How To Account For Keeper Inflation In Your Auction Draft

If you’re in an auction keeper league, preparing for your draft doesn’t end with producing a dollar value for each player in the player pool. Keeper leagues include keepers (shocker), and those keepers can drastically change the auction marketplace.

The key final step in keeper league auction preparation is adjusting for “inflation.” Inflation in this sense means that because owners are, in theory, keeping players at below their market cost, the relative value of the remaining player pool increases.

An Inflation Example
As a very simple example, consider a four-team league with only two keepers for each roster. The table below shows which players are being kept, at what price they’re being kept, and the “auction value” you had assigned to the player before keepers were submitted.

Team Player Keeper Cost Value
1 John Heymans 12 18
1 Brian O’Brien 15 19
2 Dave Power 18 27
2 Mike Poll 10 22
3 Brent Spurgeon 8 15
3 Mike Hay 11 20
4 Shawn McGeachy 5 10
4 Matt Rego 9 12
TOTAL 88 143

What we’re looking at here is that eight players have been kept at a cost of $88. However, the value you expect those players to produce, based on your pre-draft rankings, is $143. Those players are kept and no longer in the player universe, sure, but your total auction values should have equaled the total budget for the league – there is a $55 surplus here, and while the value those players will produce is out of the marketplace, those $55 aren’t.

In more detail, consider the budgets before and after keepers were submitted:

Team Budget Available Budget Remain
1 260 233
2 260 232
3 260 241
4 260 246
TOTAL 1040 952
VALUE 1040 897
$/$ of value 1 1.06

Before keepers were submitted, you would have assigned auction values to the player pool totaling $1,040, which is the total budget available to the league. After keepers were submitted, however, the player pool contains just $897 worth of value (the total value less the keeper values above), while the total budget remaining is $952. Again, there’s that $55 of surplus we saw in the first table.

In short, there are now $952 chasing just $897 worth of value, meaning each dollar of production now costs $1.06. The supply has been reduced, demand remains unchanged, and so prices increase.

So what do you do with this information? Well, in the most basic way, you can simply multiply all your auction values by $1.06, which will do the trick. There are more complex ways of doing this for deeper leagues and/or those with many keepers, ways that would include the impact of positional scarcity (for example, if seven of 10 teams keep a second baseman). But for today, we’re looking at simple auction inflation.

What You’ll Need
In order to calculate your own inflation index, you’ll need the following:
*The auction values you’ve assigned to each player in the player pool.
*The list of players being kept and their keeper cost.
*Your league settings (budget and number of roster spots).

Step 1: Find the total league budget
This is an easy one. Take the number of teams in the league and multiply it by the budget per team. This should also represent the total value you assigned to players when creating your auction values.

12 teams x $260 budget = $3,120 total league budget= $3,120 total player value

Step 2: Find the value of keepers
This is an easy one, too. Take the list of players being kept, find the auction value you assigned them, and total it up.

60 keepers = (Value 1 + Value 2 +…+ Value 60) = $800 of value

Step 3: Find the cost of keepers
Easy once again. Sum the cost of keepers.

60 keepers being kept = (Cost 1 + Cost 2 +…+ Cost 60) = $500 cost

Step 4: Calculate the remaining budget
Take your answer from step three and subtract it from step one. Here, you’re taking the total budget available and removing what has already been spent on keepers.

Total Budget ($3,120) – Keeper Cost ($500) = Remaining Budget ($2,620)

Step 5: Calculate the remaining value available
Take your answer from step two and subtract it from step one. Here, you’re seeing how much production value remains on the market after keepers have been removed.

Total Value ($3,120) – Keeper Value ($800) = Remaining Value ($2,320)

Step 6: Calculate Inflation Index
Take your answer from step four and divide it by your answer from step five. As in the earlier example, you’re taking the total budget available (demand) and dividing it by the remaining value available (supply) to find the new price per $1 of production.

Remaining Budget ($2,620) / Remaining Value ($2,320) = Inflation Index (1.13, or 12.9%)

Step 7: Apply the Inflation Index to your player values
For the remaining players in the player pool, multiply the auction value you assigned them by the inflation index.

Player X = $15 value * $1.13 Inflation Index = $16.95 value ~ $17 value

Partial Dollars
Inflating values is going to leave you with partial dollars in many cases. The general recommendation is to round down for lesser players and round up for better players, as I think most would agree that owners tend to use their surplus budget towards top names, not towards driving $1 players to $2 players. You also have the option to simply keep the decimal place since, after all, your auction values entering the draft probably shouldn’t be set in stone, and you’ll want to remain flexible, anyway. If they’re just a guide, then having partial-dollar values doesn’t really hinder you in any way.

In-Draft Inflation
If you’re in a league that allows for more processing time before each nomination, or have the ability to multi-task in Excel while you draft, you can also apply this same logic as in-draft inflation. If someone spends $35 on a $30 player, they’ve overspent by $5, reducing the overall budget relative to the available value, deflating prices. I’ve tried this before in the past and it’s useful, but it’s not at all paramount – you can get a pretty good handle on over- and under-spending in the draft without this calculation. It can’t hurt, though. Simply have a cell calculating the draft’s total budget available and another calculating the total player value remaining, with a final cell calculating the in-draft inflation – instead of using your pre-draft Inflation Index as the multiplier in your value column, replace it with the contents of this final In-Draft Inflation cell.

Depending on the league, properly accounting for keeper-induced inflation isn’t always going to have a huge impact. If everyone adjusts for inflation, the market moves back into equilibrium, anyway, the same way an increase in total budget would impact the league. However, it’s unlikely that everyone is going to account for inflation properly, giving you an edge on upper-tier players (who could see their price rise $3 or $4), and players in the middle (where an extra $1 could go a long way).

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Blake Murphy is a news editor at The Score, and is a freelance sportswriter covering baseball, basketball, hockey and more. Think Bo Jackson, without the being good at every sport part. Follow him on Twitter @BlakeMurphyODC.

29 Responses to “How To Account For Keeper Inflation In Your Auction Draft”

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  1. David says:

    What are your thoughts on separate inflation calculations for hitters and pitchers?

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    • Blake Murphy says:

      Requires a bit more digging (need to know historical Pitch/Hit budget mix in the league) but if you’re confident that that split will hold relatively close, it can definitely add value.

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    • @CaliforniaJag says:

      I did this on my sheet using a 2/3 split in favor of hitters. Some of the inflation was crazy. This division might cause you to have some very different inflation rates; my base inflation rate is 1.32, but if I divide it between hitters and pitchers it’s 1.45 for hitters and 1.17 for pitchers.

      The best use of this, in my opinion, is to “overpay” for top-level talent that is actually underpriced due to inflation. For example, say Andrew McCutchen was thrown back. Your projections have him valued at $35, but with inflation you have his value at $47. The other members in your league that haven’t calculated inflation probably start to bail around that $35 mark, but you can confidently keep bidding knowing you’re still making a smart buy.

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    • brett says:

      A little late, but after many years of doing this, I don’t buy the separate hitter vs. pitcher inflation idea, for the most part.

      Basically, because there’s no reason the hitting/pitching split should remain constant. Here’s an intentionally extreme example:

      Let’s assume that you’d have a 70/30 split with no keepers, so $936 to be spent on pitchers. Now assume each team can keep 8 players (so 96 total).

      Now, assume that all of the keepers are pitchers, for $1 each (yes, I said extreme).

      There are 12 remaining pitchers to draft, and since they are the 12 worst draftable pitchers, their values will be very low – $1 or $2 each.

      Let’s assume that as a group, these 9 guys are worth $15.

      If we think that the 70/30 split will remain, then there is ($936 – 12 * 8 * $1) = $840 remaining, and it’s chasing $15 of value. Inflation is 5500%.

      Obviously this is unrealistic, but if there players just aren’t there because of the makeup of keeper lists, then teams will shift their money to offense, where the good players are.

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  2. George says:

    One of the greatest articles on this site. kudos Blake

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  3. Clayton says:

    Rotographs is killing it. I’ve saved this link for next year.

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  4. Dan says:

    Good article. A small quibble, though… shouldn’t it only be inflation on the incremental cost over the base cost($1) for a replacement level player? Even at ridiculous inflation rates (200%+) there shouldn’t be any effect on the cost for the baseline guys.

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    • Blake Murphy says:

      Well, if a league allowed partial dollar bidding, it would help separate those guys (their values would vary beyond $1), but yeah, basically, you’re right. The inflation will generally be small enough that “round down for low players, round up for high ones” works well enough.

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  5. Scott says:

    I did this for the first time this year in a 20-team keep 12 auction. Inflation was INSANE to start (up near 20%) but settled down to a more reasonable 10% after the first few crazy overpays went off the board. If you are disciplined enough and don’t have HUGE holes on your roster you can wait out the inflation to perhaps even swing toward the negative and BUY BUY BUY!!!!

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  6. Jason C. says:

    Dave Power? More like Dave Lucky Power. Did you see his HR/FB? Guaranteed he won’t even sniff $20 this year.

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  7. Cuck City says:

    I ran some numbers looking at the 12 and 10 team draft results on Yahoo and Espn(respectively).

    The inflation percentage overall for the top200 players was 16.7%

    There interesting thing was that after the 130th most expensive player was taken, inflation goes to near zero and the last ~50 players (least expensive) actually cost less in the 12 team league.

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    • Jim says:

      Any time you see a player sell for more than his “baseline” value, it can be the result of two things (or both). First, it might be the result of inflation, which can only happen in keeper leagues, and is well explained above. Second it might be because the competitive bidding process is necessitating that owners pay a “premium” for the players that they want. This occurs in keeper and non-keeper leagues.

      On the surface, the two processes appear the same and are most evident in the higher priced players. I’ve only been doing auctions for a few years, but I’ve always feel like a get a deal anytime I am able to purchase an elite player for his “baseline” value plus inflation. This is because I didn’t have to pay a “premium” price that is often associated with elite players. Such a purchase (baseline value plus inflation) actually makes the inflation rate incrementally worse for other owners since an equal amount of money and value is removed from the pool, leaving the same excess money in the pool to be spread out over one less player. Inflation only goes down when players are purchased for more than their inflated prices.

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    • brett says:

      Yahoo and ESPN have keeper leagues?

      If not, then you and the author are talking about different kinds of inflation.

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  8. CBaerga says:

    Any chance RotoGraphs will be publishing auction values?

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  9. murphyluke says:

    What is Team 3 thinking? I would never keep Brett Spurgeon at that price.

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  10. Troy says:

    It seems to me this concept could be better applied to positions than the pool as a whole. If 5 guys keep closers, it is going to drastically increase the value of the remaining closers more so than the calculation for the pool of players as a whole, because supply is restricted in one particular segment, which flows into that entire pool. It’s like CPI, a drought in California reduces their crops, prices go up for Avocados, but not for oranges grown mostly in Florida. Although the total increase for Oranges and Avocados might be 1.06, the increase came wholly from the Avocados, not the oranges. Relating to fantasy, for pitchers and outfielders where the pool is larger the implications of keeper is lessened (the inflation is spread amongst more players). At positions like closer or catcher the effect is greater. In the end what really matters is the value/cost of a roster spot that needs to be filled. A person drinking OJ could care less about the cost of an Avocado. Keepers can make position scarcity exaggerated and the position of your keepers vs the number of fantasy worthy players at that position is good to keep in mind when selecting keepers as well as adjusted for draft costs.

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    • Blake Murphy says:

      You’re 100% correct, and I mentioned doing a more detailed approach like that briefly in the piece. For some, I think, and within the scope of this article, it’s not a realistic approach to tackle properly.

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      • Troy says:

        My question would be how would you apply this to positions like MI vs 2b/SS or CI vs 3B/1B? Would you have two different inflation rates, one for their position and one for the blended on?

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    • brett says:

      This happens, but not as drastically as you’d think.

      You might reason that saves (assuming a 5×5, 12-team league) are worth $312 ($260 x 12 / 10 categories), and if 12 of the 15 closers are kept at $X, then the other 3 closers should be paid an aggregate ($312 – $X).

      (This is making the oversimplication that closers are only good for saves, and their other stats don’t count, but the main point still holds.)

      But think about that. If those 12 closers (assume they get 12/15 of the saves) are worth 12/15 of the money allocated to saves (i.e. $250), but are kept at a total of $100, then that means that $212 is chasing the remaining 3 closers.

      They obviously are not going to go for $70 each – they will probably go for a few dollars more than they “should” but money will be shifted elsewhere.

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  11. Underwood4000 says:

    This comment is just to say this article is appreciated. And to publicly kick myself for not having thought of this before.

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  12. bcmelton says:

    Don’t make the mistake of paralysis by analysis. Figure up your league’s inflation rate as a whole and go from there. The software I use will adjust for inflation automatically (if desired), so I make sure to recalculate after each selection. Doing this should tell you where to focus your spending. Know in advance where you can drive up prices for your league mates and where talent may be scarce. In my league, I kept three closers (Rodney, Robertson, and Perkins) for a total of $11. To name a couple, both Kimbrel and Chapman will be auctioned, so while I don’t “need” another closer, I’ll be certain to help drive their prices up. I’m also good at 2B/SS/MI with Jose Altuve/Everth Cabrera/Starlin Castro for a combined $9. I’ll make sure Cano, Pedroia, and Jose Reyes aren’t cheap, but if one happens to come in below market value, I can put him at U.

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  13. wjylaw says:

    Did a 2nd year keeper auction in an Ottoneu 5×5 on Sunday, and was astounded by some of the prices players were going for. Stanton went for $50, making him the 2nd most expensive OF in our league. For comparisons the following guys had been kept: Trout $56, McCuth $47, CarGo $41, Harper $43, Holliday $42. Kemp went for $38. Austin Jackson, who had been cut at $22, went for $27. Jennings who had been cut at $21, went for $25.

    Verlander cut at $36, went for $38.

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  14. Matt says:

    What’s the general consensus on the best approach once you’ve calculated the inflation amounts for each player? Be willing to pay that much, or acknowledge that they’ll go that high and wait until inflation comes down a bit to (hopefully) win some of the mid-tier guys?

    I’m leaning towards being willing to pay the inflated $ amounts for the top tier guys that are thrown back each year.

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    • bcmelton says:

      The inflation rate tells you Player A’s value in your league at that given time. Going to that price will depend on your team, your needs, and the needs and aggressiveness of the other owners in your league. For instance, my league’s auction was yesterday. I don’t know what our inflation rate was because I use a program that will adjust automatically for inflation, but Clayton Kershaw’s initial value was $42. After keepers were removed and values were adjusted for inflation, once nominated for auction, his value was $64! I had already kept Madison Bumgarner ($28) and David Price ($24) so not only did I not have to have Kershaw, I couldn’t afford to pay anywhere near $64 for him. I wound up bidding on Kershaw against only one other owner, also a savvy owner who did need pitching. I was able to get Kershaw up to $42, forcing the other owner to bid $43 but everyone else had already dropped out before we even got to $40. Subsequently, Wainwright went for $41, Verlander for $40, and Strasburg for $38. Now those are all good pitchers, but tell me who do you think actually got the best deal?

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    • brett says:

      It should really be no different than your approach in a league with no keepers or inflation.

      If McCutchen is worth $35 without inflation, you may be willing to pay that much, or you may want to only pay $2-3 under your price (at least until you get more desperate to spend your money).

      Same thing with inflated prices – if you have 30% inflation so McCutchen is now worth $45 or $46, you can pay that (and know that you’re neither overpaying or underpaying), or you can only go up to $43.

      It’s really no difference. Tracking inflation during the auction can help as well (if inflation is decreasing, then teams are overpaying, and bargains should start coming), but again this is no different than doing the same thing in an auction which starts with 0 inflation.

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  15. wagon says:

    I wonder who has the highest league inflation. By this formula mine was 1.51. I assume people who play in Only leagues have a higher rate.

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    • E says:

      I was also interested in other leagues rates, if only to see if mine’s in line with other similar leagues. I’m in an only league, and mine is coming in around 1.30

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      • brett says:

        My NL-only league (11 keepers, $5 salary increase for every year kept after 3, $5 minimum keeper salary for free agent pickups, 7 round minor league draft) historically always has inflation around 30% (1.30).

        My AL-only league (8 keepers, $5 salary increase for every year kept after 2, $1 minimum keeper salary for free agent pickups, 4 round minor league draft) is usually between 20 and 25%.

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