Roster Doctor: freezing keepers

Mark writes:

5×5 11 team mixed keeper league, $310 salary cap. Can keep 11 players. Can freeze three players’ salaries and give the other eight a $5 raise. Salaries listed are 2011 salaries. Players can be kept indefinitely. I’m leaning toward keeping those bolded, freezing salaries on Hanley Ramirez, Tim Lincecum and Jacoby Ellsbury.

Russell Martin, C $6
Jesus Montero, DH $1 (will qualify at C as soon as he plays one game at the position in 2012)
Paul Goldschmidt, 1B $1
Dustin Pedroia, 2B $11
Rafael Furcal, SS $7
Hanley Ramirez, SS $21
Mark Reynolds, 1B/3B $16
Mike Moustakas, 3B $6
Dustin Ackley, 2B $1
Carlos Quentin, OF $18
Brett Gardner, OF $11
Jacoby Ellsbury, OF $27
Andrew McCutchen, OF $9
Chris Young, OF $6
Billy Butler, DH $11
Mike Adams, P $1
Neftali Feliz, P $6
Doug Fister, P $1
Tim Lincecum, P $30
Matt Garza, P $16
Alexi Ogando, P $1
Julio Teheran, P $1
Cliff Lee, P $16

Mark:

The strategy for freezing players salaries is simple but can seem counter-intuitive. Suppose you aren’t planning on keeping any of the players for more than one year, even at their current salaries. In that case, it doesn’t matter whose salaries you freeze.

Why? Freezing salaries saves you $15. You save this money regardless of which players you discount.

Also note that if you value, say, Ellsbury at $30, he isn’t worth keeping at $32—the amount it would cost you to keep him without freezing his salary. So should you then freeze his salary and keep him at $27? No, you should not.

Why? Because even if you froze his salary, his true cost to you—what economists call the opportunity cost—would still be $32. That’s because, by freezing his salary, you’d be passing up the opportunity to freeze a different player’s salary—some other player would cost you $5 more. (The only exception to this would be if you could find only three players worth keeping at all.)

So the first thing you should figure out is which players are worth keeping at $5 more than their current salary. Assuming that there’s more than three of them, then those are the only players worth keeping, even if there are fewer than the 11 total that you can keep.

Once you’ve done this, you should think about which players you want to freeze. The fact that this decision is inconsequential if you’re not going to keep any players for more than one year should tip you off as to what’s important for actually figuring out which to freeze: Which players would you be most likely to keep for at least an extra year?

You want to freeze the salaries of players you are likely to keep again (and again). Why? Because by freezing their salaries this year, you save yourself not only $5 this year, but $5 next season, since the price that you can keep him at next year will be $5 lower than it otherwise would have been.

On to your players. I think the players you’ve bolded are mostly correct. I do have a few worries though.

Lincecum at $30 seems about fair. If you bought him at auction last year for $30, I guess he’d go for less than $35 this season. In that case, I’d definitely not keep him.

Gardner at $16 is tempting. If Ellsbury went for $27 last season, then Gardner should be worth more than $16.

I wouldn’t keep Mike Adams at $6. I’d rather have Young at $11. I’d stare at your league’s auction history for a while though. Be careful not to over-keep players. If you don’t feel that there are 11 worth keeping, don’t keep 11.

Who to freeze? Given their salaries, McCutchen and Pedroia should be frozen. They’re likely to be kept again since they are so cheap.

It is a bit harder to find a third candidate who screams out to be frozen (in which case, it wouldn’t matter which keeper you gave that option to). One option is to take a gamble with Montero. Next season is likely going to be an informative one for his owners. If he breaks out, you’ll have years of profit ahead of you. If not, then you can cut him loose at the end of the season (or earlier) and not have lost much of anything by freezing him.

The other option is to play it safer and freeze Lee. He’s capable of giving a few more solid $30 seasons and returning a decent if unspectacular profit.

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Comments

  1. Jim said...

    Jonathan
    This is a very perceptive analysis, but I think you don’t want to add $5 to each player’s salary when thinking about next year’s cost, but rather $2. The point is that you have $15 to allocate to 11 players, and as you point out, it doesn’t matter which player is appointed to get the freeze.  $15 over 11 players ia a little north of $1, and so the $2 is what it is really costing you.  Also, the notion of looking at freezing players who you might want to keep multiple years would argue for freezing the lowest price players who are younger and might improve.  This is risky, but consider the value of getting Ackley for $1 each year if he turns out to be a star. That argues against keeping Lee who is more likely to decline in value.  I think Mark should also consider what the other teams will do with their keepers, as position scarcity may play a role in values going forward.

    By the way, 1:25 AM?

  2. Jonathan said...

    Ha. I’m not the editor – he posted it at 1.25. maybe too much turkey meant he/she couldn’t sleep.

    Jim – not sure where you get the $15 figure from. In any case, you shouldn’t use the keepers average cost (8 paid keepers * $5 increase / 11 total keepers = $40/11) which is what i think you were hinting at. Rather, you should use the marginal cost of the last keeper, which is (as long as you keep more than 3) $5 more than his salary.

  3. Brad Johnson said...

    The strategy you need to be using here is to freeze salaries on players who are cheap superstars. You want to find $1 Jose Bautistas and then lock them up forever and ever. When a new $1 superstar finds his way onto your roster, you float Bautista for a couple years and then cut him loose when cost>value.

    You have 4 guys I’d consider freezing right now – Montero, Lee, McCutchen, and Pedroia. Montero is your multi-year $1 star, he could be huge out of the C position, giving you everyday first base production out of a usually terrible roster spot. Whichever of the others you opt to keep, you should be looking for even better players at similar or lesser costs to keep on the cheap.

    Your freeze choices must be made as multi-year decisions

  4. Mark said...

    Thanks, Jonathan, for looking at my roster.  I should have added that only teams finishing out of the money (5th -11th) have the ability to freeze players’ salaries, i.e. if I finish in the money next year, I’d have to give Montero a raise.

  5. Brad Johnson said...

    That shouldn’t affect your calculus too much, you want to freeze guys with huge surpluses more so than established players with modest surpluses. At the end of the day, you pay the same amount for your keepers, you just get a chance to pay less for certain guys in the future.

    A corollary to that, you’ll want to pick guys who are very likely to be long term keepers and won’t experience declining value.

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