Roughing the Kicker: A Study in Dynasty Profitability (Part Two)

Eric Burtzlaff

math

Parts two and three of this study will focus very heavily on analysis from a spreadsheet I created for this article. I will attached screenshots of the spreadsheet but before I just senseless did that, I wanted to explain each value in the spreadsheet.

Variable X, Y, Z, and Q were explained in Part 1 of this study so if you want a lesson there, please go back to that article. The “payouts” are pretty straight-forward as these are going to be the overall payouts for each place in your league. The Buying, Prize Pool and Hosting fee are always very straight-forward and are based on what your overall buyin is and what you are paying for hosting fees.

The statistical data table is a bit more confusing. I have broken out the odds of finishing in each cash position in your league based off of Variable X. Chances of being the champion are calculated as X * Y * Z. Chances of being Runner up are X * Y * (1-Z). These formulas are used for each position. Expected Gains are what your profit will be before your league buyin is subtracted. Profit is the Expected Games minus buyin. Lastly, Weighted Total profit is calculated as a weighted average of all profit to how likely it is to occur. These weighted total profits are summed up to give us our expected total profit for each scenario.

That total profit per year is then divided by the amount invested to get Rate of Income or ROI. This tells us how much profit we are making with each investment at this win-rate. Next, the profit for the year is multiplied by 3 to determine what our three-year window at this win-rate will net us. Lastly, the 3-year profit is divided by the league buyin to tell us how many years we can go without making the playoffs.

Finally, the punt calculator runs your total yearly profit into how much money you have punted before getting to your peak and figured out how many seasons it will take you to breakeven on your punt.

I will make this spreadsheet available to the public after all parts have been published. Let’s get into the math… glavin!

Winner Heavy Payout Model Analysis

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In a winner heavy payout model, there is major reward for making the championship game and absolutely no reward for anything else. Also, you’ll notice the numbers don’t match the ‘ideal’ numbers in part one as the hosting fee has been taken out of the prize pool.

Analysis WH-1: We will assume that we make the playoffs 90% of the time. I view WH-1 and an X of 90% to be the highest possible win-rate in dynasty football that could be sustainable over any period of time. It would require a league full of people very recreational players but such leagues definitely exist where a savvy dynasty player might come into the season as a massive 90% favorite. We’ll consider this to be the maximum potential earnings in Winner heavy payout model.

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What we find here is a dream come true for a student of dynasty football. Each year we will be making nearly 4 buyins in profit and we hit our 3-year window at this insane rate, you can straight-faced tell your wife/husband that you are turning a profit for the next decade.

The punting strategy no surprise looks amazing here. We never have to wait (much) more than a year after our team peaks to get our money back. Punting is looking pretty great here. Honestly though, everything is looking pretty good here.

This is many sexy profit time.

Analysis WH-2: X is equal to 75%. WH-2 is a more realistic approach to a team peaking. With all the variance which exists in the fantasy universe, you’ll be doing well to make your playoffs as a favorite 3 out of 4 years.

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WH-2 still yields a large ROI of two buyins profit each year played at this level. This is a clip many dynasty experts could conceivably maintain for long runs of time. You will have enough profits in your 3-year window to maintain 5 straight years of re-building to get your team back to the top.

Punting, once again, doesn’t look that bad. You will be back to even after one year if you take a 2-year punt. Let’s take a look at another playoff rate.

Analysis WH-3: X is equal to 60% or the breakeven point.

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In WH-3, we seem to be coming into a scenario where we can’t just enjoy our profits one year and wait a couple more to breakeven. If we make the playoffs 60% of the time and are roughly 50/50 to win each of the playoff games, we have a 68.29% ROI. Resulting in a 2 year break even window. Statistically, if all teams are equal, you will be 33% (4/12) to make the playoffs. A 60% playoff rate is still going to be above average.

Our punting strategy is starting to get a big painful but not nearly as bad as I was expecting when we got to this level. If we punt 2 years and get our team to a 60% win-rate in year 3, we will be even by year 5. That’s not bad considering we gave away 2 years of profits in the beginning.

This win-rate is very doable in the long-term for a solid dynasty player.

WH-4: X equals 50% or you are 50/50 at the beginning of the year to make the playoffs

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To my surprise, at 50% we are still making profit each year and essentially breaking even. Our punter isn’t happy but they are really only giving away the buyins it takes them to get to a 50% playoff rate. Once they get to peak, no more loss.

The winner heavy payout model is perceived to make people go all-in or go home. I think I’ve actually MADE a case for punting here in this league setting. Also, I’ve proven that as long as you can find a high playoff rate 3-year window, it’s not that unforgiving either. Regardless of how you do it, if you can find a high playoff rate in this format for a couple of years, you will be set for a very long time.

I also went ahead and ran a few different buyins of the Winner Heavy Model assuming the same percentage of payouts and same settings in all the anaylsis above. The breakeven playoff rate in $10, $25, $50, $100, $250 and $10,000 buyin leagues are 65%, 52%, 48%, 47%, 46% and 46%. As our buyin increases, the hosting fee becomes more negligible and therefore the true playoff rate necessary in a winner heavy payout system is 46%. You give away a lot of edge by playing anything lower than $25 buyin.

No surpise, the Winner Heavy model is best for an owner who will make the championship game at a high clip.

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