Balancing a salary cap has become the great dilemma of American sports. Star contracts continue to inflate to higher and higher numbers as professional sports leagues bring in larger TV deals, bringing with it questions of who to pay. In the NFL, star QBs make around 20% of the cap space available for 52 players. In the NBA, max contracts limit players to make “only” 25-35% of the cap, depending on age and awards-won. Inevitably, teams are faced with the tough decisions of determining how much extending their home-grown talent is worth and how much money they should spend to lure players in free agency. Those decisions are complicated by team chemistry, player availability, and the complex calculus of team-building vs. star-hoarding. Every year, NBA teams find themselves unable to live up to the expectations put on their shoulders by paying three star players.
General Managers (GMs) must create and execute a team-building philosophy that is unique to their team’s constraints. Is it wise to pay three stars big money and surround them with low-salary deals? Can you win paying top-of-the-market money to multiple guards? Should teams pay for a player whose stat-line resembles a year Britney Spears topped the charts (20-0-3)? These questions have informed GM decision-making for years, and have only become more relevant in the modern age of sports.
This analysis looks into how GMs have approached the challenge of valuing skills over the last 20 years, with deeper dives into team-specific and position-specific skill valuation.
The Data:
This analysis uses NBA players’ per-game box score numbers and their annual salaries from 2006 to 2020. Fluctuations in salary over the past 15 years have been accounted for by using normalized numbers (% of salary cap) rather than true dollars, which would show everything increase in value over 15 years due to the higher salary caps in 2020 vs. 2006.
The Analysis:
The graphs throughout this series of articles show the resulting regression coefficients for each skill in predicting a player’s salary. For example, a player averaging 20 points, 10 assists, and 4 rebounds per game would be expected to earn a salary of 20*[the points coefficient in that year] + 10*[the assists coefficient in that year + 4*[the rebounds coefficient in that year].
While rookie and maximum salary restrictions cause outliers with players earning less than they would on the open-market (yes, I would argue many max-contract players are underpaid), the overall results do provide an interesting peek into how skills are valued. This analysis allows us to quantify how much averaging one more point might increase a player’s value.
Which teams spend money?
Over the past 15 years, the Heat (MIA), Cavs (CLE), and Mavericks (DAL) had their investments pay off in championship wins, with much of their spend going toward superstars.
The Heat’s Big Three during the 2010-11 through 2013-14 seasons made four consecutive NBA Finals appearances, winning two of them. Around the same time, the Brooklyn Nets’ (BKN) attempts to compete with their own expensive Big Three failed to produce more than a 6-seed in the playoffs.
Cleveland’s spend is particularly notable in showing the LeBron-effect — while LeBron vacationed in Miami from 2011-2013, the Cavs had their leanest years, ranking in the bottom third of the league. The years since LeBron’s return routinely boasted league-high payrolls, with four consecutive finals appearances and one championship to show for it.
On the other side of the spend-spectrum, “The Process” 76ers routinely underspent the rest the league, winning a pair of first-overall draft picks and four consecutive top-three picks. “The Process” truly made Philadelphia the LeBron James of Losing. The emergence of Joel Embiid figures to help turn that investment into a good one.
Other smaller-market teams have sacrificed spend (at the cost of winning), with the Atlanta Hawks, Indiana Pacers, Charlotte Hornets, and Utah Jazz all entering rebuilds of their own over the past decade and a half. The Atlanta Hawks of 2014-15 won 60 games before team leadership opted against resigning their core five players the following year (a team who collectively won a Player of the Month award that year for their outstanding team play). Unfortunately for me, this was the season that would hook me on Atlanta Basketball for the rest of my life. By the 2018 and 2019 seasons, Atlanta was among the worst teams in the league and spent like it.
Which skills have become more popular across the league?
Please note the graphs above use the following acronyms:
- apg: Assists Per Game
- bpg: Blocks Per Game
- ft_pg: Free Throw Makes Per Game
- ppg: Points Per Game
- rpg: Rebounds Per Game
- spg: Steals Per Game
- three_pts_pg: Three Point Makes Per Game
- tpg: Turnovers Per Game
Skills can be placed into three buckets by how their value has fluctuated over the past 15 years: consistent, erratic, or rising value. As a reminder, the graphs above show the value of one point, assist, turnover, etc. per game. Since points are far more plentiful than blocks, it would be expected that ppg has a lower value than bpg on these graphs.
Consistently valued skills:
Teams consistently value points, assists, and rebounds — the three core stats any box-score watcher cares about. The value of all three have remained fairly consistent even as the landscape of the NBA changes, a sign that these are the stats agents point to when looking for a new contract.
Erratically valued skills:
More erratic are blocks, free throws, and turnovers. Teams spent a lot on shot-blockers in the 2000s and early 2010s, but less in recent years. Turnovers consistently have, predictably, been a negative predictor of salary. Free throws see the most erratic value, bouncing around the net-zero line from year to year. Recent years show free throws are turning into a but of a hot commodity after being an after-thought in the early 2010s.
Increasingly valued skills:
The modern NBA appears to be embracing the value of threes and steals. To the chagrin of midrange purists, the recent analytics movement has brought a surge in the value of three-point shooters. This effect is so large that made three-pointers were valued more than any other skill in the 2019 season.
Steals have gradually become a way for players to increase their salary after being a negative for many years. This is likely due to its correlation to defensive fouls — players who attempt more risky steals might have more steals, but also get called for more fouls. This uptick in value may be a sign foul calls have changed in recent years, causing the positive value of steals to outweigh the negative value of how many fouls those steal attempts generated. Interestingly, ball-handlers are more protected than ever by recent rule changes, meaning the increased value of a steal might actually be due to only truly skilled thieves attempting steals. A deeper dive into what causes fouls can be found here, and the team-specific and position-specific analyses of this project have their own pages within this site.