Monday, January 18, 2021

Futures Value Analysis

Prior to the start of the shortened 2020 MLB season, there were several enticing futures available.  With fewer games to be played (60) it allows for a team that might not be true contenders for 162 games to make the playoffs.  One futures option was the Tampa Bay Rays at +2000.  With their starting rotation of pitchers and enough hitters in the line up, they had the potential to compete with anyone.


Over the course of the regular season, the Rays went 40-20.  This led them into the playoffs, but now they were going to face other playoff teams consistently.  While they made it to the World Series, losing in 6 games to the LA Dodgers, there was a lot of value on a +2000 ticket all along the way.


When analyzing futures value, we need to look at the path to the ticket cashing.  It was reasonable to assume that, barring injuries, the Rays would make the playoffs.  However, the first round of the playoffs was only 3 games.  The next round was only 5 games.  The point is, in a shortened series, it provides more opportunities for a lesser quality team to win.  Starting pitching, as we’ve discussed, is crucial to MLB postseason success.  If your team doesn’t have their best pitchers available for these shortened series games, it provides more reliance on the hitters. 


The reason we mention this is because ultimately it comes down to value, and even being able to sell your ticket when timing allows.  Taking a favorite such as the Yankees or Dodgers at +275 doesn’t make a lot of sense or have real value when the structure of the postseason schedule allows for greater variance.  Finding a team with higher odds, such as +2000, allows for locking in a profit when there is greater variance to a series.


Think about this the next time you are looking at futures.  When you consider a schedule, injuries, etc, +250 - +1000 doesn’t make a lot of sense.  This applies to all sports, especially when there are more variances that are out of control.  In short, get paid for the risk you take with these futures tickets and have a way to sell when the timing is right.


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