Rookie Picks, Waiver Budgets, and Optionality

Nick Canzanese

Many dynasty leagues use a waiver budget system (known as FAAB to some) to acquire free agents. Even so, it’s not usually examined from a dynasty perspective. I think it should be. It’s true that most waiver budgets reset at the end of the season, but many leagues allow trading part of your budget (hereby referred to as “waiver dollars”) for other assets. (If your league doesn’t allow this, it should!)

To consider a team’s waiver budget as part of its dynasty arsenal, we need to consider how it relates to the two main other assets a team has: Players and picks. Most owners already have a general idea of how to relate waiver dollars to players. Therefore, the key to gaining a competitive advantage over other owners in your league is to understand how to value your waiver budget relative to rookie picks. In doing so, you can find unique opportunities to profit via trades.

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Rookie picks eventually become players. Perhaps a good way to value picks against waiver dollars is to consider a player you’d likely take with that pick. If that player were on your waiver wire, how much would you spend? The answer to that question likely depends on your league. Shallower leagues will have a more competitive waiver wire, some leagues allow waiver dollars to carry over to the next season, etc. Thus, I’m not here to tell you how to value specific rookie picks in terms of waiver dollars.

What I am here to do is share with you my findings on how the public makes these valuations, and my recommendation on how to exploit it: Consider selling your late rookie picks for waiver dollars. What follows is a list of reasons to support my argument.

1: Few are willing to sell rookie picks for waiver dollars, many are looking to buy.

It was my belief that owners would have an inclination to favor one direction over the other. So I took to Twitter with the following poll:

Owners appear inclined to buy rookie picks using waiver dollars, as expected given their traditional desirability. This means that demand for your rookie picks will increase, giving you a higher baseline for return value when you sell a rookie pick for waiver dollars.

2: Buying early rookie picks cheap will probably be difficult.

In order to get a general idea of how people value rookie picks in terms of waiver dollars, I conducted a poll on Twitter and the DLF forums last August. I figured a good baseline would be the valuation of 100% of one’s waiver budget vs. a single rookie pick in a league with a three-round rookie draft. Here are the results:

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While 87% of people would be willing to buy a first round rookie pick (or lower) for 100% of their waiver budget, only 12% would be willing to sell a first-rounder for that price. While over half of owners would sell second round picks for that price, digging deeper into the data showed there was a steep drop-off once the late second range was hit. In fact, almost 20% of owners wouldn’t sell at all.

Third round picks seem the easiest to buy and sell: 89% of respondents indicated they’d be willing to sell a third for some price, while 15% of respondents indicated they’d spend their entire budget to buy a third. The latter doesn’t help us much, though, since more owners would presumably sell at a cheaper price. So I asked about that as well:

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There wasn’t a significant difference between pick values in the early and mid third round picks, but there was a small drop-off in the valuation of a late third. While almost everyone indicated they’d buy a third for some price, the most frequent response was in the 1-25% range.

That may not seem like much, but remember that the price of rookie picks increase while they’re on the clock. Much has already been written about this idea, but it’s worth noting that it applies here as well. Last year, I ended up trading the 3.04 for 50% of the league’s waiver budget while I was on the clock. The motivated owner really wanted Jeremy McNichols. I don’t think he would have made that trade two months earlier. For that reason, the prices indicated in the previous chart would likely inflate while on the clock when the pick can more easily be envisioned as a player.

3: Optionality

Former Philadelphia 76ers basketball team general manager Sam Hinkie defined optionality as “making a decision as late as possibly can to gain as much information as you can.” Suppose you had the option of adding one of two players to your roster during the off-season. All other things equal, you’d like to wait as long as possible before making that decision, even if that meant waiting until midseason. But fantasy football doesn’t work that way because someone else would acquire those players before you decided.

What if I told you we could cheat the system by selling third round picks for waiver dollars? It’s a perfect optionality strategy. Not only do you gain an extra roster spot in the short term, you also put off the decision as to how to best fill that roster spot until later in the off-season, and possibly even during the regular season. The difference in value between a player you’d take in the third round of the rookie draft is not that different than the value of the first few rookies (or veteran free agents) off the waiver wire throughout the rest of the off-season. The talent pool of the rookie class doesn’t know your rookie draft ends after X picks, so the drop-off between the last pick and the first group of players off the wire is minimal.

Furthermore, your waiver dollars would probably be put to better use than the third round pick would because you’d have more information at your disposal by that point. When you’re on the clock in the mid to late third round, you’re essentially choosing from a large pool of players with roughly equal value. If you could delay that decision in exchange for some waiver dollars and only a slight thinning of the pool, wouldn’t you take it?

There are multiple players each year who break out while on the wire and cost a large percentage of the waiver budget to acquire. Our goal should first and foremost be to identify these players before that point and have them rostered already. Yet even the shrewdest of leagues see some of these players remain on the wire long enough for a bidding war to erupt.

The purpose of waiver budgets is to level the playing field among all owners so that one owner can’t monopolize the big waiver wire gems. Wouldn’t it be nice to have an advantage over the rest of the league in this regard? I think the decision most of us face in these scenarios is usually “is this the player I want to spend most of my waiver budget on?” By acquiring waiver dollars for low-value rookie picks, you face this dilemma much less often! You get your hat in the ring on more of these players than anyone else in your league. To cite my previous example, I used a large portion of the extra waiver dollars I acquired by passing on McNichols in the third to acquire George Kittle, the current dynasty TE9, during the regular season.

Conclusion

I’m not advocating you give away your third round picks for whatever amount of waiver dollars you can get. I don’t think you’d gain much of an advantage only acquiring five or ten percent of the waiver budget in exchange for rookie pick assets. Furthermore, there may be the opportunity to do the opposite and buy up rookie picks using waiver dollars if the price is right. Lastly, like I said before, every league is different. The market may not justify selling picks like this in some leagues.

My recommendation is that if you have one or more third (or fourth) round picks and there’s no second round value on the board, examine your league settings and consider making the pick available for trade. Not only for players or future picks, but also for waiver dollars. There should be many owners eager to grab their must-have player without forfeiting their own pick or player. If you find a willing trade partner, you’ll likely be preparing yourself to make better use of that roster spot than they are.

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