So You Need Help With Ottoneu Arbitration

Mark McElroy discusses Ottoneu arbitration and provides some tips.

It is October 15th, and Ottoneu arbitration is now open and runs until the end of November 14th. Let’s take some time to examine arbitration in Ottoneu and look at how we should be approaching it.

There are two types of arbitration in Ottoneu: Allocation and Vote Off. Please refer to the official Ottoneu rules for clarification or ask questions in the comments below.

 

Vote Off

 

This is a simple way of getting rostered players back into the free-agent pool.

  1. Every manager has the ability to vote on a player on each other team.
  2. Once all votes are tallied, the player on each team with the most votes is turned into a Restricted Free Agent (RFA) that will be available in the auction draft.
  3. In the case of a tie, the player with the vote from the team lowest in the standings becomes the restricted free agent.
  4. Players who have been voted off cannot be traded.
  5. The team that loses the player has a $5 credit towards that player in the auction draft. For example, if Cody Bellinger is voted off my team, I can try to reacquire him in the auction. If I am successful, $5 will be removed from the price I paid at auction.

The vote off system is simple. Consider the following when casting your vote:

  1. The player with the most value/surplus.
  2. The player that you want available in the auction.
  3. The best player on the team.

If you want a player in the auction, the best way is to hope that they are voted off and become an RFA. Otherwise, a trade is the only way to roster him. The problem, of course, becomes the price at auction to add the player to your team. In order for a player to be voted off, he needs to receive multiple votes, and you can expect bidding to be fierce if multiple managers have gone to the trouble of voting him off. You can also expect other managers to push up the auction price when they see such a keen interest in a player who has been voted off. The result, therefore, is that a manager may put him/herself at a disadvantage rostering a player for a large salary.

The wiser move would be to vote for the player with the most value/surplus. In vote-off arbitration, the goal should be to remove surplus players from another manager’s roster. We don’t want another manager to get excellent production from a player whose salary is unreasonably low. Consider how much projected production a player will have in the upcoming year compared to his salary. Target the players with the largest surplus and the largest projected production.

The goal in this approach is for inexpensive players to become RFAs and have their salary more accurately reflect their production. We may want to draft them at the auction or we may be satisfied to have them on another team, but with a salary that doesn’t provide the same amount of surplus.

 

Allocation

 

Allocation is a more complex (and more fun!) arbitration system. It is the most common form of arbitration in Ottoneu leagues.

  1. Each manager has a $25 budget that they must assign to players on other teams.
  2. Each manager must allocate at least $1 to each team and cannot allocate more than $3 to each team.
  3. All allocations will be nullified if a manager does not allocate at least $1 to each team or does not allocate all $25.

Actually, allocation isn’t that complex! Just be sure to assign at least $1 to a player on every team and then allocate the remaining funds strategically.

How should you, strategically, allocate your $25?

There may be a player on another roster that you covet and want to roster. Allocating to that player may be a good way to force him to be cut and enter the free-agent pool. This is a fine reason to allocate dollar but it has a short-term impact. If allocation dollars are added to the player’s salary and then the salary is immediately dropped from your competitor’s team, there is no long-term impact of those allocation dollars and they simply disappear from the league.

A more long-term goal of arbitration is that the allocation dollars impact the player (and manager) for years to come. It is better to force another manager to take our $3 allocation hit to their salary cap in the upcoming season and also to take it, plus added allocation, in future seasons.

The goal is to allocate to a player’s salary but not to have the manager drop the player! We want other managers to be forced to a tough decision but to, ultimately, keep the player at the higher salary. That’s how we can use the allocation system to achieve better league parity (and help our chances of winning).

The benefit of the allocation system is to increase a player’s salary closer to the projected value of their statistical production in the upcoming year. Let’s look at an example of how we should approach allocation arbitration. Here is an example of a pitching staff in a 5×5 Roto league:

Pitching Staff

 

There are some players on this list (Carlos Hernandez and Shun Yamaguchi) that should not receive allocation because they will obviously be dropped. If desired, both can be re-added in the auction for less than their current salary, and there is no reason to allocate scarce dollars to them. Again, we want allocation dollars to stay on our opponents’ teams.

There are some very expensive players that could be targeted but their salaries are such that a difficult keep/drop decision will have to be made. Max Scherzer is the obvious candidate. There is a series of questions that we must consider:

  1. Do we think that Max Scherzer will produce more than $51 in statistics in the upcoming season?
  2. If Scherzer is dropped by his manager, will his cost at auction exceed $51?
  3. Will Scherzer be dropped by his manager at a $51 salary?
  4. Will Scherzer be dropped by his manager if his salary is above $51?

If Scherzer will be kept by his manager, there is no harm in increasing his salary. If Scherzer will be dropped at $51, there isn’t any reason to allocate more money to him since it will be wasted. If Scherzer will be kept at $51, but dropped at $54, we can allocate the money to put some pressure on his manager. That could encourage Scherzer to reenter the auction draft and, if he does, we want to prevent any value from going to another manager, so we should be prepared to bid other managers up to a salary near projected production. If you love Max Scherzer next year and think you can get him for a discount, forcing another manager’s hand may be the play, but consider making a trade, instead.

In this case, it’s probably best to ignore Scherzer in arbitration. We need to consider the rest of the team. This team made a lot of trades and took on a lot of loans so, currently, the team salary is $618. That means that Scherzer is likely a drop candidate at $51, and adding to his salary will only make his manager’s decision easier. We also need to think about the fact that he is already very expensive so his manager is already using a hefty chunk of his overall budget. We also probably shouldn’t expect him to produce more than his current salary.

The best solution, in this case, is to avoid allocating funds to Scherzer, and the larger lesson is that we can probably avoid allocating to expensive players altogether. Instead, look for players on other teams who may be “deals” or bring “value”. Some potential targets, in this list, are Chris Paddack, Hyun-Jin Ryu, and Kenta Maeda.

One resource that you can use to gauge a player in Ottoneu is to find his average salary. Clicking on the player will bring up his player page with his average salary and the average salary in his last 10 (L10) adds. Be sure to consider the salary for the league format that matches your league (rather than all leagues, because they can be quite different). Chris Paddack‘s $20 salary is higher than his $12.47 average and higher than his $18.80 last 10. There is a chance that Paddack will be dropped at $20, but a player like Paddack was likely added for cheap many seasons ago, and his salary has not increased as much as it should, perhaps.

In Paddack’s case, his manager might have soured on him and want to drop/trade him or his manager may believe that a breakout is near. While $20 is above average, it isn’t egregiously so, and allocating salary to him seems reasonable. Again, as in the Scherzer example, adding allocation dollars might simplify the manager’s keep/drop decision. There is a fine balance here. Ideally, the manager keeps Paddack at $20 because he/she expects him to earn $22, and he ends up earning $16 in production.

Hyun-Jin Ryu is a player whose salary seems appropriate. His average salary in 5×5 Roto is $11.12 and his L10 is $13.60. Ryu seems like a player who will not be dropped and allocating salary to him is viable. This will hurt his manager if he/she does decide to keep him and, at the very least, will force them into a tough decision. There is a chance, also, that Ryu will be dropped, and I (as the allocator) could win him in the auction for a lower salary. That might be something worth doing.

The most interesting allocation target on this list is Kenta Maeda. Maeda is coming off an excellent 2020 and will be highly targeted in upcoming drafts. In Justin Mason’s #2EarlyMocks, Maeda is the 51st (31 high, 63 low) player off the board and the 17th starting pitcher. His $9 salary is, therefore, very low. His average salary in 5×5 Roto leagues is $12.99. This seems like an excellent target for allocation dollars. Targeting a player whose salary is lower than what we believe he will earn in 2021 should be the main goal: it brings the player’s salary up closer to what it “should” be based on his production and deprives the manager of the surplus they have gained from that player’s gap between the value of their production and their salary.

It is more beneficial to have our competitors retain the player at the higher salary. We want our allocation dollars to have an impact on the other team. When a manager drops a player, the allocation money is completely wasted and we really want our $25 to be spread into the salary caps of other teams. This has two impacts: one, it puts other managers under increased cap pressure; and two, it reduces the available dollars that other managers have available in the auction draft.

We want other managers to eat a high salary and not give them the luxury of dumping a high-salary player. As Chad Young put it in his 2012 article, Ottoneu Arbitration Guide, “I don’t want other owners to be able to easily cut loose the allocated dollars. Instead, what I want is to take a guy who should be kept at $25 and cut at $26 and make him cost $23 or $24 – enough that the [manager] keeps him this year, but has a really tough choice in subsequent seasons.”

 

Prospects

 

The general consensus on allocating arbitration dollars to prospects is that it should be avoided. Tampa Bay Rays’ prospect Wander Franco is a likely arbitration candidate, so let’s consider allocating to him.  Let’s say that Franco’s salary in this league is $10; his average salary in 5×5 leagues is $8.99, with an L10 of $16.20. Should we allocate dollars to Franco’s salary?

Chad Young’s article Avoid Rookies with your Ottoneu Allocations is an excellent treatise on rookie allocation. His argument is that it is best to assign arbitration to more established players on a team rather than their rookies because it has a much longer-term impact on your opposition. His point is that rookies have a couple of potential outcomes: breakout or bust.

Since rookies are inherently volatile, the safest play is to assign the dollars that would go to Franco to other players on his team. That way, if Franco breaks out, his manager gets value on Franco, but still absorbs the ~$25 in allocation to his/her team. If Franco doesn’t break out, the manager still has that ~$25 hit to his salary cap because it was assigned to other kept players. If Franco busts, the manager can just drop him. If that ~$25 was allocated to Franco’s salary, it leaves the team and frees up its manager to spend on free agents. If Franco’s salary is low and he succeeds in the upcoming season, he can always have his salary boosted in next year’s arbitration. In that scenario, too, the arbitration dollars allocated to the other players on the team may still remain on the team and have an impact in the second season.

The most salient point here is that assigning big allocation dollars to Franco is risky because it only makes sense if he breaks out. Why deal with that risk? If the team has to absorb a ~$25 boost in salary, why not just spread that out to numerous, established, low-salary keepers. That way we know that the team/manager has to take on that salary cap hit and will more likely have to do so for the whole season.

Since everything has to go right for prospects and the chances are low that they will, the best bet is to avoid prospects and to allocate to established players with low and mid-range salaries.

 

Resources

 

There were many resources that I found beneficial while preparing this article and for my league’s arbitration. The best resource that I came across in my preparations is Brad Johnson’s Ottoneu Arbitration Omnibus. It is a great annotated bibliography of many of the best articles on Ottoneu arbitration strategy, with dozens of links to other articles that provide a tremendous overview of the process and how managers should approach it.

I also found Chad Young’s work over at Rotographs to be very helpful. Some articles are many years old, but were still relevant to the conversation and provided me with key insights.

 

Final Thoughts

 

Do not procrastinate when it comes to allocation arbitration. Your early participation is necessary to help other managers make their decisions. Ottoneu arbitration can’t work effectively unless all managers work together to allocate their funds in a unified way.

The arbitration period will remain open from October 15th until the end of November 14th. Allocate your $25 dollars early and don’t worry about your allocations being perfect because you can adjust them as many times as you wish before new salaries lock at the end of the day on November 14th.

For each player, their original salary will be visible as well as the allocations made by other managers (Other Adjustments). This will give you a good idea about how others are distributing their dollars and which players to whom you should allocate. You can’t make an informed decision without the information from other managers, so do your part by allocating early.

Later in the arbitration period, go back and make some adjustments based on the moves made by other managers. That might mean removing allocation dollars from some players and adding to others, or boosting up some of your targets.

We want balance and we want as much bang for each allocation buck. We hope that other managers feel the pressure of salary increases and that the salary constraints felt by other managers will put us in a better position to win.

 

Images by Icon Sportswire | Adapted by Justin Paradis (@freshmeatcomm on Twitter)

Mark McElroy

When I am not watching baseball or writing about fantasy baseball, I can usually be found cycling in and around Victoria, BC. I contribute at Pitcher List and Creative Sports and can be found on Twitter @markmcelroybb.

2 responses to “So You Need Help With Ottoneu Arbitration”

  1. Great article. I am new enough at Ottoneu that I need reinforcement learning. What I do is make my initial allocations and then revisit each week thereafter. I also take notes on each player I allocate to. Those notes make the weekly adjustments much easier.

    • Avatar Mark McElroy says:

      I think that this is completely the right approach. So much depends on the allocations of other managers. The first pass is just a rough draft to get an idea of what the landscape is and to provide other managers with some help to make their allocations. It is also vital to pay attention to off-season surgeries and signings that happen before the end of arbitration. Adjusting according to the news is a big part of the process.

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