Designing a better league

A 162-game baseball season is a marathon. Unfortunately, among the millions who participate in fantasy baseball, a good portion are sprinters who run out of steam at midseason and tend to limp toward the finish line.

Can we blame them? By August, fantasy leagues are populated with team owners who have no hope of finishing first. Meanwhile, there’s more important things to attend to—like watching crazy YouTube videos or the start of the football season.

Unfortunately, orphaned fantasy teams create havoc. In Head-to-Head leagues, some teams may get into the playoffs and others may miss out on the basis of scheduling luck. In rotisserie leagues, a non-competitive team is liable to give away free points and influence the final standings.

The advent of keeper leagues was supposed to offer some salvation to the sin of negligence by promoting ongoing attention to one’s team. Sleep in September and potentially miss out on a call-up who might help a team rebound the following season. But most keeper leagues tend to exacerbate the problem with so-called “dump deals,” whereby out-of-competition teams trade their superstars for better keeper prospects. Once a team has forfeited their best players, they become even more unlikely to pay attention during the final weeks of the season.

Last week on THT Fantasy, Jonathan Halket covered the controversies surrounding dump trades, but for all the acrimony these trades inspire, I believe the larger issue was missed. Dealing with issues like fairness and free markets is all good and fine, but are we sure that fantasy baseball has set up the right kinds of incentives to drive market participants toward the finish line?

In the last couple of years, I’ve advocated change in the leagues in which I participate. My goal has been to minimize the controversies entailing the fairness of trades, to create a system that isn’t too rulebook onerous, and most importantly, to approach the problem as any good economist would—by focusing squarely on incentives.

Right now, in most leagues, there’s no incentive to compete for many teams. Right now, in many keeper leagues, there’s no incentive for those who find themselves out of competition to hold onto star athletes. That’s the target for improvement.

Here are examples of changes we’ve made in my leagues.

I participate in a 20-team H2H keeper league. Each team has a 30-man roster and an additional reserve list of minor league players. With approximately 760 players on rosters, you wouldn’t expect to find any singular team in this league fielding All-Stars at every position, but thanks to the emergence of “dump deals,” that’s exactly what’s happened in past years.

So we decided to change things this past offseason by instituting a new incentive system. Every team that misses out on the playoffs competes in a consolation tournament. The winner of this tournament gets an extra keeper. In addition, similar to real-life Major League Baseball’s Elias Rankings on free agents, teams in my fantasy league are allowed to cash in superstars at the end of the season for picks in the league’s minor league draft. Of course, in order to have a good shot in the consolation tournament and in order to take advantage of consolation draft picks, teams need to hold onto superstars—not dump them in any trade.

I also participate in a 16-team roto keeper auction league. Similarly, dump deals used to bedevil this league and many teams lost interest.

So we decided to offer any “out of money” team that improves its standing after the All-Star break a discount on a player’s keeper price. For example, Team X buys Albert Pujols for $33. Team X is in last place at the All-Star break. Instead of trading Pujols for Jason Heyward, Team X keeps Pujols and has better luck in the second half, improving his points total by 33 percent. As a result, Team X gets to take 33 percent off the price of any of his keepers. So if Team X wants to keep Pujols, the salary is only $22, making the Cardinals All-Star a phenomenally attractive keeper. This also mirrors real-life baseball, as many free agents become more likely to sign contracts with teams showing competitive fight.

So far, the discount keeper rule has been a wild success. The consolation tournament and draft pick exchange rules have only had moderate impact. We’re still tinkering around the edges to get things right.

If there’s a takeaway here, it’s this: If a dispute comes up in your league, make sure you examine the root causes of the dispute. There are too many legislators and lawyers in leagues, but not enough economists. Considering fantasy baseball is a stats-obsessed endeavor, that’s ironic.

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On another note, I’m holding the first mock draft of the 2010 season. I’m doing this in order to help teams sort through prospective values as they look to trade this year with next year in mind. I’m even giving away a prize. If you are interested in participating, find details on my Website.

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Joel H
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Joel H
So what’s wrong with the “dump deal”?  I’m not sure if you follow MLB, but that makes keeper leagues all that more “realistic”.  Studs go to contenders for prospects every year.  Here’s my situation and we’ve never had problems. 10 team NL only auction league, 8 keepers, and a $280 draft limit which your keepers eat into, with a $100 for FA claims and a team limit of $380 once the season starts. No player can be carried over more than twice with out going back into the auction pool. So why not let the basement teams dump their overpriced… Read more »
Joel H
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Joel H
I can see your point, but there are other things that can be done to mitigate some of those issues.  For example in my league we have the auction where you can spend 280 and additional 100 for FA claims.  Chances are, if you’re dumping, your not dumping people worth protecting compared to their salary.  Therefore a single team isn’t going to be able to get that many studs because it will put them over the $380 roster limit that our league has set. (any empty roster spots cost $50, so you can’t get around it by dropping bench players)… Read more »
Joel H
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Joel H

The capping works great, especially being an NL only league. Our trade deadline is about 2 weeks before the MLB deadline and there are always a couple of big names that come over.  So most people leave a little cap room to pick up someone like Holliday or Lee that comes over.  It evens things up a little bit for the contenders made out trading with the “dumpers” because they have less room to make a bid on the waiver wire.

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