Building Around An Ace

Eric's already thinking about his freeze list:

NL-Only 4x4 keeper-league, 15 protects and up to five minor leaguers.

I have a $41 Johan Santana along with a slew of $20 and under players. All bases are covered category-wise. ($10 Brian Wilson and $3 Mike Gonzalez for Saves. Michael Bourn, Nate McLouth, Lastings Milledge for SB).

Would you keep Santana?

My instinct is yes. But it's important to review a few factors first before jumping forward with a decision.

1) What do you think Santana earned last year?
My preliminary calculations say that he earned $37 last year, which put him decimals ahead of Tim Lincecum as the top starter in the National League in 4x4 formats. The Rototimes Player Rater says that Santana "only" earned $33, which in their rating formula put him decimals behind Lincecum. I don't have access to all of Rotoman's values, but I can tell you that he discounts pitchers even more dramatically: he says Gavin Floyd earned "only" $16, and I say he earned $21. He says Justin Duchscherer earned only $22, while I say The Duke earned $28.

I don't bring this up to insist that I'm right while Rototimes and Rotoman are wrong. That's up to you to decide [though I hope that you've read enough of this blog to agree with me (essentially with Alex Patton) on pricing]. But that decision is kind of your jumping off point.

If you think Santana is worth $37, you're more likely to keep him at $41 than you are if he's only worth $33 - or less, as I imagine he is in Rotoman's formula.

But why would you keep a $37 pitcher at $41?

2) What do you think Santana will earn in 2009?
From 2004-2008, Santana has earned $53, $40, $46, $33, and now $37. He isn't Pedro Martinez or Greg Maddux in their repsective primes, but he is the closest thing to a lock.

If you're conservative, the assumption is that you can ink in Santana for a $30 season in 2009. You probably wouldn't feel comfortable assuming this with any other pitcher in the majors, particularly not after Jake Peavy fell off a little bit last year.

You don't want to take a loss with any player, let alone a pitcher. However, knowing that you're going to get $30 worth of stats from a pitcher gives you more flexibility with the rest of your roster. You can spend less on the rest of your staff and take some gambles you might not have taken otherwise. You can go with a lot of relievers early and use the cushion Santana is likely to build for you in ERA/WHIP and trade for the innings and wins you need later.

You might get a $30+ season from another starting pitcher (six other National League starting pitchers cracked the $30 barrier last year), but are Ryan Dempster and Dan Haren as likely to repeat? Are they likely to outearn Santana this year?

OK, so I've convinced you that Santana is a safe investment. But you still don't want to take a loss on any one player so you're wary. But what if you aren't taking a loss?

3) What is your league's inflation?
I've talked about this point ad infinitum in this space; here is one of the posts where I talked about the impact inflation can have on your roster.

For a player like Santana, there are two ways inflation can have an impact:

Even a low inflation rate can turn Santana into a keep. An 11% league inflation rate turns Santana from a $4 loss into a par player ($37 times 11% equals $41.07). A higher inflation rate, which is more common in leagues like Eric's, turns a player like Santana into a bargain.

This works in terms of the money you have left to spend at your auction as well. If you have $200 to spend in a league with a 20% inflation rate, the players you buy will be worth about $167 if you adhere to the inflation rate. If you keep Santana and have $159 left to spend, you will buy about $132 or $133 worth of players with the money you have on the table. Without Santana, in other words, you'll lose $33 of value due to auction inflation. With Santana in the fold, you'll have lost $26 or $27 worth of value.

That's because you have to spend your auction dollars whether you elect to spend them by freezing Santana or throwing him back and allocating those dollars at the auction. You're still going to lose money on Santana if he earns $37 again in 2009, but you're likely to lose more money on the players you spend that $41 in your auction. With a 20% inflation rate, every $41 spent at auction will bring back $34 in value.

On the whole, keeping Santana is a good idea if your league has any kind of inflation at all. But there are a few reasons you might not want to keep him. I'll look at those in my next post.