Deciding what to Pay for a Player

So far this winter, I've talked a great deal about my bid price for a number of players. I haven't talked much about how I come to those prices, though, and more than a few readers - including rafi - want to know more.

Can you describe what system you use to arrive at your bid limits?...I know you approach this systematically and mathematically, I am curious how you arrived at that figure? Ultimately it's still projections that set your bid limits, right?

rafi is correct. For the most part, the bid limits spin off of the player projections.

Since the Sportsline auctions are very early, Patton and Company's projections and bids weren't available for me to use as a reality check. So I downloaded CBS Sportsline's and Fanball's projections, put them into an Excel spreadsheet, and used my version of the Patton formulas to calculate what each set of those projections were worth.

In order to minimize outliers, I took the ranking of each projection and came up with a new ranking for each player. For example, Fanball's Jacoby Ellsbury projection had him ranked as the second best hitter in the American League, while Sportsline had Ellsbury ranked 24th. If I had simply used dollar values to rank someone like Ellsbury, the projection would have been weighed too heavily toward the Fanball projection and too little toward the Sportsline projection.

After this step was complete, I then looked at last year's average salaries from Sportsline, LABR, and Tout Wars and plugged these into my hitter and pitcher rankings. For hitters, I simply plugged the bid values into my hitter rankings. For pitchers, I specifically broke them out into starting pitchers, closers, and middle relievers.

This ended the systematic part of the process. Now I started tweaking my bid limits.

Nearly one month after the auction, I don't remember every tweak I made. But I can provide reasons why I made additional adjustments.

Playing time: Rocco Baldelli came out of the mechanical side of this process with a $10 bid limit. Depending on how the Red Sox outfield shakes out and how healthy Baldelli is, he could earn $10 even as a part-time player. But I don't like paying full ticket price for guys like this. I downgraded him to $4.

Position: I'm not a big believer in scarcity, but I didn't like some of the prices I saw on my sheet so I moved a few guys up at catcher and middle infield if their prices looked too low to me. Jhonny Peralta was a guy who came out of the raw calculations with a $16 bid limit. That seemed light to me given how thin SS is this year, so I bumped him up to $19. I didn't do this across the board; if I didn't like a player or thought his price was already fair, it stayed the same.

Risk: There were some players whose bids would have made sense had I been 100% sure that there were going to be healthy, play all season long, and live up to past potential. But we all know that this doesn't always happen. So I tweaked some players - particularly pitchers - down based on this. I think I wound up putting a $5 bid limit on Gavin Floyd, which was probably too low, but I looked at his BABIP and some of his other interior numbers from last year and he felt like a fluke.

Feel/Instinct: This is the final step I take, and usually involves a look at the prices with two simple questions:

• If I got the player at my bid price, would I feel like I was overpaying?
• If another owner got the player above my bid price, would I feel like another owner was getting a bargain?
  

I had Cliff Lee listed at $28 after going through this exercise and that price felt too high. I like Lee this year, but felt like I could get him for less or wouldn't feel bad if someone else got him for $26. I lowered his price to $25. I got him for $19, so I felt like a got a bargain but my instincts were correct; I would have been deluding myself to think that at $28 he was $9 under value.

Feel and instinct are really where your own judgment comes in to play. Alex Patton always recommended using his bids if you were a new player and weren't comfortable making these types of judgments. But you should get to the point where your own gut should tell you where you should stop on a player.