, I think I’d prefer simple time triggered inflation, or stat based (if you really wanted to mimic arb). Because while you say MLB does have a system like this, the distinction is pretty huge between “independent arbitrator” and your direct competition. So you could have it that the top X% of ottoneu players see Y% inflation, top Z%…

        In many of the leagues I play, the consistently successful teams already feel like everyone is working against them (bidding against them at auction, hesitant to trade, dumping to competition, etc).

        I’m fine with all that indirect stuff, but to know that everyone else in the league can assign me a disadvantage, well, I don’t love that idea.

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      • Chad Young says:

        There are a couple problems with a stats-based increase:

        1) The players who would increase the most year to year are the Miguel Cabreras and Clayton Kershaws, which makes no sense. A $60 Miggy is already a fair price (maybe even over-priced) so having him go up 10% while a $5 Chris Davis also goes up 10% doesn’t really work. It basically means that if you have a star player at full price, there is a 0% chance you will keep him.

        It also creates an implied “official valuation” of all players, which we want to avoid. The subjectivity in player valuation is what makes the market economics of a format like ottoneu work. I can decide what I think player X is worth and you can decide what you think he is worth and that creates opportunity for trades, differing auction values, etc.

        It’s also worth remembering that everyone in the team is assigning dollars to every other team, not just to one team or some teams and that every team si doing so in a way that forwards the interests of their team. If everyone is focused on maximizing their chances of winning, they are, as a result, focusing on minimizing everyone else’s chances, which basically means that every owner is aiming to create parity among the other owners. In the end, the outcome of any system we installed would e (or should be) extremely similar to the outcome that we are achieving here. Having owners assign those dollars is a) more fun than having it done automatically, b) more interesting than having it done automatically and c) easier than having it done automatically. It is also more fair – ottoneu is based heavily in the idea that the free market gets to decide what a player is worth, what his trade value is, etc., and this supports that.

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      • Brad Johnson says:


        You also seem to have an issue with teams who routinely finish at the top of the league being a target. Not all fantasy owners are created equal, some are just better at drafting, put more time into searching waivers, etc. Doesn’t it make sense that better owners are “targeted?”

        The arb process in Ottoneu gives owners the ability to penalize a particular skilled competitor a few additional dollars. It’s like playing with a handicap – if you don’t have a chance to win, then what’s the point of playing?

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