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Auction Waivers (FAAB)

Why Your League Should Use Auction Waivers:

It only makes sense if you do an auction draft, that you also utilize auction waivers to add and drop players during your fantasy football season. Even if you do not do an auction draft, auction waivers can be a good way to introduce your league to the auction process. Most leagues that do auction waivers have a Free Agent Auction Budget, or FAAB. My preferred setup for this is as follows:

  1. Have a $200 Auction Draft Budget
  2. Have a $100 Free Agent Auction Budget.
  3. Allow Unspent Draft Budget Money to Roll over to the Free Agent Auction Budget.
  4. Run Auction Waivers each week, and then allow players to be added or dropped for either $0 or $1 (Having a minimum of $1 is recommended).
  5. Give Additional Free Agent Auction Budget Money to Your Playoff Teams.
    • This is a reward for making the playoffs.
    • This allows everyone to continue playing and win loser's brackets or avoid last place punishments, but gives those managers who reached the playoffs an advantage when picking up players during playoff weeks.

Some of the same reasons we have auction drafts apply to auction waivers. It allows all teams the ability to bid on the services of a player, not just the team who is in last place. We don’t want to reward managers who do not pay attention enough to field a decent team or forget to change their lineup with first waiver wire choice. If you draft and lose a stud Running Back and that player’s backup is on the waiver wire, why should the last place team have an advantage in picking that player up? I think most managers who use auction drafts agree you should use auction waivers; it just makes sense to at least allow everyone an opportunity to bid on the services of free agent players. Now that I hope we all agree that auction waivers are the right way to go, we need to discuss the strategy of how to pick up these players, and how much to spend on them.

FAAB Budget Options:

There are multitudes of ways to setup your free agent auction budgets. None of these are right or wrong, they are just options to consider.

Rollover: One option is to allow managers who do not spend all of their auction money, to roll that amount over to their FAAB.

Amounts: FAAB budget should be approximately half of your actual auction budget. In theory, there are considerably more players available during the pre-season auction (At least starting caliber players) then there are during the year. This is why it is typical to have a FAAB to be half of the original auction budget. While good players available on waivers will usually sell higher than they may have in the pre-season auction, it makes sense to have this budget be less than your original auction budget. The only potential difference is in keeper leagues.

Keeper Leagues: If you are in a keeper league, free-agent pickups have longer term ramifications. If injured players can be picked up and kept for future seasons, than FAAB budget amounts may need to be higher. If managers can pick up high-end players who have been dropped because of injury, the cost of the players needs to be closer to their value in next year's auction. This can either be done by having FAAB budgets be higher, which will result in higher prices being paid, or by having some sort of escalator for all players that are kept.

Injury: If you do your draft auction early in the year before pre-season games start, if a player is injured you could give the amount of money paid for that player as extra FAAB.

Playoffs: In order to reward fantasy managers who make the playoffs, you can give them additional FAAB in order to give them an advantage during the playoff weeks over teams that can no longer win your league. This still allows all competitors the opportunity to improve their teams and records, but gives priority to the managers who are fighting for a championship.

Auction Waiver Tips

1. Understand Sealed Bid Auctions. As waivers typically process on most fantasy league sites in the middle of the night, auction waivers are not done in a live or real time setting like your original auction draft. In the auction industry, we refer to these types of auctions as Sealed Bid Auctions. In the auction world, sealed bid auctions are used for a few key reasons. First, it allows the seller of property to see multiple potential buyer’s bids at once. This lets them have an option other than selling to the highest bidder, as it may be a competitor, or they prefer the terms of a lower bid. Second, it avoids potential embarrassment if there are no, or only low bids at a live auction. If word got out that bidders only bid half of what a seller wanted, it becomes very difficult to ever get close to what they want. Third, if you are only doing one round of bidding, you should be getting each buyer’s best bid. We had a real estate auction once where we knew there was only one real buyer for the property who showed up at the auction. We decided to do a sealed bid auction, because we did not want to play games by pretending other people were bidding at a live auction. There were still quite a few curious people there, so we just announced if you wanted to bid you had to put your bid in an envelope. The one interested buyer we knew was there put in a bid that was enough to sell the property, as were unsure if they were bidding against anyone else. This is the first key thing to remember when making your auction waiver bid…

2. Don’t Bid Against Yourself. We see this in baseball quite often when historically, a team like the Yankees seems to pay significantly more than what any other team would have paid. It is fine to be a big spender and pay for talent, but you need to make sure you are never paying significantly more than the runner up bidder. The key to NOT doing this is to understand value when it comes to your fantasy team. You never want to be the individual who pays $50 for a player, when everyone else was valuing them at $10 or $20.

3. Set a Budget. Just as you do for your auction draft, you also need to make a plan on when and where you will spend your auction waiver budget. This is where you try to avoid being the Yankees, but instead be the “Moneyball” Oakland A’s who pick up productive players at reasonable prices. If we had a $200 auction draft budget, we most likely spent $40-$50 on a #1 running back, and $20-30 on our number 1 WR, our #2 running back, and maybe on a quarterback. When we are looking at spending our Free Agent Auction Budget, it is important to keep these numbers in mind. The key to budgeting is to try to divide your $100 based on what you think you may need for the year. Most likely, you will want to be able to spend on a #2 or #3 level running back and maybe two or three wide receivers in that level. You will probably need a tight end at least for bye weeks, and maybe a quarterback. At some point in the year, you will usually have at least one injury on your team, so you need to have money saved for when that occurs. I am not a huge fan of spending any money on kickers, you should just be able to add and drop these for a $0 or $1 bid, whichever is the minimum in your league. I think every time I change kickers, the one I drop has a better game than the one I added every time. There are the least predictable position in fantasy football, so add and drop them at will, but don’t spend any extra on them.

4. Understand Supply and Demand. You always need to be willing to pay a free agent player what other similar players sold for in your original auction draft. In actuality, you may have to pay more. This is where scarcity and the laws of supply and demand come into play. There are always going to be competing managers who have similar needs to yours. There are no longer 10-12 top running backs in your auction draft, now there is only one good running back on waivers. So, instead of paying $30 for the 6th best running back, you may have to pay $60 or more, to get a player of this level.

5. Timing is 90% of Life. My family always used this line at auctions, meaning the auction is now, and you have to make a decision that will potentially alter your life, or in this case, your fantasy football season, and there is not a lot of time to make it in. In fantasy leagues, timing comes into play in two ways. First, is at the beginning of the year, when a league overlooks drafting a player who is going to be good the entire year. In 2012, Alfred Morris went undrafted in many leagues, and after the first week, most astute managers could see he was going to have a great season. The first week of the season is the first real chance we get to see how rookies and players on new teams or with new coaches are actually going to fit together, have actual roles defined and produce fantasy points. You have to be willing to realize when this is happening and be willing to spend on these players right away.

Second, is where your personality and strategy come into play; whether you want to be an aggressive manager, or if you prefer to be more conservative and not miss players later in the year. Often times, there are some popular names on the waiver wire at the beginning of the season, and some fantasy competitors jump on these players and spend all of their free agent dollars early. Or a top player goes down, but is only going to be out a week or two, but a manager puts in a large bid for their backup who is only going to start a week or two. Other managers prefer to sit back and wait for injuries to occur and for opportunities to happen later in the year that they can take advantage of. There is not necessarily a right or wrong way to do this, but the key is to handling this correctly is to... 

6. Understand Value. All Players Value are Not Equal to All Managers at the Same Time. In addition to being an auctioneer, I am a certified real estate appraiser. There was a mini-crisis in the real estate market in the 2000’s in regards to Manufactured Homes. The foreclosure rate on these homes was much higher than any other type of housing and so the government needed to figure out why. It turned out, when buyers went to a manufactured home dealer, before they would tell them the price of the home, they asked if they had any auto loans, credit card debt or other obligations they wanted to roll into the price of the home. Based on what they buyers said, the price of the home fluctuated. If you were a cash buyer, the home might sell for $50,000. If you had $20,000 in debt you wanted rolled into the purchase, the price magically went up to $70,000 or $75,000. (In case you were wondering, appraisers now have to see the full invoice for the cost of a manufactured home to make sure other debt is not included in the purchase price of the home). 

The point here is, if you have just lost a starting player to injury, the price you need to pay for a free agent player is going to be higher than for someone who is just looking to improve their bench for bye week replacements, or upgrade their second RB or WR. It is the same player, but their value is different depending on your situation. The value of a player on which you spend your free agent waiver budget, should correlate to how many games that player is going to start for your team. If you lose your #1 running back the first week or two of the season, like Jamal Charles in 2011, then it is most likely going to be worth it for you to spend a lot on a running back. If it is week eight, and you have three great running backs on your team and are only going to play someone one week, then it is not worth it to you to spend very much of your waiver budget on a running back. To reiterate, the amount you pay for a player on waivers, should correlate to how many games that player is going to start for your team. If you are looking for a bye week replacement, then you should be spending a maximum of 10% on this type of player, and hopefully getting them for near the minimum. If you have just lost a top RB in week 1 and they have a backup that is solid that will start for your fantasy team, then you should be paying 50% of your budget, or more, if that player is going to be starting for your team multiple weeks. A good rule of thumb is to spend 5% of your waiver wire budget for every week that player should start for your team. Conversely, if you did not lose a player and a backup becomes available, if they are not going to start for your team, or only do so during a bye week, it would not be wise to spend 50% of your FAAB on that player.

7. Values Fluctuate. How many times do you draft or pick up a player early in the season, just do drop them later, and then watch them blow up and have to pay a lot to get them back? You hear a fantasy expert say you should stash a player, and so you do. But then you hear about another player everyone is saying you should get, or you have to have someone to play during a bye week, so you drop the first player and pick up someone else. You had next to nothing invested in the first player and think you will not lose picking up the latest waiver wire star. Then the player you dropped has a big game and becomes the waiver wire flavor of the next week. It is hard to predict injuries and opportunity for backup players, but don’t be afraid to pay for someone that you dropped, that you think now has a better opportunity.

8. Anticipate Players with Potential Values on the Rise, or at Positions you Need. I try to look at the roster of each of my teams on Sunday morning before games start each week. I pay special attention to bye weeks and the players on the end of my bench. If I know I am going to need a player for the following week at a certain position, I look at the players who are not going to start this week for my team. If I know I have to drop someone the following week, and I am not playing them the current week, it is smart to go ahead and pick up the player at the position of need the week before you need them. This way you can get in your waiver claim at the minimum number, and not have to worry about going through auction waivers the following week, when everyone else figures out they need players at those positions too. Looking ahead one week, or even two weeks at a time, will allow you to have a better selection of bye week fill-ins than managers who wait until the week they actually need the player. I also love to try to do two-for-one trades, where I give up two solid players for one good one, as this allows me to pick up one more flyer who may be needed in subsequent weeks. If there is a player on your waiver wire that you feel is about to break out, drop the disappointing player on the end of your bench Sunday morning and if the break out occurs, you will be in a great position, and if they don’t, you haven’t really lost anything. Just as in real football, you should always be churning the bottom of your roster looking for the next breakout player. Also, don't forget about Kickers and Defenses, as adding and dropping them a week early can also be beneficial.