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How to Allocate Your Salary Cap

When it comes down to it, winning on DraftKings is about figuring out where and how to spend your money; you need to properly allocate your $50,000 salary cap to the right players. Individual player evaluation is of course a big part of that, but I…

When it comes down to it, winning on DraftKings is about figuring out where and how to spend your money; you need to properly allocate your $50,000 salary cap to the right players.

Individual player evaluation is of course a big part of that, but I think some people sometimes overlook the value of spending money on the right positions. As important as it is to hit on the right players, there’s a lot of variance from night to night and week to week. You can increase your odds of hitting on a player with astute research, but perhaps just as important is continually paying for the “right” positions and putting yourself on the right side of variance. So what are the “right” positions for which to pay in NFL?

Salary Cap Allocation and Ranges of Outcomes

Most daily fantasy pros will tell you that, in most cases, they allocate the majority of their salary cap to the most consistent, predictable positions. In baseball, that’s pitching. In football, it’s quarterback and running back.

There are a number of stats that show that quarterbacks and running backs are more predictable than receivers on a week-to-week basis, but it makes intuitive sense, too; the former two positions see heavier workloads, so their production has a higher probability of regressing toward the mean.

Ultimately, that means a narrower range of potential outcomes. Quarterbacks aren’t as likely as receivers to double their average fantasy production in a given week, but they also have much higher floors, too. Quarterbacks, especially the elite ones, rarely stink it up for you. Meanwhile, even the best wide receivers and tight ends can lay a dud in any given week. When there’s value in knowing what you’re getting, such as in 50/50 leagues, it makes sense to pay for consistency. Thus, much of salary cap allocation comes down to defining a range of potential outcomes for each player, which is very much based upon his position.

The “Right” Position to Pay For

The “right” position for which to pay, however, isn’t the same all the time. It depends on your risk tolerance and your goals for each particular league.

In a 50/50 league, for example, many daily fantasy players find success by trying to maximize the floor of their lineup. That is, they don’t necessarily need an elite ceiling, but rather search for consistent production. Again, that consistent production typically comes from quarterbacks and running backs. In GPPs, the conventional wisdom suggests to embrace volatility. That means, perhaps, forgoing the top-tier players at the predictable positions and paying up for variance. Thus, the “right” positions for which to pay depend on your goals, which are inherently tied to your league type.

The Data

Luckily, I have some DraftKings data on what actually won NFL leagues in 2013. With results from over 10,000 individual leagues, the numbers are significant.

Remember, the general consensus is that you should pay up for the most predictable positions in cash games, but you can deviate from that plan a bit in tournaments. In the latter, you should be much more willing to embrace variance, which paying up for receivers allows for.

To test this idea, let’s take a look at the typical salary cap allocation of lineups that won 50/50s in 2013. Note that kicker is included here, but has since been abolished by DraftKings.

In a vacuum, these numbers don’t have much meaning. Is 16.5 percent of the cap a lot to spend on passers? It’s tough to say without analyzing other league types, so here’s a look at the typical allocation of funds for lineups that won tournaments.

These differences might appear small, but with such a large sample, they’re quite meaningful. By comparing what’s winning GPPs versus 50/50s, we can get a sense of when it’s right to pay for consistency. Here’s how the percentages break down when we compare the two leagues.

QB: 0.7 percentage points more in 50/50s

RB: 0.2 percentage points more in 50/50s

WR: 0.1 percentage point more in tournaments

TE: 0.5 percentage points more in tournaments

FLEX: 0.2 percentage points more in 50/50s

D: 0.5 percentage points more in tournaments

Again, the exact percentages themselves don’t matter, but the differences between the two league types are important. And in 50/50 leagues, winning teams are paying more for elite quarterbacks, especially. As the most predictable position, by far, this isn’t a surprise. If you want to improve your odds of winning a cash game, you can and should pay up for a top-tier passer. Winning 50/50 lineups have also paid more at the running back position, too.

Meanwhile, winning GPP teams have slid down the salary ranks a bit at the quarterback and running back positions, allocating more of their cap to wide receivers, tight ends, and defenses. These three positions—tight ends and defenses, especially—are much more volatile than quarterbacks and running backs on a weekly basis. The evidence seems clear that the consensus is correct: allocate a higher percentage of your salary cap to predictable positions in cash games, but less of your salary cap to those same positions in tournaments.

How to Allocate Your Cap

Every week is unique. Sometimes there are backup running backs who are such obvious values that it would be silly to not add them into your cash game lineups. You shouldn’t try to match up these percentages to your actual lineups each week.

However, the idea that the overall numbers don’t matter is also untrue. If you are continually fading the top quarterbacks in your cash games, you’re probably going to struggle. On the whole, you should pay up for the most predictable positions in your cash games, all other things equal.

Much of this idea comes down to how much confidence we can place in our projections. The best daily fantasy sports players don’t search for exceptions to the rule, but rather play the percentages the majority of the time, deviating from that plan only when there’s significant evidence that they should do so. Yes, sometimes it makes sense to move in a different direction, but when you’re unsure which is the right plan of attack, it’s normally the one that has displayed the superior long-term success.

By understanding where and how to allocate your cap space, you can tilt the odds in your favor this year on DraftKings.