Similar to other major sports leagues, the NBA salary ceiling for the 2019-20 season will raise to $109 million per club. However, the salary cap in the NBA is soft, which means that, unlike a hard cap that cannot be surpassed for any reason, there are exceptions that allow clubs to sign players or make transactions that exceed the cap.
No two players get the exact same amount of money, and individual pay can vary widely across the board. Therefore, when it comes to demonstrating how much wins genuinely cost each club, the statistics can become rather erratic, and we can see that certain teams pay their players excessively. We examined teams and players over the past decade to determine the correlation between team pay and performance, as well as whether players are overpaid or undervalued based on their output.
Actual Price of Victory
We divided each NBA club’s total player pay over the last 10 seasons by the number of victories over the same time frame to determine how much each team spent per victory. The San Antonio Spurs lead the league in victories with a 0.701% win percentage and the lowest player pay per win at $1.42 million. The Houston Rockets, Utah Jazz, Atlanta Hawks, and Denver Nuggets were the other clubs with low per-victory expenditures.
On the other hand, some clubs spent a lot of money on their players but did not achieve the success the team and its supporters desired. The New York Knicks spent the most money per victory over the past decade, yet their win % did not surpass.500. The Minnesota Timberwolves, Brooklyn Nets, Sacramento Kings, and Philadelphia 76ers were also overspending teams.
Beginning with the 2016–17 season, a major media rights deal between the NBA and a few sports networks resulted in the NBA receiving a substantial increase in revenue (by the millions). This directly helped the players, whose incomes increased significantly. Several clubs stood out prior to the completion of this trade, including the Knicks, Nets, Lakers, and Mavericks. All of these clubs are in the top eight in terms of market size, so it’s not surprising that they’ve always rewarded their players handsomely to maintain fan interest and arena attendance.
Spending Richly to Win?
We examined the total wages and victories of each team over the last decade. You would expect that by paying highly ranked players handsomely, their performance would be sufficient to justify their compensation. Nevertheless, this is not always the case.
The San Antonio Spurs have the greatest victory % over the last decade and have a somewhat high total payroll over the past decade (albeit not the highest). Over the past decade, they’ve been to the NBA Finals twice (winning once) and have made the playoffs every year; therefore, it appears that the team’s investment has been profitable for the club and its fans.
There are, however, teams who do not spend a lot of money yet nevertheless play well throughout the NBA season. The Houston Rockets are one such club, and although their postseason performance hasn’t been as outstanding as the Spurs, their victory % has been strong over the previous decade.
There are also outliers, such as the New York Knicks, who have a very high salary yet have not seen much success over the past decade. They have made the playoffs only three times and have a rather poor victory percentage.
Next, we calculated the most overpriced teams over the previous 10 seasons by looking at each team’s salary divided by their number of victories. Beginning with the 2007-08 season, this dubious honor goes to the Miami Heat, whose players Shawn Marion and Dwyane Wade earn the highest salaries on their team. Unfortunately, the Heat did not even make the playoffs that season, although they spent over $5 million each victory.
In 2011-12, the Charlotte Bobcats (now known as the Hornets) spent $8.27 million per victory. This is a staggering amount. One of the reasons they ended up overpaying is because the club won only seven games throughout the whole season, with Corey Maggette receiving the highest player compensation of $10.26 million.
The 2015-16 Philadelphia 76ers had a total player payroll of $6.46 million per victory, making them another club with a very high per-victory expenditure. This is likely owing to the team’s lackluster season, which resulted in only 10 victories, which drives up the price per victory significantly. The 76ers had an intriguing 2015-16 season, since they paid their biggest salaries to players who had signed previous contracts but did not play for them that season.
For the 2017-18 NBA season, we examined which players were the most overpaid and undervalued. We estimated this by dividing each player’s compensation by their victory share. That season’s most overpaid player was Dion Waiters, who plays for the Heat. He played 30 games that season (he missed playing time due to injury) and had a pathetic win share of 0.1, resulting in a pay per win share of $110 million. Right behind him is the Phoenix Suns’ Dragan Bender. His 0.1 share of victories resulted in a pay per victory of $44.69 million, and he appeared in 82 games.
On the opposite end of the spectrum, we had a number of players whose wage per victory share was far lower than those who were rolling in the wealth. Tyler Cavanaugh, who played 39 games with the Atlanta Hawks, got $41,670 per victory share (his pay was just $50,000 for that season). He did not play in every game that season, but another unpaid player came close. In 2017-18, Nikola Jokic, who is in his fourth NBA season with the Denver Nuggets, received a very modest pay per win share of $137,510 across 75 games. While he was the third most underpaid player in 2017-18, he is presently third in the race for NBA MVP in 2018-19 and is performing exceptionally well.
It may be difficult to manage a basketball team while adhering to a flexible salary cap and retaining fan favorites while giving everyone a fair wage. However, spending a lot of money does not automatically ensure success (just ask the New York Knicks). Our statistics demonstrate how difficult it may be to maintain fan satisfaction while still ensuring that your top players are compensated appropriately.
Methods and Restrictions
We obtained player and team salary data from Hoopshype.com and player and team statistics from basketball-reference.com, including win shares and total victories. Between the 2007-08 and 2017-18 seasons, data were gathered. Les joueurs who participated in fewer than 27 games (one-third of the season) were omitted from the research. Players with a win percentage of 0.0 in 2017-18, such as Caleb Swanigan, Emmanuel Mudiay, Jason Smith, and Malik Monk, were removed from analyses on overpaid and undervalued players, since dividing player salaries by zero would provide inflated results.
Athletes with negative win shares were also removed from analyses on overpriced players, since their salary per win share could not be interpreted in the same manner as those of players with positive win shares. As seen in the graph, the highest-paid players for the most overpriced clubs by season may not have been on the squad during that season. Even if they were not actively playing for the club during a given season, players may have signed contracts stipulating that they would be compensated for a set number of seasons.
The salary of all NBA players during the last ten seasons were not accessible, hence nonexistent data was omitted. All statistics are based only on means, and no statistical analysis was conducted. This information is exploratory, and future study should take a more rigorous and scholarly approach to this issue.
Fair Use Declaration
It’s always amusing to fantasize about which great players you could – and could not – buy for your beloved team, even when you’re (probably) not currently managing the budget of an NBA organization. The good news is that you may share our results with your audience for nonprofit reasons. You can! However, there is one requirement: you must link back to this website so that our contributors receive proper recognition.