Last week, I introduced a concept that generated a bit of a buzz. Starting today and for the next several weeks, I’m going to discuss some reprecussions of ADP Principles of Equivalence, or APE for short. Credit for the name goes to my friend and colleague Ron Shandler of BaseballHQ. Hey, when a guy who built a business in part on introducing the LIMA plan into the fantasy baseball lexicon opines, you take heed.
By means of a brief reminder, APE revolves around the premise that player value is a range, and players within $2 of potential value are fundamentally the same player. If you take the player's projected value and determine what round of a draft that equates to and then multiply that by three, the result represents how many players ranked above and below that players are within $2. In other words, APE identifies a faction of players that are all worthy of being drafted at that spot since they can all be expected to yield a similar return on investment relative to the draft spot.
The first thing that came to mind when I discovered this principle was finally, I have a means to frame my argument when it comes to the notion of scarcity, regardless of the definition. It’s sort of funny, I am about to outline a philosophy I have shared for years. But now that I can frame it within a mathematical boundary, it’s going to make more sense, if not be more believable than the abstract means I have presented it to this point.
One of the difficulties when discussing scarcity principles is there are several applications. Some look at the relative strength of a position and deem it scarce. Others define scarcity by the number of perceived acceptable options at a position before there is a drop-off in talent. So long as the means to account for scarcity is to make sure you get players at specific positions early, APE will illustrate that reaching for said players is leaving potential production on the table, the extent of which you will not always be able to get back.
My definition of scarcity is more technical. Valuation theory dictates that the lowest ranked player at each position needs to be valued at $1, assuming we are talking in auction terms, since auction values can be used as the means to generate a ranking list or cheat sheet for a draft. In order for a position to be scarce, a mathematical adjustment is necessary to force the lowest ranked draft-worthy player to be worth $1.
The procedure to identify scarce positions involves pricing the player pool as if everyone plays the same position and assigning values. You then count up the number of draft-worthy players (those with a value of $1 or more) and determine if there are ample players at each position to fill a legal roster for all the teams in the league. Any position lacking a sufficient number of players is scarce.
In past years, my recommendation has been to not worry about altering the baseline price for a position if there are enough players in every position to legally fill out all the rosters. I have since changed my mind, since as alluded to, common sense dictates that the last player drafted at each spot is worth $1, so the lowest player at each position should be forced to be $1, then everyone else is scaled up accordingly. So basically, when I do my pricing, I don’t even identify scarce positions; it is part of my process to set a distinct replacement level for each position, which forces the necessary distribution of players into the draft-worthy pool. In other words, my definition of scarcity can be attacked mathematically, with the result incorporated directly onto my rankings and cheat sheets.
My approach to a draft is each pick should be considered in terms of return on investment or ROI. The goal is to maximize your ROI at each spot, given that in order to win, you’ll need a net positive return, so breaking even at each spot will result in a middle of the pack finish. As discussed last week, if you graph the expected ROI from the first pick to the last, the slope is not linear. The delta between the early picks is much greater than the middle and later picks.
Those that practice scarcity drafting will reach for a player ranked lower on their cheat sheet, or artificially rank them higher because of the perceived scarcity. My contention is if you reach for a player such that he falls outside of the boundary as defined by APE, you are leaving potential production on the table. I understand those that do this believe they are in fact constructing their roster to maximize ROI later, but I vehemently dispute that point.
The argument most scarcity proponents offer to support their philosophy is to compare their so-called scarce player and a player drafted in an arbitrary round later at a non-scarce position to a non-scarce player drafted early and a scarce player drafted late, each with a similar ADP to their players. I consider this a fallacious contention.
They are basing the comparison on either their rankings or an ADP. Who’s to say my evaluation of the involved players is not different? What if I value my first pick higher and prefer a different player later, one that I value more than that used in the comparison? Not to mention, why does my perceived scarce player have to come from that round? Why can’t I wait until there’s a player at that position at or near the top of my available rankings later?
That last question, my friends is the crux of my entire argument. My assertion is at some point in every draft, there will be a player to fill each position at or near the top of your cheat sheet. At minimum, there will be a player falling within the boundaries of APE at each position there for the taking by the time you finish your draft. In order for this to be true, you need to:
This last point is quite important and could be the key to success with this philosophy. We all have our guys, those we like more than everyone else. Sometimes we may also be faced with the proposition of taking our guy, or filling an open position that others consider scarce, with a player ranked highly on your cheat sheet. This could be the best opportunity to get the desired ROI relative to the draft spot for that position. But if you bypass on your guy, that means you’ll need to find someone else to play that spot, and if you have drafted other teams with this player, that is something you haven’t encountered yet. Being able to best accomplish this is tied to the first and second point above.
So to reiterate, I promise that if you know the players thoroughly, and are patient, there will be a player at each position at or near the top of your cheat sheets. You just have to be keen enough to recognize the opportunity and have the touch to construct a balanced roster by the end of the draft. If you do this, you aren’t assured of the league championship, but I assure you that you will have a stronger foundation to take into the season. Your competitor that reached early left stats on the table. Even if you match them ROI for ROI the rest of the draft, you’ll be ahead. They falsely think they’ll make up for what they sacrificed, but they won’t so long as you combine APE with an open mind and a lot of homework.
To jump ahead a bit, there is more to APE than just taking the best player on the board. You still need to blend APE philosophy with the unique market each draft presents. As an example, even though the implication is to take an outfielder if he’s the top player on your list, I still don’t want to fill all five of my outfield spots early. I want a couple for the later rounds where there are inevitably a bunch of outfielders on the board that are the highest ranked players. I know what you’re thinking; that flies in the face of the scarcity concept discussed earlier. At the end, all the players should be equally lousy. What you need to remember is we all evaluate players differently and because there are more outfielders, there will always be some you like more than everyone else. On your personal cheat sheet, the outfielder ranked at 300 and the shortstop ranked at 301 are the same quality of player, but there is usually an outfielder you have ranked 250 still available – due to the difference in expectations.
Please don’t get hung up on this. In a future piece, I’ll demonstrate this mathematically. After all, you guys seem to respond better to mathematical proof as opposed to some goof saying “because I said so.”