Draft Capital, Return, and the Fantasy Marketplace

In order to locate value, one must be familiar with the marketplace. You want to be an actor, not the reactor during your league draft. In this piece, I'll introduce the concept of the marketplace and how we can exploit this concept in order to dominate our fantasy drafts.

The marketplace is a multi-dimensional arena that illustrates the landscape of the entire talent pool. The construction of the marketplace utilizes nine variables:

1. 2015 ADP (updated weekly)
2. 2014 ADP (update from 9/4/2014)
3. Change in ADP (∆ADP)
4. 2015 Pre-Season Positional Rank – RB1, QB4, etc. (based on 2015 ADP)
5. 2014 Pre-Season Positional Rank (based on 2014 ADP)
6. 2014 Final Positional Rank (RB1, QB4, etc)
7. 2014 Return%
8. 2014 Draft Capital Return
9. 2014 Net Return

While ADP and positional rankings are criteria that are commonplace in the fantasy football lexicon, draft capital and return are terms that require some contextual explanation.

Draft Capital

In an auction draft, each drafter has complete agency concerning how much capital is used for various roster needs. Some are compelled to invest 55-65% of their budget on two marquee studs (studs & duds), while some prefer a more balanced approach of spreading their budget out to address all critical roster needs (value hunting).

Unfortunately, we remain in the dark ages of fantasy football where the traditional snake draft remains the default drafting method. While auction draft capital allocation is elastic, the snake draft has fixed capital values. 

How do we assign capital value to draft picks in a snake draft?

With each pick, the talent pool becomes increasingly saturated, so a drafter’s capital decreases each round.

In a 16-round draft, a 1st round selection has a capital value of 16, a 2nd round selection has a capital value of 15 …

nth round Draft Capital = (#rounds + 1) – nth Round

ex: 1st round Draft Capital = (16+1) – 1 = 16

8th round Draft Capital = (16+1) – 8 = 9

Each drafter has a total draft capital budget of 136 (16+15+14+…3+2+1 = 136), and spends it as follows:

1st 11.8%	5th 8.8%	9th 5.9%	13th 2.9%
2nd 11%	6th 8.1%	10th 5.2%	14th 2.2%
3rd 10.3%	7th 7.4%	11th 4.4%	15th 1.5%
4th 9.6%	8th 6.6%	12th 3.7%	16th 0.7%

Return%

When making any type of investment, it is usually the maximization of return that is prioritized. Return, viewed through the lens of fantasy football, is quantified by the difference between drafted positional rank and actual positional rank. This difference is denoted by the Greek letter Delta “∆”.

∆ = Drafted Positional Rank – Actual Positional Rank

But “∆” only makes up half of the return equation. Also incorporated is the opportunity cost incurred when drafting one player over many available options. In other words, opportunity cost encompasses the forfeiture of access to all players drafted between your picks.

Opportunity cost is relative to league size. In a 12-team league, the average distance between a team’s draft picks is 12, demonstrated below:

The distance between 1.01 and that team’s next selection at 2.12 is 23. The distance between 2.12 and 3.01 is 1.

(23+1) ÷ 2 =12

The distance between 1.04 and that team’s next selection at 2.09 is 17. The distance between 2.09 and 3.04 is 7.

(17+7) ÷ 2 = 12

The return equation is thus:

Return% = (∆ ÷ Opportunity Cost) + 100%

Opportunity cost remains constant for every team, regardless of draft position, so the equation is simplified too:

Return% = (∆ ÷ 12) + 100%

The quotient of ∆ and opportunity cost (12) effectively measures a player’s production, relative to his expected output based on his draft location. Taking into account the possibility that every competitor could draft a player at that target position before your next pick, it penalizes a player whose production could have been obtained a round (or few) later.

A player whose production mirrors his positional draft value yields a 100% return on investment.

Matt Forte was the 4th RB drafted in 2014 at 1.04 and finished as the overall RB4. His 2014 return is 100%.

Forte’s 100% return translates into the following statement:

• Drafting Forte at 1.04 gave that team a 100% advantage for the 2014 season.

A player who under-produces relative to his draft value has a return < 100%.

LeSean McCoy was the 1st RB drafted in 2014 @ 1.01 and finished as the overall RB13. His 2014 return is 0%.

McCoy’s 0% return translates into the following statement:

• Drafting McCoy @ 1.01 gave that team a 0% advantage for the 2014 season.

A player who produces a surplus relative to his draft value has a return > 100%.

Jeremy Hill was the 39th RB drafted in 2014 @ 9.07 and finished as the overall RB10. His 2014 return is 342%.

Hill’s 342% return translates into the following statement:

• Drafting Hill @ 9.07 gave that team a 342% advantage for the 2014 season.

A player whose difference between drafted positional rank and actual positional rank is >12 yields a negative return.

Calvin Johnson was the 1st WR drafted in 2014 @ 1.05 and finished as the overall WR14. His 2014 return is -8.33%.

Johnson’s -8.33% return translates into the following statement:

• Drafting Johnson @ 1.05 gave that team an -8.33% advantage for the 2014 season.

Objection:

“How can you say Johnson had a negative return? He had three weeks of elite WR production!”

Explanation:

While Johnson had a few big games, he only had six weeks of startable value (WR1, WR2, FLEX) leaving a team with a severely under-performing WR1 slot for seven regular season weeks (54% of the fantasy season).

Also, there were 13 WRs who were available at his draft position (1.05) that outproduced Johnson. The combination of the under-performing WR1 slot for 7 weeks and the opportunity cost of passing on the 13 superior WRs available is substantiated by the value -8.33% . Had Johnson been drafted where the 14th WR was drafted (Roddy White, 4.02), his 2014 return would then be 100%.

Draft Capital Return & Net Return

Draft Capital Return is return value in the form of draft capital. If you spend 16 units of draft capital on your 1st round pick, you should hope to receive at least 16 units in return in the form of production.

Draft Capital Return = (Return% x Draft Capital Investment) + (Realized Draft Capital)

“Return% x Draft Capital Investment (risk)” represents the additional capital gained relative to magnitude of investment.

“Realized Draft Capital” is obtained by awarding the capital earned based on where the player should have been drafted.

example: LeSean McCoy finished 2014 as the RB13. Based on 2014 ADP, the RB13 (Ellington, A 3.01) had a 3rd round draft capital value (14). McCoy's realized draft capital for 2014 is 14.

Net Return factors in the cost of acquiring the player.

Net Return = Draft Capital Return – Draft Capital Investment (risk)

	Return%	Draft Capital Investment (risk)	Realized Draft Capital	Draft Capital Return	Net Return
Forte, M Chi	100	16	16	32	16
McCoy, L Buf	0	16	14	14	-2
Hill, J Cin	342	8	15	42.33	34.33
Johnson, C Det	-8.33	16	13	11.66	-4.34

Observations could be made that:

Drafting Johnson @ 1.05 was more costly than McCoy @ 1.01

Drafting Hill @ 9.07 was more beneficial than Forte @1.04

What The Marketplace Offers

Preseason rankings are vital when preparing for your draft. All drafters utilize some version of a “cheat sheet” as their primary draft prep and in-draft resource.

While all cheat sheets are not created equal, an inevitable equilibrium develops among the professionals concerning player draft value. This presents a problem. If you are using the same information that your competitors use, you eliminate any advantage your unique perspective can offer.

The marketplace monitors the value fluctuations caused by offseason transactions, coaching changes, injuries, depth chart movement and depreciation (age). The effects these variables will have on a player’s future production are hardly definite and are subject to foreign bias. The fluctuation data is juxtaposed with the draft capital and return data. The data can be sorted any number of ways to discover anomalies in valuation.

Early Value Anomalies

Andre Williams, NYG

AGE: 23 (2nd Year)

ADP	Player	ADP (OVR)	∆adp	2015 posRK	2014 Final	2014 posRK	2014 return	Draft Capital Return	Net Return
13.01	Williams, A NYG	145	-32	RB52	RB21	RB41	267%	31.67	24.67

 

Williams graded out poorly in 2014, ranking 49th out of 57 running backs with a -7.3 (-5.3 run) PFF rating. But Tom Coughlin stuck with him at the goal line (7 TDs), leading to a top-24 fantasy season. The addition of Shane Vereen throws some uncertainty into how the backfield shakes out, but Vereen is a passing down weapon and presents no real threat to consume early down work.

So just like 2014, it’s Williams and 30-year-old Rashad Jennings competing for running formation snaps. Williams proved to be the better pass blocker (PFF blocking grade 1.6, Jennings -1.3) and more durable than Jennings, who missed five games in 2014. His dropping ADP suggests drafters are overcompensating Vereen’s impact and/or Jennings ability to remain healthy.

DeSean Jackson, WAS

AGE: 28 (8th year)

ADP	Player	ADP (OVR)	∆adp	2015 posRK	2014 Final	2014 posRK	2014 return	Draft Capital Return	Net Return
6.02	Jackson, D WAS	62	-3	WR26	WR16	WR23	158%	32.00	20.00

 

While Washington struggled through 2014, Jackson put together a solid campaign. He had six games with at least 115 yards, finishing 13th in receiving yards on only 56 receptions. He finished seven spots ahead of where he was drafted on a positional basis amounting to a 158% return on investment.

Yet, Jackson’s ADP has fallen 3 spots (2014 – 5.11 2015 – 6.02). Being that there haven’t been any drastic changes to Washington’s offense or coaching staff, Jackson’s 2014 return justifies an increase in ADP somewhere between the end of the 3rd and mid 4th. It has yet to be realized in the market.

Ronnie Hillman, DEN

AGE: 24 (4th Year)

ADP	Player	ADP (OVR)	∆adp	2015 posRK	2014 Final	2014 posRK	2014 return	Draft Capital Return	Net Return
16.03	Hillman, R DEN	183	-23	RB65	RB40	RB54	217%	14.50	11.50

 

It’s no secret that any running back lining up next to Peyton Manning is a coveted fantasy asset. But recently the problem has been predicting who will emerge as Denver’s main back during training camp and the preseason.

Hillman got his shot in 2014 from Week 5-9 and did not disappoint. He gained 484 yards on 100 touches and scored 4 times in those five games before an injury allowed C.J. Anderson to overtake him on the depth chart.

Entering 2015, the consensus is that Hillman is third in the pecking order behind Anderson and Montee Ball. But history suggests that there is a strong chance Hillman will, at some point during the 2015 season, assume significant fantasy value.

Eric Decker, NYJ

AGE: 28 (6th year)

ADP	Player	ADP (OVR)	∆adp	2015 posRK	2014 Final	2014 posRK	2014 return	Draft Capital Return	Net Return
11.09	Decker, E NYJ	129	-35	WR50	WR28	WR36	167%	26.00	17.00

 

Going into 2014, everyone knew Decker was due for a cliff dive in production. Leaving the well-oiled scoring machine they call the Denver Broncos for a team best known for its dysfunction, the NY Jets.

But Decker proved his past success was not entirely reliant on Peyton Manning. He finished 2014 as the WR28, a respectable WR2 and strong flex. He finished eight spots ahead of where he was drafted on a positional basis amounting to a 167% return on investment. Yet, Decker’s ADP has fallen a staggering 35 spots (2014 – 8.10 2015 – 11.09).

Some argue the arrival of Brandon Marshall will surely put a damper on Decker’s volume of involvement in the offense. But Marshall’s ability to get open downfield has all but vanished and at 31 years old, isn’t getting any faster. Decker’s skill set and age (28) will afford him similar – if not an increase in – production.

Stay tuned for market watch updates.

 

For more info on the Fantasy Marketplace™, Tweet Adam @rainesEastman