FA bidding

[Colby]

My original designs for this league had some simpler rules.  I never expected the league to become this good or MLFB to grow as much as it did.  With that said, I think the FA bidding process should be reviewed, specifically for the number of years in the contract.  Currently, the winner of the bid gets to choose the years.  However, this is flawed big time.

Wouldn't Matt Holliday go for a 5-year deal paying $18m a year versus a 2-year paying $23m a year?  I wish there was some way we could fix this before free agency started, but I suppose it is a bit late.  If you have any ideas, feel free to shoot them...

[lp815]

Another league I play in has minimum years set for players that in the top 10 and top 20 of their position in the year prior.  I believe it's 5 year minimum if they are in the top 10, 3 years if they are in the top 20.  Just a thought, it seems to work well in that league.

[ChinMusic]

My original designs for this league had some simpler rules.  I never expected the league to become this good or MLFB to grow as much as it did.  With that said, I think the FA bidding process should be reviewed, specifically for the number of years in the contract.  Currently, the winner of the bid gets to choose the years.  However, this is flawed big time.

Wouldn't Matt Holliday go for a 5-year deal paying $18m a year versus a 2-year paying $23m a year?  I wish there was some way we could fix this before free agency started, but I suppose it is a bit late.  If you have any ideas, feel free to shoot them...

Not sure if you want my opinions here as I'm not a member of the RC, but here goes anyway...

How about the overall contract value takes the player, with the dollar value per year being within a certain percentage of the highest offer regardless of years.

Simple example

Mariners offer Holliday $25m per year, 1 year contract

If the percentage was set at 20% with a round-down rule, the further years could be offered at a minimum of $20m per year

So the Pirates then offer 2 years, $20m per = $40m. They lead the race for his signature.

Anyone wanting to offer more years would have to offer at least $20m per going forward.

Anyone wanting to offer the same number of years could do so at a higher rate i.e. $20.5m+

To continue the example -
Cardinals would like to offer 3 years, they would have to offer between $20m and $25m (or indeed more than $25m if they so wish)

Let's say they offer 3 years, $22.5m = $67.5m

Further interested parties would be looking at $23m+ on a 3 year basis ($68m), or offer the 4th year from within the original range of $20 - $25m from the maximum offer per year

There would have to be a rule that the maximum per year offer can only be increased if this makes the offer the highest dollar value contract, otherwise the baseline figure from which the percentage is flexed can be manipulated.

So any interested teams basically have to increase the dollar value for the same number of years, or add a further year from the given range to increase the overall value of the contract.

I think this may better reflect the free agency market, where offering the years normally is the deal maker rather than dollars, expecially over 1 year.

I think the main flaw with the current system is that you can offer a massive 1-year deal, then settle back next offseason and pay the contract rate, almost definitely at a lower dollar value.

[Daniel]

we could use a formula to calculate total value for the contract, but I also have an interesting proposition, how about giving a winning team from last season a small advantage over a losing team? that would make it even more realistic. I would suggest this:

Total Value = winning factor * (# of years * yearly contract value + yearly contract value ^ 1.3)

I would suggest that the winning factor should be something like this:

win percentage  (minimum)         winning factor
     1.000                                      1.15
      .750                                       1.10
      .600                                       1.05
      .500                                       1.00
      .400                                       0.95
      .250                                       0.90
      .000                                       0.85

This way it will be a small difference, but it may be more realistic. I would also suggest that the hometown team for each player always get the multiplier of 1.1 regardless of it's record.

[Colby]

I like both of those suggestions, and these were dynamics that I thought of before I created the league a year ago.  If existing GMs are proposing such rules then this is something the RC should seriously consider.  I think we could go with something simple in the mean time as this would have to be passed before the 15th.

[Canada8999]

Another option is to impose minimum contract lengths based on the salary, similar to the currently implemented maximum lengths.  There are some MLB cases where players sign large contracts for only 1-2 seasons, but it seems to me that often than not big money means a long deal (3+ years), and this would be a simple way to enforce that.

For a more complex solution, we could calculate the total value of a contract using a time-value of money type approach http://en.wikipedia.org/wiki/Time_value_of_money, where the value of future seasons are discounted.  Teams propose a yearly salary and number of years - highest total value wins.

PV = [A / i] * [1 - 1/((1+i)^n)]

PV = Present Value
A = Annual Salary
i = Interest Rate (discount rate)
n = Number of Years

Comparing the hypothetical Holliday contracts of $18.0M/year, 5-years ($90M total) vs. $23.0M/year, 2-years ($46M total), and using an example discount rate of 0.05:

$18.0M/year, 5-years: PV = $77.93
$23.0M/year, 2-years: PV = $42.76
For the 2-year deal to be worth more, it would have to be $42.0M/year

If the interest rate were set to 0.5:
$18.0M/year, 5-years: PV = $31.26
$23.0M/year, 2-years: PV = $25.56
For the 2-year deal to be worth more, it would have to be $28.5M/year
Also, increasing to 3-years would be more - $23.0M/year, 3-years: PV = $32.37

[ChinMusic]

I think any system would need to be simple to understand and apply, free agency will be hectic enough I would imagine and I think the values need to be easy to determine and move on. Plus any system that we were thinking of using before FA this year would need to be very clear to understand. I fear that applying net present values to contract offers would cause some confusion.

Not that I'm simply pushing my own idea, but one practical addition to it would be a clear statement per bid to set the current market state.

i.e. If the current market was at 1-year, $15m and I pushed to 2 years, $15m I would post

Seattle offer 2 years, $15m
Current contract value $30m
Current highest per year offer $15m

or some shortened format to make clear the current terms of engagement within the latest high bid.

Regarding home town discounts this is a nice idea to me, but I wonder how this affects RFA tagging. Multiple tags for the smaller market teams is a key advantage, if we are saying that they also get a discount for their additional tags then this would potentially increase that. Also with the ability to offer new contracts with no fear of refusal or the players agent taking them to the open market, that seems like a hometown advantage  already.

[Colby]

Ben, I am an actuary, and while I would love to see discounted contracts used, it is a bit too complex for most people in the league.  I am not saying that people are dumb, but the league should still be easy to understand and play.  There is enough research that goes into one move.  I am interested in what Chris has to say though.

[clidwin]

Hey lets make it a little easier for the guys. But we really need to get this WRAP UP! in the next couple days!

[ChinMusic]

Ben, I am an actuary, and while I would love to see discounted contracts used, it is a bit too complex for most people in the league.  I am not saying that people are dumb, but the league should still be easy to understand and play.  There is enough research that goes into one move.  I am interested in what Chris has to say though.

Thats put it over exactly. I'm sure the members all followed the logic and understood the premise, but we are going to be dealing with multiple threads, maybe with more than one player on offer for your franchise, and we need to be able to look straight at the thread and see what it takes to get the lead bidding for the player.

If you guys are happy for me to run with this idea I can put a proposal together that reads like a genuine rule, and have that rejected / approved or tweaked.

This should be able to be done with the urgency reminded by Clive in his earlier thread. Do you think it's possible to review before FA begins, assuming I get the green light to post it up later today?

Chris