"Virtually no correlation between payroll and win%" - wrong

[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 $60,612,189
11. Utah Jazz $55,614,192
12. Cleveland Cavaliers $55,457,657
13. Philadelphia 76ers $54,858,763
14. Oklahoma City Thunder $53,605,750
15. 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 $42,066,057
25. Washington Wizards $40,682,282
26. New Jersey Nets $39,814,161
27. Memphis Grizzlies $37,363,810
28. Indiana Pacers $36,957,444
29. Sacramento Kings $29,903,965
30. Denver Nuggets $28,883,142

Read more: http://hoopshype.com/salaries.htm#ixzz1aal7h9fh

[aurareturn1]

Those payroll numbers are wrong though. There is a minimum salary in the NBA and it's definitely higher than $28 million.

[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.

[john2jer]

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.

[Sasaki]

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).

[ace88]

Having money doesn't guarantee winning, but not having money usually guarantees not winning.

[Blame Rasho]

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.

[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.

[Agenda42]

Since the luxury tax was enacted, every champion has been a tax payer.

[EtchenBa]

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

[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.

[StepBack3]

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 $60,612,189
11. Utah Jazz $55,614,192
12. Cleveland Cavaliers $55,457,657
13. Philadelphia 76ers $54,858,763
14. Oklahoma City Thunder $53,605,750
15. 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 $42,066,057
25. Washington Wizards $40,682,282
26. New Jersey Nets $39,814,161
27. Memphis Grizzlies $37,363,810
28. Indiana Pacers $36,957,444
29. Sacramento Kings $29,903,965
30. Denver Nuggets $28,883,142

Read more: http://hoopshype.com/salaries.htm#ixzz1aal7h9fh

[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

[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.

[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%.

[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.

[EvanZ]

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?

[Lakers05]

Where can we find the team salaries for the past 7 years?

[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.

[EvanZ]

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.