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"Virtually no correlation between payroll and win%" - wrong
Posted: Wed Oct 12, 2011 6:21 pm
by Bubstubbler
As the NBA league office continues the lockout in an apparent bid to create more parity among teams, a professor of economics at Smith College who has studied the issue says there is almost no relationship between the size of a team's payroll and its success.
“
The statistical correlation between payroll and win percentage is practically nonexistent,” said Andrew Zimbalist.
Read more:
http://basketball.realgm.com/wiretap/21 ... z1aakZdNpk
That's laughably false. Here's a ranking of payrolls from last season with playoff teams in red. Notice a correlation? 12 out of the 15 teams in the top half in payroll rankings made the playoffs; only 4 out of the 15 teams in the bottom half did. Furthermore, none of the 4 teams from the bottom half were serious contenders (seeded 7/8/8/5 respectively), whereas arguably the top 6 contenders were all in the top 9 in payroll.
Team Payrolls
1. Los Angeles Lakers $91,311,749
2. Orlando Magic $74,816,623
3. San Antonio Spurs $73,181,595
4. Boston Celtics $72,473,961
5. Portland Trail Blazers $66,343,649
6. Atlanta Hawks $65,846,237
7. Miami Heat $65,313,758
8. Dallas Mavericks $63,184,541
9. Chicago Bulls $61,674,069
10. New York Knicks $60,612,18911. Utah Jazz $55,614,192
12. Cleveland Cavaliers $55,457,657
13. Philadelphia 76ers $54,858,763
14. Oklahoma City Thunder $53,605,75015. Milwaukee Bucks $51,849,140
16. Phoenix Suns $49,182,654
17. Golden State Warriors $49,105,952
18. Minnesota Timberwolves $48,355,542
19. Detroit Pistons $48,263,032
20. Charlotte Bobcats $47,481,490
21. Houston Rockets $47,306,218
22. Toronto Raptors $46,879,433
23. Los Angeles Clippers $44,919,031
24. New Orleans Hornets $42,066,05725. Washington Wizards $40,682,282
26. New Jersey Nets $39,814,161
27. Memphis Grizzlies $37,363,810
28. Indiana Pacers $36,957,44429. Sacramento Kings $29,903,965
30. Denver Nuggets $28,883,142Read more:
http://hoopshype.com/salaries.htm#ixzz1aal7h9fh
Re: "Virtually no correlation between payroll and win%" - wr
Posted: Wed Oct 12, 2011 6:29 pm
by aurareturn1
Those payroll numbers are wrong though. There is a minimum salary in the NBA and it's definitely higher than $28 million.
Re: "Virtually no correlation between payroll and win%" - wr
Posted: Wed Oct 12, 2011 6:30 pm
by Blame Rasho
You realize it is over years... and not just one year....
The Spurs were always among the lowest payroll teams in the 2000s and were an elite team, so before you think you are smarter than a guy with a PHD that surely put more time into his thoughts instead of going to hoophype and comparing it to just this past years playoff team and going ahh ha....And you also fail to realize some teams are also missing half their player salaries with unknown salaries and free agents.
Re: "Virtually no correlation between payroll and win%" - wr
Posted: Wed Oct 12, 2011 6:32 pm
by john2jer
aurareturn1 wrote:Those payroll numbers are wrong though. There is a minimum salary in the NBA and it's definitely higher than $28 million.
Looks like the 2011-12 salary figures. Half of Denver's team up and vanished to China.
Re: "Virtually no correlation between payroll and win%" - wr
Posted: Wed Oct 12, 2011 6:32 pm
by Sasaki
aurareturn1 wrote:Those payroll numbers are wrong though. There is a minimum salary in the NBA and it's definitely higher than $28 million.
Yeah. Off the top of head, I know the Rockets had one of the higher payrolls in the 10-11 season, and didn't make the playoffs ( Hi Yao).
Re: "Virtually no correlation between payroll and win%" - wr
Posted: Wed Oct 12, 2011 6:34 pm
by ace88
Having money doesn't guarantee winning, but not having money usually guarantees not winning.
Re: "Virtually no correlation between payroll and win%" - wr
Posted: Wed Oct 12, 2011 6:35 pm
by Blame Rasho
john2jer wrote:aurareturn1 wrote:Those payroll numbers are wrong though. There is a minimum salary in the NBA and it's definitely higher than $28 million.
Looks like the 2011-12 salary figures. Half of Denver's team up and vanished to China.
Look at New Orleans...6 players.
Re: "Virtually no correlation between payroll and win%" - wr
Posted: Wed Oct 12, 2011 6:37 pm
by EtchenBa
I haven't read the study, but I'm assuming there are many other variables that he controlled for. It's very possible that win% could increase as payroll does, but it doesn't mean one causes the other. They might both increase as a result of some other variable.
He's a professor of economics...he has a Ph.D. He didn't just line up teams in order of payroll and see if win% was similarly ordered.
Re: "Virtually no correlation between payroll and win%" - wr
Posted: Wed Oct 12, 2011 6:40 pm
by Agenda42
Since the luxury tax was enacted, every champion has been a tax payer.
Re: "Virtually no correlation between payroll and win%" - wr
Posted: Wed Oct 12, 2011 6:44 pm
by EtchenBa
Blame Rasho wrote:You realize it is over years... and not just one year....
The Spurs were always among the lowest payroll teams in the 2000s and were an elite team, so before you think you are smarter than a guy with a PHD that surely put more time into his thoughts instead of going to hoophype and comparing it to just this past years playoff team and going ahh ha....And you also fail to realize some teams are also missing half their player salaries with unknown salaries and free agents.
Almost certainly:
http://sophia.smith.edu/~azimbali/biography1.html
Re: "Virtually no correlation between payroll and win%" - wr
Posted: Wed Oct 12, 2011 6:47 pm
by Apathy
You might want to read this article:
http://wagesofwins.net/2011/08/10/nba-o ... e-balance/One can also look at payroll and wins across this same time period. We do find a statistically significant link between team spending and wins. But team payroll only explains 6% of the variation in team wins. In other words, teams are not able to effectively buy wins in the NBA.
NBA fans don’t seem to care much about competitive balance. To illustrate, the NBA was much more balanced in the late 1970s, but it was not very popular. As noted, since Stern took over the NBA has not been balanced at all. And yet per game attendance has risen from about 11,000 in 1983-84 to more than 17,000 this past season. Furthermore, the league’s television contract has risen from less than $40 million per year (for the entire league) in 1984 to more than $900 million per year today.
Re: "Virtually no correlation between payroll and win%" - wr
Posted: Wed Oct 12, 2011 6:51 pm
by StepBack3
Bubstubbler wrote:As the NBA league office continues the lockout in an apparent bid to create more parity among teams, a professor of economics at Smith College who has studied the issue says there is almost no relationship between the size of a team's payroll and its success.
“
The statistical correlation between payroll and win percentage is practically nonexistent,” said Andrew Zimbalist.
Read more:
http://basketball.realgm.com/wiretap/21 ... z1aakZdNpk
That's laughably false. Here's a ranking of payrolls from last season with playoff teams in red. Notice a correlation? 12 out of the 15 teams in the top half in payroll rankings made the playoffs; only 4 out of the 15 teams in the bottom half did. Furthermore, none of the 4 teams from the bottom half were serious contenders (seeded 7/8/8/5 respectively), whereas arguably the top 6 contenders were all in the top 9 in payroll.
Team Payrolls
1. Los Angeles Lakers $91,311,749
2. Orlando Magic $74,816,623
3. San Antonio Spurs $73,181,595
4. Boston Celtics $72,473,961
5. Portland Trail Blazers $66,343,649
6. Atlanta Hawks $65,846,237
7. Miami Heat $65,313,758
8. Dallas Mavericks $63,184,541
9. Chicago Bulls $61,674,069
10. New York Knicks $60,612,18911. Utah Jazz $55,614,192
12. Cleveland Cavaliers $55,457,657
13. Philadelphia 76ers $54,858,763
14. Oklahoma City Thunder $53,605,75015. Milwaukee Bucks $51,849,140
16. Phoenix Suns $49,182,654
17. Golden State Warriors $49,105,952
18. Minnesota Timberwolves $48,355,542
19. Detroit Pistons $48,263,032
20. Charlotte Bobcats $47,481,490
21. Houston Rockets $47,306,218
22. Toronto Raptors $46,879,433
23. Los Angeles Clippers $44,919,031
24. New Orleans Hornets $42,066,05725. Washington Wizards $40,682,282
26. New Jersey Nets $39,814,161
27. Memphis Grizzlies $37,363,810
28. Indiana Pacers $36,957,44429. Sacramento Kings $29,903,965
30. Denver Nuggets $28,883,142Read more:
http://hoopshype.com/salaries.htm#ixzz1aal7h9fh
Re: "Virtually no correlation between payroll and win%" - wr
Posted: Wed Oct 12, 2011 7:13 pm
by EvanZ
Almost a 30% explanation of PyWins by salary is "practically nonexistent" according to this fella.
Code: Select all
> summary(salary.lm)
Call:
lm(formula = PYWINS ~ Salary, data = salary_wins)
Residuals:
Min 1Q Median 3Q Max
-24.186 -7.223 -1.698 6.755 25.239
Coefficients:
Estimate Std. Error t value Pr(>|t|)
(Intercept) 14.1752 7.9204 1.790 0.08432 .
Salary 0.5047 0.1433 3.523 0.00149 **
---
Signif. codes: 0 ‘***’ 0.001 ‘**’ 0.01 ‘*’ 0.05 ‘.’ 0.1 ‘ ’ 1
Residual standard error: 10.8 on 28 degrees of freedom
Multiple R-squared: 0.3071, Adjusted R-squared: 0.2824
F-statistic: 12.41 on 1 and 28 DF, p-value: 0.001485
Re: "Virtually no correlation between payroll and win%" - wr
Posted: Wed Oct 12, 2011 7:45 pm
by patagonia
I've always felt that getting lucky in the draft was a better indicator of success. If we were to go back and look at the championship teams for the last 30 years, in how many of them would the best player on that team not have been drafted by that team? (Let's count Kobe since he was a draft-day acquisition). Maybe 5 times? And 3 of those are Shaq.
Re: "Virtually no correlation between payroll and win%" - wr
Posted: Wed Oct 12, 2011 7:49 pm
by Firesphere
Regardless of the correlation between payroll and win %, I really think the most under rated factor in the entire league is the coach.... it is clear that there is a massive gap between great coaches and awful coaches in this league.... a great coach makes or breaks the team... I would really like to see a study on coaching and see what an impact specific coaches have had on winning teams. I think that this study about no correlation between payroll and win % is obviously thought out and studied by someone with far more time on their hands than I have... However... I think a fine balance probably supports the fact that a team "willing" to go higher when it counts has a higher win%.
Re: "Virtually no correlation between payroll and win%" - wr
Posted: Wed Oct 12, 2011 7:51 pm
by Vides990
LOL at telling the professional statistician that theyre wrong. NBA player sided fans have been saying this for months. Small market fans constantly turning a blind eye to facts.
Re: "Virtually no correlation between payroll and win%" - wr
Posted: Wed Oct 12, 2011 8:26 pm
by EvanZ
Vides990 wrote:LOL at telling the professional statistician that theyre wrong. NBA player sided fans have been saying this for months. Small market fans constantly turning a blind eye to facts.
He's not a professional statistician. He's an economics professor. I'm an engineering professor. Does he have more right to use statistics than I do?
Re: "Virtually no correlation between payroll and win%" - wr
Posted: Wed Oct 12, 2011 8:48 pm
by Lakers05
Where can we find the team salaries for the past 7 years?
Re: "Virtually no correlation between payroll and win%" - wr
Posted: Wed Oct 12, 2011 8:51 pm
by nugzin2040
Those payroll numbers are wrong though. There is a minimum salary in the NBA and it's definitely higher than $28 million.
Yeah, the Nuggets payroll was double that after the Melo trade. Even more, before it.
Re: "Virtually no correlation between payroll and win%" - wr
Posted: Wed Oct 12, 2011 9:00 pm
by EvanZ
nugzin2040 wrote:Those payroll numbers are wrong though. There is a minimum salary in the NBA and it's definitely higher than $28 million.
Yeah, the Nuggets payroll was double that after the Melo trade. Even more, before it.
Correcting this makes the correlation larger. You realize that, I hope.