Do you use a "discount rate" in dynasty? (1 Viewer)

[bengalbuck]

As someone relatively new to dynasty, one of the things I am struggling with a bit is how much to discount future returns (expected production in 2012 and beyond) vs. more immediate future returns (expected production in 2011).

Let me give an example and I'll ask people to try to put it in numerical terms:

-Assume just for the sake of this argument that junior Alabama RB Trent Richardson is exactly as talented as future Saint RB Mark Ingram and that he will definitely declare for the 2012 draft.

-Assume that in my ranking system Mark Ingram is a 90.

-Assume that if Trent Richardson was one year older and was just drafted by the Saints, he would be a 90 also.

With those assumptions, what numerical value would you put on Richardson to take into account that 1. you get no production from him in 2011 and 2. by the nature of things, his future production is a bit less certain than Ingram's because you don't know who will draft him, if he'll get injured in college, etc.?

Would Richardson be an 80? A 70?

Or to put it a different way, if you owned Ingram and someone offered you Richardson plus a 2011 draft pick, what pick what it have to be for you to pull the trigger on the trade? (i.e. Richardson + 1.09 for Ingram)

 

[mlball77]

I don't know that there is an exact science to discounting for future produciton.

Ex1: Team A is a slightly older team that looks like a challenger for the title.

Ex2: Team B is a slightly younger team that has several major holes to fill before it's a playoff caliber team.

To me, Team B probably wouldn't discount the future production of a player quite as much as Team A would. In other words, Team B can afford to wait on said player without being hurt too bad (since they aren't making the playoffs anyway) whereas Team A might be more inclined to focus on players that can contribute this year, if they are going to make a run at the title. In your example, if Ingram is accepted as a value of 90 and we are assuming Richardson is the same talent level and will end up in a very similar NFL situation, then Team A might see Richardson as an 80 while Team B sees him as an 85.

This is just a couple basic examples. My general point is that the varying states teams find themselves in, in a dynasty league, will have a bearing on how steeply they discount future production.

ETA: Owner approaches also have an impact on this. Some owners are always looking toward the future and covet rookies and draft picks. NTTAWWT. These types probably wouldn't discount future production quite as much as some other owners in the league.

 

[bengalbuck]

I don't know that there is an exact science to discounting for future produciton.

Ex1: Team A is a slightly older team that looks like a challenger for the title.

Ex2: Team B is a slightly younger team that has several major holes to fill before it's a playoff caliber team.

To me, Team B probably wouldn't discount the future production of a player quite as much as Team A would. In other words, Team B can afford to wait on said player without being hurt too bad (since they aren't making the playoffs anyway) whereas Team A might be more inclined to focus on players that can contribute this year, if they are going to make a run at the title. In your example, if Ingram is accepted as a value of 90 and we are assuming Richardson is the same talent level and will end up in a very similar NFL situation, then Team A might see Richardson as an 80 while Team B sees him as an 85.

This is just a couple basic examples. My general point is that the varying states teams find themselves in, in a dynasty league, will have a bearing on how steeply they discount future production.

ETA: Owner approaches also have an impact on this. Some owners are always looking toward the future and covet rookies and draft picks. NTTAWWT. These types probably wouldn't discount future production quite as much as some other owners in the league.

Thanks for the response. Makes a lot of sense. I didn't know if there was a relatively standard formula. For instance in the actual NFL draft, it generally would take a 2012 2nd round pick to trade for a 2011 3rd round pick. Is it relatively similar in dynasty for the most part (a 2012 1st rounder for a 2011 2nd rounder)?

 

[Jeff Pasquino]

As someone relatively new to dynasty, one of the things I am struggling with a bit is how much to discount future returns (expected production in 2012 and beyond) vs. more immediate future returns (expected production in 2011). Let me give an example and I'll ask people to try to put it in numerical terms:-Assume just for the sake of this argument that junior Alabama RB Trent Richardson is exactly as talented as future Saint RB Mark Ingram and that he will definitely declare for the 2012 draft. -Assume that in my ranking system Mark Ingram is a 90.-Assume that if Trent Richardson was one year older and was just drafted by the Saints, he would be a 90 also.With those assumptions, what numerical value would you put on Richardson to take into account that 1. you get no production from him in 2011 and 2. by the nature of things, his future production is a bit less certain than Ingram's because you don't know who will draft him, if he'll get injured in college, etc.?Would Richardson be an 80? A 70? Or to put it a different way, if you owned Ingram and someone offered you Richardson plus a 2011 draft pick, what pick what it have to be for you to pull the trigger on the trade? (i.e. Richardson + 1.09 for Ingram)

to the world of Dynasty football. You'll be glad you did this, especially in Jan-May.Numerical values are tricky, and I've worked on the subject some with the Dynasty Draft Pick calculator and other tools. To answer your question in part - it depends. Yes, there is a discount that most (not all) Dynasty players use for future draft picks. It is the "present value" vs. "future value" debate. A 2012 pick offers you zero value in 2011, so therefore a 2011 1st > 2012 1st > 2013 1st and so on. (The contrarian argument is that all firsts are equal, since you'll get the utility of all of them over time - I don't subscribe to that since the future years are still less meaningful to me today).The general idea is that you subtract one round for each year in the future (i.e. a 2011 3rd = 2012 2nd = 2013 1st). This isn't an exact rule or science as some teams can be better than others (making a good team's 1st low or a bad teams' 2nd high), but now you have some basis to use going forward. Good luck.

 

[adrenaline]

IMO in a fantasy league the drop should be less than a whole round because your dealing with a smaller player pool. I'd say a 1/2 of a round give or take a little depending on if it's an IDP league. Example: In a Zealots IDP league I traded 2012 mid 1st for 2011 2.03 & 4.01.

 

[BuckeyeChaos]

it totally depends on the make up of your team. Using your example of Ingram vs Richardson. Assume you have aging RBs on your team with no youth. In this case I don't think I would discount Richardson at all and maybe even bump him up. If on the other hand I had a bunch of young RBs I would look at things differently.

 

[madd futher]

Now you are really starting to worry me. You are asking all the right questions. Fortunately, these topics do not have set-formula answers.

But I'll add a few other variables to the problem of developmental squad management. IMO the opportunity cost of having a player on your developmental roster varies by and is very much dependent on the learning curve for the position played by the player (as well as other factors mentioned above). In addition, I believe that we will come to understand that there is an 'art' to developmental squad management, because in our format you'll likely have more developmental-eligible players on your squad than you will have developmental spots for.

So just like there are subtle strategies to drafting, blind bidding, and for other in-season roster management decisions, we have a whole 'nother layer of complexity to master.

 

[Dinsy Ejotuz]

In my opinion there are so few players who can potentially help you across 4-6 seasons that you have to do whatever you can to acquire them (without giving up any similar players).

IOW for dynasty purposes I don't subscribe to the theory that 'all players have value.' For me player values aren't a continuous function, but a step or binary function - largely based on whether or not a player's historical comps had long careers or not.

Players who are likely to be one and done, or who obvious short-term plays are great if you can get them off the WW or very cheaply, but the guys who are relatively likely to put up 4+ years of good VBD are worth so much that any discount rate you might apply is a) insignificant in the context of the player's true value and b) a distraction from the true goal.

 

[bengalbuck]

In my opinion there are so few players who can potentially help you across 4-6 seasons that you have to do whatever you can to acquire them (without giving up any similar players). IOW for dynasty purposes I don't subscribe to the theory that 'all players have value.' For me player values aren't a continuous function, but a step or binary function - largely based on whether or not a player's historical comps had long careers or not. Players who are likely to be one and done, or who obvious short-term plays are great if you can get them off the WW or very cheaply, but the guys who are relatively likely to put up 4+ years of good VBD are worth so much that any discount rate you might apply is a) insignificant in the context of the player's true value and b) a distraction from the true goal.

I'm not sure I understand your point here exactly since I'm mainly talking about comparing 2 good young players, both of whom could help over the long term. Let's say for example in an upcoming rookie draft, I feel like I can get the 4th best RB in the 2011 draft or the 3rd best RB in the 2012 draft as a devy. (For this example, assume both drafts are basically the same as far as talent level) How does your theory apply? No discount so take the best player regardless of time frame(the 2012 guy)?

 

[geoff8695]

In my opinion there are so few players who can potentially help you across 4-6 seasons that you have to do whatever you can to acquire them (without giving up any similar players). IOW for dynasty purposes I don't subscribe to the theory that 'all players have value.' For me player values aren't a continuous function, but a step or binary function - largely based on whether or not a player's historical comps had long careers or not. Players who are likely to be one and done, or who obvious short-term plays are great if you can get them off the WW or very cheaply, but the guys who are relatively likely to put up 4+ years of good VBD are worth so much that any discount rate you might apply is a) insignificant in the context of the player's true value and b) a distraction from the true goal.

I'm not sure I understand your point here exactly since I'm mainly talking about comparing 2 good young players, both of whom could help over the long term. Let's say for example in an upcoming rookie draft, I feel like I can get the 4th best RB in the 2011 draft or the 3rd best RB in the 2012 draft as a devy. (For this example, assume both drafts are basically the same as far as talent level) How does your theory apply? No discount so take the best player regardless of time frame(the 2012 guy)?

It's an excellent point but I don't believe it is directed at your original question, but rather came about as a result of your post(s) and madd futhers that seemed to indicate you are new to dynasty and might welcome some additional strategy discussion. You generally can't tell which of 2 good young college players is primed to have several seasons of solid production before they start playing in the NFL (Perhaps the Adrian Petersons and Calvin Johnsons of the world could be exceptions). Therefore you need to figure out how to identify more of these players early on than your competition. Owners who do so and can acquire these players will field stronger starting lineups and consequently win more.

 

[matttyl]

And here is another variable to think about, similar to the 2nd post in this thread - when do you need the player and can you fit him on your roster now?

Example - my own dynasty roster

Rodgers, Freeman, Fitzpatrick

Rice, Mendy, Forte, F Jackson, D Brown

Calvin, Roddy, V Jax, Crabtree, James Jones, D Alexander

Finley, V Davis

Matt Bryant

Suggs, Cole, Mathis, Kiwi

Mayo, Beason, Tulloch, Ruud, D Ryans, McClain

Harper, Y Bell, Delmas

30 man roster limit

Now in your example if I had Ingram now, I'd have to then drop someone on my team. Sure I could drop Donald Brown, but for all we know Addai is gone and it's Brown's job to lose. I might not even use Ingram this year with those other RBs on my roster. I might rather have Richardson next year as my RBs start to get a little bit older and wearing down.

Maybe the example would work better with the #6 pick in a rookie draft than the #1, cause any team could "use" Ingram or Richardson. At #6, lets just call that Leshoure. He's not doing a lot for me this year, maybe I'd like to delay the pick for a year and take it next year as he won't do much for me now. I can trade it to a rebuilding team who I feel would have a likely top 3-4 pick next year, so I'd actually have a better pick next year.

Just my $.02

 

[fldoc]

What up cincy! Great questions, I am really excited about our most recent league going forward. My take: numerical values of prospects are too arbitrary to be useful. Devys are drafted solely on talent and I prefer to place the players in tiers. Using this year as an example, there are 3 tier 1 players in the 2011 draft and 3 tier 1 players in the 2012 draft. If given the choice, I would draft tier 1 2011 before tier 1 2012 and tier 1 2012 before tier 2 2011. this holds true throughout all tiers as talent will eventually rise to the top in my opinion.

 

[Dinsy Ejotuz]

I'm not sure I understand your point here exactly since I'm mainly talking about comparing 2 good young players, both of whom could help over the long term. Let's say for example in an upcoming rookie draft, I feel like I can get the 4th best RB in the 2011 draft or the 3rd best RB in the 2012 draft as a devy. (For this example, assume both drafts are basically the same as far as talent level) How does your theory apply? No discount so take the best player regardless of time frame(the 2012 guy)?

It's an excellent point but I don't believe it is directed at your original question, but rather came about as a result of your post(s) and madd futhers that seemed to indicate you are new to dynasty and might welcome some additional strategy discussion. You generally can't tell which of 2 good young college players is primed to have several seasons of solid production before they start playing in the NFL (Perhaps the Adrian Petersons and Calvin Johnsons of the world could be exceptions). Therefore you need to figure out how to identify more of these players early on than your competition. Owners who do so and can acquire these players will field stronger starting lineups and consequently win more.

For me (and I think I play differently than a lot of people) the only 'cost' I attributed to time is 'uncertainty.' Mark Ingram made it through his senior year, got drafted in the first round and we now know where he's going to be playing. I feel equally confident that Trent Richardson is going to be a good/great NFL player, but a lot can still go wrong before he gets to the NFL. He could punch someone in the face after a loss. He could get cancer. He could get caught smoking weed and transfer to Marshall.But I still wouldn't 'discount' him for that uncertainty exactly. That implies I might take a mediocre player today who's going to put up decent points for the next couple years instead of waiting on Richardson next year (or 2013). And I wouldn't. I'd only take another player I thought was going to be a stud in exchange - one who had less uncertainty. That's what I meant by step function. Players who have a reasonable chance to start and put up big VBD across several seasons are just so valuable that I'd rather hit on half and miss on half than 'discount' them ahead of time and get players who produce more this year and next (or even for three years).

 

[bengalbuck]

What up cincy! Great questions, I am really excited about our most recent league going forward. My take: numerical values of prospects are too arbitrary to be useful. Devys are drafted solely on talent and I prefer to place the players in tiers. Using this year as an example, there are 3 tier 1 players in the 2011 draft and 3 tier 1 players in the 2012 draft. If given the choice, I would draft tier 1 2011 before tier 1 2012 and tier 1 2012 before tier 2 2011. this holds true throughout all tiers as talent will eventually rise to the top in my opinion.

What's up doc. So I can make an educated guess that Richardson is going 4th and Blackmon or Jeffery is going 5th in our draft That's probably what I'd do in that spot as well....I made my own rankings both for guys who will likely come out next year and guys who I think are 2 years away. I'm relatively comfortable with those rankings by themselves, but having a little trouble incorporating them into overall rankings with all 3 classes combined. I think the thing I'm sort of trying figure out in my head is more the uncertainty inherent in drafting college guys as opposed to the future vs. present scoring issue. Like in our draft last year, I got great value taking AJ Green as a devy. But then I also grabbed Ryan Mallett later on and even in our start 2 QB league, that ended up being a bad value with the situation he ended up in. I drafted him last year projecting him as a 1st round QB who would start early in his career. Obviously that was a bad projection on my part.It's just harder as a layman to accurately grade guys so early in their career (not that it's easy after they're drafted, but it is easier b/c you at least know what NFL people feel about the guys (i.e. Ryan Mallett)). So much stuff comes out in the draft process that isn't common knowledge about guys who are still early in their college careers. If I have a guy as the #3 WR for 2012 ranked as a 1st round talent, he could end up going 3rd or 4th round when its all said and done. You just never know. Like Notre Dame WR Michael Floyd has some off field problems. Does he have a big coke problem like Mallett? We probably won't know til next year, so he's riskier than a guy like Jon Baldwin, who we at least know is definitely a 1st rounder as opposed to a possible 1st rounder.Plus, you have to take risk of where they land into account. Certain guys in this draft (Delone Carter, Roy Helu, Randall Cobb, Andy Dalton, etc.) all seem to have landed in pretty sweet situations. Maybe I don't see them as talented as some of the guys in 2012, but will the 2012 guys end up buried on a depth chart or given a great opportunity to start right away?Thanks again to all who have provided insight. I thought it an interesting topic with not much going on right now and I was curious how others try to account for (1) uncertainty of your own scouting, (2) uncertainty of what NFL teams devys will end up on and (3) if there's a discount based purely on future vs. present.

 

[fldoc]

I totally understand your frustration in mallett's current situation. But I would argue that he is the best pure passer in the current draft class and has the talent to be a very productive starter. While it may take an extra year or two, we could be talking about mallet as the hot trade commodity of 2013-14 that kolb is this year. I believe that the risk of the unknown landing spot of a devy is less than the risk of drafting a lesser talent and hoping his situation will allow him to outplay his draft position. Obviously this is a long term approach to building value, but the ability to trade for the missing pieces should allow you to be competitive without devaluing your squad during the draft.

And yes I would say the 2012 top 3 are on the shortlist for 1.4 and 1.5...but feel free to let j.jones slip to me

 

[bengalbuck]

I totally understand your frustration in mallett's current situation. But I would argue that he is the best pure passer in the current draft class and has the talent to be a very productive starter. While it may take an extra year or two, we could be talking about mallet as the hot trade commodity of 2013-14 that kolb is this year. I believe that the risk of the unknown landing spot of a devy is less than the risk of drafting a lesser talent and hoping his situation will allow him to outplay his draft position. Obviously this is a long term approach to building value, but the ability to trade for the missing pieces should allow you to be competitive without devaluing your squad during the draft.And yes I would say the 2012 top 3 are on the shortlist for 1.4 and 1.5...but feel free to let j.jones slip to me

Yeah, mallett's problems aren't necessarily talent related, so he still has some hope. However, looking back on some of those devys last year, guys like Evan Royster, Dion Lewis, Quizz Rodgers, etc. were all seemingly over-drafted as well. Point being, judging a guy's talent a full year out without the aid of the combine and without all the scrutiny that comes with the draft process is a pretty tough task. I'm sure the guy who drafted Royster thought of him as a 1st or 2nd round talent at the time. Some of these guys like LaMichael James, Knile Davis, etc. who are being talked about as 1st or 2nd rounders next year could easily end up in the same boat.I did put some cursory thought into Richardson over Jones. The year head start isn't that big an advantage for Jones since it usually takes WRs longer to be productive. But I really like Julio's potential. I think they'll do a lot of quick screens, etc. to him since he is so good after the catch. That should really help his PPR numbers. That same play is a big reason why Hakeem Nicks puts up the numbers he does. Also, while I like Richardson, he doesn't strike me as a sure-fire star like a Peterson where he's going top 5 and automatically going to be the center of an offense. He seems more like Ingram and will likely go 2nd half of the 1st round and you just hope its not into a RBBC.