FA bidding

[Lucas Lima #52]

Another idea, a lot simple... Create a 'Market Value' for the bids... This MV would be calculated by the formula:

(Number of Years + 4)*Yearly Value

The winner is the higher MV...

Example:
Rangers open up bid on Holliday with $15m for 3 years => MV = 105
Blue Jays bid $17m for 4 years => MV = 136
Rays bid $15.5m for 5 years => MV = 139.5
Yankees bid $18m for 5 years => MV = 162
Mariners bid $27m for 4 years => MV = 216
Phillies bid $24.5m for 5 years => MV = 220.5
Blue Jays bid $26m for 5 years => MV = 234

For a 4 year deal to raise it, the sallary would be at least 29.5mi...

The only problem with this formula, is that you can't see exacly how much you're going to bid with less years in order to win it... You need to try a few numbers to find a bigger one...

[Dan Wood]

This is all getting way out of sorts. I haven't opened a math book since the turn of the century. That being said, I think the salary should remain the same from year to year. MLB teams have lawyers and accountants to keep track of contracts. We have us, and Colby's excel spread sheet. Which I might add is pretty bad ass. So I think the winner should should be the person who offers the most money and the most years. Unfortunately this is all make believe and we don't get to wine and dine players, get them hookers, and tell them about our winning strategy for the upcoming year. This is strictly a numbers game, and who ever has the biggest number gets the prize. However if someone is offering 25 over 5 years, and someone is offering 40 over 3 years, I would think the 40 would win.

Plus just to bring this up, possibly an idea for next year. Since we have RFA's like the NFL. If you lose an RFA, you should get draft compensation from the signing team. Just a thought.

[ChinMusic]

I think I agree that we have unleashed a beast!

My view is the discounting, MV, winning value factors, etc are all complications too far. I don't see that it needs to be that complicated.

In the spirit of my new role as a global moderator (although not in this area of the league admittedly and as a new guy after all) may I humbly summarise where I feel we are with this.

My original idea is covered by posts #2 and #6 on this thread which I feel is a single step forward from the current rules, and simple to implement and understand.

Colby's 50% down / 25% up idea is a further development of this, and is I feel a variation on my original '% variation of largest per year offer'.

Backloading is probably too complicated to implement without setting Colby's super-spreadsheet on fire.

Jake's point on RFA tags is completely valid and I think RFA retained players should be kept on the number of years the tagging team decides. It should be simple to work out the dollars they have to pay if the number of years they want is less than the winning bid, with a simple conversion of some kind. RFA tagging is an important revenue based advantage.

My request is to re-chime in on the original idea (posts #2 and #6), review what elements of Colby's ideas we implement, agree the RFA tag retention value rules when years differ, and make this into a final proposal.

Otherwise we will have multiple new ideas and never agree it.

I very much appreciate I'm not a member of the RC and I don't mean to overstep my place but I think that's where we are...

Cheers,
Chris

[Daniel]

I like Colby's idea of the some percent down and some percent up, but I like it even better tiered like kdoc proposes, because it's not the same to take 25 percent down when jumping from 1 to 2 years, than when jumping from 4 to 5 years. For example a 4 year offer of 20 mil means 80 mil guaranteed money, while the 5 year 15 mil bid that would be needed to surpass it is 75mil guaranteed for more years which wouldn't make any sense. I would propose:

25 percent from 1 to 2
20 percent from 2 to 3
15 percent from 3 to 4
10 percent from 4 to 5

and also the tiers should apply to raising salaries for less years and I would propose

10 percent from 5 to 4
20 percent from 4 to 3
30 percent from 3 to 2
40 percent from 2 to 1

An example would be:

X offers Player 2 year contract for 10 mil each (20mil guaranteed)
Y offers 1 year contract for 14mil (14mil guaranteed)
X offers 2 year contract for 10.5 mil each (21mil guaranteed)
Z offers 3 year contract for 8.5 mil each (25.5m)
W offers 1 year contract for 16.5 mil (16.5m)

and so on. This will allow for plenty of bidding and guarantees that no player will receive less guaranteed money for more years.

[Colby]

Jake's point on RFA tags is completely valid and I think RFA retained players should be kept on the number of years the tagging team decides. It should be simple to work out the dollars they have to pay if the number of years they want is less than the winning bid, with a simple conversion of some kind. RFA tagging is an important revenue based advantage.

To simplify this, I would say the RFA would have to match the salary.  No adjustments are made, but the owner of the tag chooses the number of years.

Also, as a member of the RC, the commish-in-place, founder, and executive, I feel I need to lead this discussion into what I think is best.

+1 year = 90% of previous bid
-1 year = 130% of previous bid

I tweaked these percentages down to reduce bidding volatility and give a bit more weight to the salary aspect of the contract.  While I like all of the other ideas, I want something that is simple to practice for all GMs.  This is an easy adjustment to remember or recall quickly in the rules.

What's your say RC?

[h4cheng]

I really like the PV idea, but it is a bit complicated. Is it possible to implement some sort of PV calculator in Excel?
(Of course, we also need to construct some sort of a yield curve...)

[Colby]

I really like the PV idea, but it is a bit complicated. Is it possible to implement some sort of PV calculator in Excel?
(Of course, we also need to construct some sort of a yield curve...)

If this was an all actuary (or people of professions that are quant-like) then it would be a great idea.  We are trying to keep things simple.

[h4cheng]

Colby:

+1 year = 90% of previous bid => 171% interest rate...I don't think that too realistic.

Interest Rate   171%         
Year   Value   PV   Cum. PV   Change in % Cum PV
1   10   3.688376822   3.688376822   
2   10   1.360412358   5.048789181   73.05%
3   10   0.501771341   5.550560522   90.96%
4   10   0.185072178   5.7356327   96.77%
5   10   0.068261593   5.803894294   98.82%
Avg            89.90%

[The Cutter]

Colby:

+1 year = 90% of previous bid => 171% interest rate...I don't think that too realistic.

Interest Rate   171%         
Year   Value   PV   Cum. PV   Change in % Cum PV
1   10   3.688376822   3.688376822   
2   10   1.360412358   5.048789181   73.05%
3   10   0.501771341   5.550560522   90.96%
4   10   0.185072178   5.7356327   96.77%
5   10   0.068261593   5.803894294   98.82%
Avg            89.90%

Just chiming in here even though I am not in the league anymore...  I think you read the +1 year = 90% of previous bid approach the wrong way.  Example with Albert Pujols

COL bids $15m for 1 year
ATL bids $14m for 2 years (note that 90% of $15m is $13.5m and to top that bid is $14m, also note that the total contract is $28m, not $14m)

[Colby]

 

A-Ram, it appears as if you are checking out the framework of these rules for your agents league?