Discount Factor in Dynasty Leagues (1 Viewer)

[Bradford4Prez]

For those of you that aren't familiar with the term, the discount factor (DF) refers to how much you value next season in proportion to this one. For example, if you care equally about every season in a particular league, then the discount factor is 1. On the other hand, a redraft league has a discount factor of 0 because you don't care about next season.

The power of discount factors is pretty startling. Say you have two players, a great RB and a great WR. The RB has a 9 year career with the following point totals: 150, 250, 250, 250, 200, 200, 150, 100, 50. The WR has a 15 year career with the following point totals: 50, 150, 250, 250, 250, 250, 250, 200, 200, 150, 150, 100, 100, 50, 50. Over the course of their careers, the WR scores 50% more points than the RB. But if you have a discount factor of 0.8 for those points (next season is worth 80% of the current season, two seasons from now is worth 80% of next season, etc) then the RB actually becomes slightly more valuable because his scoring output is front-loaded.

Here are some reasons to put a high discount factor on your league (close to 1):

*Your league has been around a long time and is very stable. It will be around for a while and so will you.

*Your team is lousy and you are building for the future.

*Your team is an absolute lock to win the championship this year, and so you might be more concerned about securing future championships.

Here are some reasons to put a low discount factor on your league (further from 1):

*Your league is brand new and you aren't sure if you will like it.

*You think it's possible that changes in your personal life could take you away from FF.

*You have a good team that is one or two pieces away from being a favorite.

I would like to argue that NO dynasty manager should set his team's discount factor to 1. Two reasons:

*Projecting stats far into the future is much more uncertain than for this season or the next. Players get hurt and drop out of the league all the time. The average NFL career is only 3-4 years.

*It is easier to find future production than current production. If a key player on your team has two years left on a contract, that gives you two years to find a replacement through the draft, waiver wire, or trade. You can buy several "lottery ticket" type players for cheap and you only need to hit on 1. On the other hand, if you have a future stud at the position but no production now, you will have to give up a lot for that production. So seasons in the immediate future should receive more weighting in your player valuation than seasons far in the future.

One result of these two observations is that top rookie RBs should almost always be more valuable than top rookie WR, even if their careers are shorter. That's because the RB's production typically peaks earlier.

What do you guys think a typical dynasty discount factor should be?

 

[zed2283]

I'm not sure what you just said, but I think I disagree with it.

 

[dwyadog]

seems he's trying to put a number in place to ease figuring out how valuable someone is to you in fantasy.

I just don't see how it would work. I understand what the OP is saying but this factor would be just one variable among many and I don't see how it would supercede many of the more prominent variables. What do you set the discount factor at when a team drafts or trades for a stud? Once youve chosen your discount factor, can you/should you ever change it?

I can see a number like this as an interesting thing to discuss but I don't see any practical value.

 

[Sweet Love]

I am not a dynasty guy, so take this with a grain of salt...at worst, it may spark some conversation for the thread...

In your example you use a RB with 9 years of experience (and trending down) and a WR with 15 years of experience (trending down). From my perspective (1), guys scoring 50 points in a given year mean little to me as I would rather put in a Brad Smith-type from the WW and hope he gets a long reverse or a trick play, rather than "hoping" for 4 points...maybe that is just me, but that is how I see it. Also, with the example, I am guessing it is safe to say neither will be much of a game changer, so i take the guy i need most. If I have a WR corp with Fitz, Marshall, Cotchery, Maclin and someone else, and my RBs are weaker, then I just go with the RB in your scenario, because odds are he is going to be inserted into my lineup before the WR would be.

While I applaud you for coming up with a mathematical scenario for this, it is like trying to come up with an equation to quantify chaos (watch, Drinen comes in here and has one...lol). When comparing players like this, i look at my team needs, their situations, their opponents, etc. I don't see how you can just assign a number and assume that player X will be as valuable to everyone as player Y would be. Am I missing anything?

 

[radballs]

I agree with attempting to put the discount factor into your player analysis. But, instead of focusing on your expected player points scored you should be using your projected VBD points above the baseline and then discount it from those. That said, dynasty is much more art than science relative to redraft leagues, and I agree with you regarding not putting too much value into the future.

 

[az_prof]

I don't know that I can quantify it, but I think as a rule of thumb three years is a good window as a baseline projection. It is true that the further out you get the harder it is to predict, but that's why the most valuable players are those who are most consistently at the top of their position. If there is a player who I think will only play one year at top form I have to really discount him. Two years, I'll discount him but not as much. Three years, a slight discount. More than that is hard to really predict.

A WR who has a history of three years of top ten production and who is still in his mid 20s is very likely to continue that production or close to it for a long time, and at least for the next three. Hence, I disagree with the closing suggestion that rookies RBs are more valuable than veteran WRs. Unless you play in a traditional, TD heavy scoring system with small starting lineups (2 RBs and 2 WRs), the value of WRs who can be counted on are the most important. Rookie RBs are not the most reliable player and it is hard to predict what they will do even in their rookie year, much less beyond. They haven't proven anything in the NFl and you don't know how the team will use them. So, last year I loved Donald Brown but I didn't rely on him, thankfully. People who relied on Brown, Wells, or Moreno would have been hurting last year. On the other hand, you should have known that LT and LJ were going to begin their decline soon.

 

[Concept Coop]

I see what you are saying, and am trying to come up this a formula to predict furture value, based on age. There are some studies out there, but they are flawed. They use retired runningbacks over their careers (as they would need to) and do not take into account the change in the position over the years. How can you use history to predict the value of those not relagated to follow said historical happening? I don't know if you can, but I am going to try.

As far as a blanket percentage to place on a player to discount future value, I can't bring myself to do it quite yet. Too many factors go into it, epecially age. Meaning, you shouldn't discount a 23 yo WR's value by 80%. And you should't value a 29 YO running backs future value, using the same percentage you do for every other year.

You would have to map out A LOT to compare RB to WR value. I am only trying to compare RBs to RBs and WR to WR and that is going to be hard. I would say you would need to map out the careers of close to 50 players at each position to have a solid sample size.

Best of luck. But I can't say that I agree using the 80% logic, although I understand it.

 

[Bradford4Prez]

A couple things...the 80% number is just an example, as are the point projections. I think marginal points above baseline should always be the driver of value.

The DF would be different for every team. However, it has nothing to do with what you think a particular player will do in the future. The projections are the same. But depending on the characteristics of your league, your team and perhaps the particular strengths of your team at a certain position, you adjust your discount factor.

For example, to say an aging player on his last legs should have a discount factor close to 0 is a misnomer. If you see that he is declining and will probably not offer you much next year, you project him for 0 points next year - simple as that.

 

[gheemony]

When valuing a player, I attribute 50% to year 1, 33% to year 2, and 17% to year 3. Zero after that because it is too hard to predict performance beyon three years and NFL players have short careers.

As for age based curves, you can derive a formula for improvement and decline from Drinen's work at PFR. Also, search the shark pool for Quality Years Remaining by Couch Potato to help determine when a player is likely to face significant age-related decline.