Dynasty - The Value of Future Seasons (1 Viewer)

[I was in the pool]

I consistently think about how to value players in a long-term environment like keeper and dynasty leagues. To that end, I would like to open up a discussion: if you used an equation to calculate player value, how would you weight each season?

Here are a few examples I can think of.....

More of a redraft-like mindset may say 60-30-10 for the next three seasons.

Some may say 30-20-20-20-10.

Others may think that every season should be weighted the same, like 20-20-20-20-20.

Another point of view would be to value seasons equally all the way out until a player's QYR (quality years remaining) is gone.

As a poster (and reader) of this thread, I only ask that one be open to the idea that another's differing viewpoint is not wrong, just different, and that the discussion is more important than any single perspective.

 

[cheese]

Good topic.

Lots of "right" answers here, but I'm at least a 60-30-10 guy myself, with the 10 really being every yr beyond yr2.

There are multiple factors at play here so people may want to specify. Some people go short term because X% of dynasties (I don't know the real number) fold by yr3, so playing for yr3 carries additional risk. Others will go this way and point to the increased element of the unknown for each player the further forward you look. Others go short term because they think veterens who provide short term value are always the most value relative to price. Others just can't stand the idea of not competing for a championship right off the bat and can't wait around to be good. Long story short, every one of those applies to me which is what leads to my extreme dynasty strategy which is only marginally different than a redraft philosophy.

I have no doubt there are just as many different reasons why others go the other direction.

 

[Shutout]

I would think it would actually have at least two axis', with the second line being age.

So, A guy like Reggie Wayne may be:

75-20-5 because his age is

34-35-36

but a guy like Julio Jone might be:

20-30-50 because his age is

23-24-25 (and factoring that that 3rd year is probably going to be year one without Roddy AND Tony).

 

[smashingsilver]

If I were to quantify it, I would say I run off a 30-30-20-10-10 basis. I evaluate year one and two the same, and one key reason is trade value. Players with high potential in year 2 generate significantly more trade value than those with expected mid-level or decreasing performance. This allows an owner to potentially flip a player at a later date for more value than they were drafted at. There are other reasons, of course, one looks to the future, but that's a big one for me.

 

[Holy Schneikes]

The net doesn't have to be 100%. IMO, that approach doesn't make sense. You can use a percent to devalue future years and get get a net value. But that net value doesn't really equal "1" if that makes any sense.

So I'm not sure what 60, 30, 10 or any other breakdown like that really mean. Why start at 60 for one thing. I'd say you get full value for what you expect from THIS year, otherwise, what degradation are you looking at?

 

[thriftyrocker]

In startups, my strategy is to go youth heavy, or approximately 0-50-20-20-10. My opinion is that owners in startups typically don't value youth as much as they will after the draft is over. Instead they are focused on making sure they have a complete competitive roster.

If the startup worked, I can switch to being more aggressive. By Y2 everyone is on more of an equal footing. Ideally I already have youth and am just looking to fill a roster hole or two.

 

[SSOG]

I'm a 20-20-20-20-20 guy. In my mind, every season is equally valuable.

Now, this isn't to say that if one guy is a rookie, and another is a high school freshman, and I think they're perfectly equal talents, that I'd value them the same. That's silly. Uncertainty is a real thing, and you need to discount for it. The rookie has already made the NFL, while the high school player hasn't- he could get injured, join the army, get into drugs, or get hit by a meteor. If my expectation is that he's every bit as good as the guy already in the NFL, I need to discount that expectation based on the uncertainty involved with future seasons.

In addition, roster spots have value, and every year you have to carry a player brings with it an opportunity cost. If scientists cloned Calvin Johnson and then cryogenically froze him with the intention of thawing him in 10 years, I would value frozen clone Calvin less than thawed original Calvin, simply because frozen clone Calvin would tie up a roster spot for 10 years longer than thawed original Calvin (and, of course, there's uncertainty- maybe the NFL folds, or the forward pass gets outlawed).

Finally, sometimes future seasons should be devalued in dynasties that are not as stable, because again there is an uncertainty discount. If I'm in a dynasty league where everyone is at everyone else's throats and the entire league is seconds from crumbling, I'm valuing this season at close to 100% because who knows if there'll even be a next season.

All of this boils down to two things, though- uncertainty and the time value of a roster spot. There is nothing inherently less valuable about future seasons than present seasons. If I had a magical crystal ball (to remove the uncertainty) and played in a rock solid league with unlimited roster spots (to decrease the marginal value of a roster spot down to zero), then my first pick in any startup draft would be whatever guy was going to break Jerry Rice's records, even if he was only 8 years old right now. If the goal is to maximize championships (and to me, it is), then production in 2016 is not worth any less than production in 2013. Production in 2016 is a lot harder to predict, but not any less valuable.

 

[matttyl]

I would think it would actually have at least two axis', with the second line being age.

So, A guy like Reggie Wayne may be:

75-20-5 because his age is

34-35-36

but a guy like Julio Jone might be:

20-30-50 because his age is

23-24-25 (and factoring that that 3rd year is probably going to be year one without Roddy AND Tony).

And put the two together. If you have Julio as your "#1WR", than maybe Wayne as your #2 would be 100-0 (whatever you got after this year you just view as a bonus).

Another example:

I'm in a 10 team start 1 QB league and have Rodgers as that QB. All the other rostered QBs I have (Flacco and Tanny) I view as 10-10-80 type of guys cause I don't need them now. I might need them later. If they "blow up" like Kaep or Wilson did last year, I'd likely just trade them. Having Rodgers on my team, I really have no need for QBs over age 33, so I can't view a guy like Brady or Peyton Manning as a 10-10-80 type of guy.

So my views on #2 and #3 and further depth is predicated on my #1 and #2s.

 

[squistion]

50-30-20 or maybe 40-40-20

Good enough to make a serious run the first year, but hopefully peaking between years two and three. And my teams are not old - in a typical roster of 24, rarely there are more than 2-3 players in the twilight of their careers.

 

[I was in the pool]

The variety of responses even with brief activity in this thread is the real beauty of dynasty leagues....different approaches based on solidity of the league itself, pre-startup draft, then as an existing team making moves.

 

[FUBAR]

In startups, my strategy is to go youth heavy, or approximately 0-50-20-20-10. My opinion is that owners in startups typically don't value youth as much as they will after the draft is over. Instead they are focused on making sure they have a complete competitive roster.

If the startup worked, I can switch to being more aggressive. By Y2 everyone is on more of an equal footing. Ideally I already have youth and am just looking to fill a roster hole or two.

I pretty much agree with this approach. While in established dynasty leagues, my value depends on my goals. In one, I have one of the best teams and want to win now. So my value is closer to 60-30-10. In another, I more or less know I won't compete this year, so my value is closer to 10-30-30-30. Begin with the end in mind.

ETA: I'll also value positions a bit differently. I'll value a QB's future years more than a RB's, mostly due to risk.

 

[ghostguy123]

Too many variables in this..........I gotta take everything on a case by case basis, and also based on my roster.

But generally, especially regarding draft picks, I value them about the same no matter the year. I have collected a lot of future 1sts that way, since people love to have lesser picks "now"

 

[Dave Larkin]

I'm on board with the mindset that although dynasty leagues, by their very nature, are meant for the long term, the goal should always be to put your team in the best position to win now. The uncertainty associated with future seasons will always exist, but so will the uncertainty for the season to come. At the end of the day, we are projecting. It is easier to project short-term value than it is long-term value, of course.

So to answer the question posed in the thread, while I don't devalue future seasons as SSOG alluded to in his 20-20-20 et al model, I would probably go with a 50-25-25 model for the next three seasons.

This is a great discussion topic, though. Kudos.

 

[SSOG]

I was thinking about this some more last night, and I thought of a thought experiment. Is there anyone at all who won a championship in 2006, but would have traded it in a heartbeat for a championship in 2005, instead, since 2005 was more valuable? Is there anyone who, with the benefit of hindsight, would have drafted Michael Vick over Drew Brees in the 2001 rookie draft? Or Alex Smith over Aaron Rodgers? Is there anyone who wouldn't have taken guys like Jamaal Charles, Larry Johnson, Roddy White, or Vincent Jackson with top rookie picks because they all sat or stunk for a couple of years? Is there any way in hell that if we replayed the 1997 rookie draft, someone would take Corey Dillon over Priest Holmes?

I think with the benefit of hindsight, the fact that no year is any more valuable than any other becomes much more obvious. I would gladly burn a roster spot for 4 years if it meant that I got Priest Holmes through his entire prime carrying me to championships. In hindsight, everyone seems to agree that the best pick was the most productive guy, not the most immediately productive guy. I'm sure we all wish we "overpaid" for Rodgers when he was sitting behind Favre, or "overpaid" for Kaepernick in our 2011 rookie drafts. Looking forward, though, I think we often lose sight of that. We seem to always be willing to sacrifice future value for immediate returns, figuring we'll deal with the consequences when they come due and reminding ourselves that the only year you can win is the one you're currently playing. I think that mindset, over a long enough timeline, has serious costs to our roster. Obviously there are times when it's smart to do that- you always want to be shifting value out of non-contending years and into contending years, for example. And, again, uncertainty is a very important consideration- I don't want to value Peyton Manning over a 5-year timeline when I don't even know if he'll be playing in 3. But sometimes the short-term asset is just as uncertain as the long-term one- a random 1st rounder in year n carries no more uncertainty than a random first in year n+1 (outside of the league folding before you get to year n+1). And, really, how much uncertainty actually surrounds a guy like Calvin, Rodgers, Green, or Gronk? I'd wager with a pretty high degree of certainty that they'll still be studs in 3 years, so why should I discount year 3 in favor of year 1?

 

[Mr. Irrelevant]

And, really, how much uncertainty actually surrounds a guy like Calvin, Rodgers, Green, or Gronk? I'd wager with a pretty high degree of certainty that they'll still be studs in 3 years, so why should I discount year 3 in favor of year 1?

There are (at least) two answers to this question:

1) Because your risk-weighted holding cost is never zero. It may be small (and you may believe it to be smaller still), but it is never zero. Don't believe me? Try to get approval for a business loan from any bank in the world, or for a capital request from any business in the world, by assuming a risk-weighted cost of capital of zero - you'll be laughed out of the room. Well, your assets in dynasty leagues are your players, and they should be viewed like any other asset - by assuming each unit of return (in this case, each point scored by them) next year is more valuable than that same unit of return in 3 years.

2) Because that's the way your fellow owners generally think. Players' value isn't determined solely by what their production will be in year n, but also by what their trade value will be at the end of (or during) year n. Whether or not you think Calvin will be exactly as much of a stud in 3 years' time as he is today, your fellow owners will envision a guy who'll be 3 years older, with 3 more years of NFL wear-and-tear on his body and hundreds more hits absorbed. And, for trade purposes, they'll discount his value accordingly (and, in my mind, appropriately).

I haven't even gotten into "tail risk", which you've kind of assumed away in your analysis as well. But that's a separate topic.

 

[SSOG]

And, really, how much uncertainty actually surrounds a guy like Calvin, Rodgers, Green, or Gronk? I'd wager with a pretty high degree of certainty that they'll still be studs in 3 years, so why should I discount year 3 in favor of year 1?

There are (at least) two answers to this question:

1) Because your risk-weighted holding cost is never zero. It may be small (and you may believe it to be smaller still), but it is never zero. Don't believe me? Try to get approval for a business loan from any bank in the world, or for a capital request from any business in the world, by assuming a risk-weighted cost of capital of zero - you'll be laughed out of the room. Well, your assets in dynasty leagues are your players, and they should be viewed like any other asset - by assuming each unit of return (in this case, each point scored by them) next year is more valuable than that same unit of return in 3 years.

2) Because that's the way your fellow owners generally think. Players' value isn't determined solely by what their production will be in year n, but also by what their trade value will be at the end of (or during) year n. Whether or not you think Calvin will be exactly as much of a stud in 3 years' time as he is today, your fellow owners will envision a guy who'll be 3 years older, with 3 more years of NFL wear-and-tear on his body and hundreds more hits absorbed. And, for trade purposes, they'll discount his value accordingly (and, in my mind, appropriately).

I haven't even gotten into "tail risk", which you've kind of assumed away in your analysis as well. But that's a separate topic.

Yeah, I phrased that poorly. I wasn't trying to indicate that I wouldn't apply any risk discount at all to Calvin and his ilk, I was trying to indicate that I would apply a substantially lower risk discount to Calvin Johnson than I would to, say, Mike Wallace (hence "pretty high degree of certainty" and not "absolute certainty"). I agree that risk is ubiquitous, and expanding timelines increases risk (even beyond the player himself- there is a nonzero chance that the NFL or your dynasty league will fold in any given year). I was more trying (and failing) to opine that the risk discount was not symmetric across the entire player pool.

As far as trade value... in theory, a player's "true value" to your franchise at any given moment will be whichever is greater between his "performance value" (how many points he'll score for you and what those points will be worth) and his "trade value" (how much value you could convert him into if you traded him). You can further complicate the concept by adding in factors like how that player's presence impacts roster construction and the value of the roster space that he's going to take up, but at its simplest, that's what player value boils down to. If a player's trade value never exceeds his performance value, then you should never trade him, and his trade value will never be relevant to discussions of how he should be valued. Even if a player's trade value does outpace his performance value, his performance value offers a very nice floor on the amount of value you'll be able to recoup from ownership. If I'm enamored with a player's "performance value", then his trade value doesn't carry nearly as much weight in player valuations. Calvin is a guy like that- sure, I would love if he always carried top-notch trade value, but really that only matters if and when I decide to trade him, and if he doesn't carry commensurate trade value, I'm perfectly comfortable continuing to ride out his performance value, instead.

 

[BWill]

Trent is the ultimate player to own in a deep dynasty league right now. (entering that Priest Holmes prime you mentioned before... )I bombed my team two years ago to take Trent and RG3 (kind of wish I went Andrew luck, but I turned around and traded RG3 for Cam, Crabtree and Steve smith (I was in need of WR) so I can't complain. Before I took Trent and Rg3 my vision was 2013... Then about three weeks in when I realized that I had no chance to compete, I focused on 2014. In a 20 team dynasty league, I have 3 out of 5 championships (been going on since 2002)

I keep my outlook of production within 1-4 years. NOW I'm focused on only this and next year since I need 2 championships to take the league. Just rolled the dice on Britt. I got Crabtree as my #1 and Jon Baldwin as my #3.