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- May 7, 2015
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Thought as our cows are maturing it's worth looking at how Supercoach pricing works. I often here some inaccurate information and I think it's important to have a reasonable understanding to ensure you jump off the cows at the right time.
One of the things that irks me is people say about cash cows "When your breakeven approaches your average then it's time to jump off". Whilst this can be true, if you follow this religiously it can result in you jumping off a rookie much too soon.
Every year there's a "magic number". This year the number is 5500. We'll use Danger as an example to give you an idea why there was no way I was starting with Danger this year. It's also helpful he's only played the 2 games so hasn't changed yet. Danger averaged 136.4 in 2017. Bear in mind numbers are roughly correct, there is some rounding as his average wasn't exactly 136.4.
Average (136.4) * 5500 = $749,800
This will give you the starting price. Players who didn't play a full season get a price discount. For example, Coniglio averaged 91.4 in 7 games last year, but his starting price of $452,400 means he is priced at an average of 82.3 (a discount of roughly 10% for only playing 7 games).
How do price changes happen? Let's look at Danger:
Current price $749,800
His scores are 130 and 100 - price changes are based on average over past 3 games. If he scores 115 that means his 3-round average will be 115. This equates to a price of $632,500.
The weekly price change will be 25% of the difference between current price and price based on 3-round average. So this is about $29,000.
BUT - to confound this further, there is also a scaling factor in the background. This seems to result in the total player price for all players staying roughly the same. Because rookies are jumping in price this means everyone else needs to surpass their starting average just to maintain their price. This scaling factor seems to be around 10% in early rounds.
So in fact, Danger's 3 round average of 115 only equates to a price of around $570000, with a magic number around 4950. So if he does score 115 he will drop around $45,000. Danger actually needs to average 148.7 across 3 rounds just to maintain his starting price. This is why his breakeven is 216 instead of 179 which would give him an average of 136.4 across the first 3 rounds.
As the season progresses, the rookie price increases reduce and therefore the amount he needs to maintain his price will reduce back towards 136.4.
So what does this mean for cash cows?
Tim Kelly - averaging 108.3. Multiply by current number 4950 = 536,085. Difference is about $420,000. One quarter of this is $105,000. His price increase was $114,000 - so this is all rough calculations and we don't know the exact formulas used in the back-end, but you can see it's pretty close.
So back to my original point. Let's say you have a rookie averaging 70. Priced on this average his price is somewhere in the range of $350-385k. Currently his price has increased to $250k. But, his last 2 scores are 70 and a concussion-affected 30. So his breakeven is around 50 based on his current price. However, we expect him to keep scoring 70 so his price will continue to increase another $100k once that 30 cycles out of his 3-round average.
My approach is to look at what they're averaging and work out what their final price will be, in this example $385k. I'd then jump off when they get to around $50k of this price. Once they reach that point their price increases each week will only be around $10k so further gains will be pretty slow.
Hope that all makes some sense. So you also see why Danger was always going to drop in price unless he went nuts and averaged 150 (which was unlikely when returning from a hamstring).
One of the things that irks me is people say about cash cows "When your breakeven approaches your average then it's time to jump off". Whilst this can be true, if you follow this religiously it can result in you jumping off a rookie much too soon.
Every year there's a "magic number". This year the number is 5500. We'll use Danger as an example to give you an idea why there was no way I was starting with Danger this year. It's also helpful he's only played the 2 games so hasn't changed yet. Danger averaged 136.4 in 2017. Bear in mind numbers are roughly correct, there is some rounding as his average wasn't exactly 136.4.
Average (136.4) * 5500 = $749,800
This will give you the starting price. Players who didn't play a full season get a price discount. For example, Coniglio averaged 91.4 in 7 games last year, but his starting price of $452,400 means he is priced at an average of 82.3 (a discount of roughly 10% for only playing 7 games).
How do price changes happen? Let's look at Danger:
Current price $749,800
His scores are 130 and 100 - price changes are based on average over past 3 games. If he scores 115 that means his 3-round average will be 115. This equates to a price of $632,500.
The weekly price change will be 25% of the difference between current price and price based on 3-round average. So this is about $29,000.
BUT - to confound this further, there is also a scaling factor in the background. This seems to result in the total player price for all players staying roughly the same. Because rookies are jumping in price this means everyone else needs to surpass their starting average just to maintain their price. This scaling factor seems to be around 10% in early rounds.
So in fact, Danger's 3 round average of 115 only equates to a price of around $570000, with a magic number around 4950. So if he does score 115 he will drop around $45,000. Danger actually needs to average 148.7 across 3 rounds just to maintain his starting price. This is why his breakeven is 216 instead of 179 which would give him an average of 136.4 across the first 3 rounds.
As the season progresses, the rookie price increases reduce and therefore the amount he needs to maintain his price will reduce back towards 136.4.
So what does this mean for cash cows?
Tim Kelly - averaging 108.3. Multiply by current number 4950 = 536,085. Difference is about $420,000. One quarter of this is $105,000. His price increase was $114,000 - so this is all rough calculations and we don't know the exact formulas used in the back-end, but you can see it's pretty close.
So back to my original point. Let's say you have a rookie averaging 70. Priced on this average his price is somewhere in the range of $350-385k. Currently his price has increased to $250k. But, his last 2 scores are 70 and a concussion-affected 30. So his breakeven is around 50 based on his current price. However, we expect him to keep scoring 70 so his price will continue to increase another $100k once that 30 cycles out of his 3-round average.
My approach is to look at what they're averaging and work out what their final price will be, in this example $385k. I'd then jump off when they get to around $50k of this price. Once they reach that point their price increases each week will only be around $10k so further gains will be pretty slow.
Hope that all makes some sense. So you also see why Danger was always going to drop in price unless he went nuts and averaged 150 (which was unlikely when returning from a hamstring).
