NBA Player Salaries and Success
Like other professional sports organizations, the NBA has a salary cap, which will increase to $109 million per team for the 2019-20 season. However, the NBA's salary cap is soft, which means that unlike a hard cap that cannot be exceeded for any reason, there are exceptions in the NBA that allow teams to sign players or make trades that exceed that cap.
No two players make quite the same amount of money, and there can be wide differences in individual salaries across the board. Therefore, when it comes to showing how much wins actually cost per team, those numbers can really start to get wild, and we can see how some teams really overpay their players. We looked at teams and players over the last decade to see how teams' overall salaries correlate to how well they perform, as well as which players are overpaid or underpaid based on their performance.
Actual Cost of Winning
We calculated each NBA team's total player salary over the past 10 seasons and divided it by the number of wins over that same period to learn how much each team spent for each win. The San Antonio Spurs led the league for wins with a 0.701 win percentage over this period and had a league-low $1.42 million player salary per win. Other teams with low spends per win included the Houston Rockets, Utah Jazz, Atlanta Hawks, and the Denver Nuggets.
On the flip side, some teams spent big bucks on their players but didn't exactly have the success the team (and fans) would have liked. The New York Knicks spent the most money per win over this 10-season span, but they didn't break the 0.500 barrier in win percentage. Other teams that overspent included the Minnesota Timberwolves, Brooklyn Nets, Sacramento Kings, and the Philadelphia 76ers.
There was a big media rights deal between the NBA and a couple of sports networks starting with the 2016-17 season that resulted in a lot more money flowing into the NBA (by the millions). This directly benefited the players, as their salaries jumped up quite a bit. There were a few teams that stood out before this deal went through, though, including the Knicks, Nets, Lakers, and the Mavericks. All of these franchises are big-market teams that are in the top eight regarding value, so it's not a surprise that they've always compensated their players well to keep fans invested in the game and arena seats filled.
Paying Well to Win?
Here, we looked at each team's total salaries and wins over the past 10 seasons. You'd hope that by paying highly rated players well, the team would perform well enough to justify their salaries. However, that's not always the case.
The San Antonio Spurs have a pretty high total salary over the past 10 seasons (although not the highest) and have done the best as far as win percentage goes. Over the last decade, they've been to the NBA Finals twice (winning once) and have appeared in the playoffs every season over that time frame – so it looks like the team has made a good investment that has paid off for the franchise and its fan base.
There are other teams, though, that don't fork out big bucks and still manage to perform well during the NBA season. The Houston Rockets are one such team, and although their postseason success hasn't been as stellar as the Spurs, their win percentage has remained high over the last decade.
There are outliers as well, such as the New York Knicks, which has a really high payroll but hasn't had much success over these 10 years. They've only appeared in the playoffs three times and have a pretty low win percentage.
Next, we determined the most overpaid teams over the past 10 seasons by looking at each team's salary divided by their number of wins. Starting with the 2007-08 season, the Miami Heat wins this dubious distinction, with players like Shawn Marion and Dwyane Wade racking up the high end of their squad's salary. The Heat, unfortunately, weren't even in the postseason that year, and they paid nearly $5 million per win that season.
While that may sound like a lot of money to fork out for a win, it doesn't hold a candle to the 2011-12 Charlotte Bobcats (now known as the Hornets) and what they paid that season – $8.27 million per win . One of the reasons they wound up overspending is because the team managed to eke out only seven wins for the entire season , with the highest player salary going to Corey Maggette with $10.26 million.
Another team who had a really high spend per win over one season was the 2015-16 Philadelphia 76ers, which had a total player salary of $6.46 million per win. This is also likely due to an underwhelming season-long effort that only netted the team 10 wins, which drives the price per win up quite a bit. The 2015-16 season was an interesting one for the 76ers, as they doled out their highest payrolls to players who signed previous contracts, but they did not play on their team that season.
Big Bank Accounts
Here, we looked at which players were the most overpaid and underpaid for the 2017-18 NBA season. We calculated this by dividing each player's salary by their win share. Dion Waiters, who plays for the Heat, gets the distinction as the most overpaid player of that season. He played 30 games that year (he missed playing time due to injury) and had a paltry win share of 0.1, which turned his $11 million salary into a $110 million salary per win share. Right behind him, we find Dragan Bender of the Phoenix Suns. His 0.1 win share meant his salary per win was $44.69 million, and he played 82 games.
On the flip side, we have several players whose salary per win share was quite a bit smaller than those rolling in the dough. Tyler Cavanaugh, who played 39 games for the Atlanta Hawks, earned $41,670 per win share (his salary was only $50,000 for that season). While he didn't play in every game that season, another underpaid player was close to it. Nikola Jokic, who is currently in his fourth NBA season with the Denver Nuggets, had a relatively tiny salary per win share in 2017-18 – $137,510 over 75 games. While he was the third most underpaid player last season, he's doing really well in 2018-19 and is currently third in the race to becoming the NBA MVP for 2018-19.
It can be tricky managing a basketball franchise, working around a soft salary cap, and making sure you retain fan favorites while paying everyone else a fair salary. However, paying the big bucks doesn't always guarantee a win (just ask the New York Knicks). It can be challenging to keep fans happy while ensuring your biggest stars get the salaries they deserve, and that's highlighted in our findings here.
Methodology and Limitations
We collected player and team salary data from Hoopshype.com, as well as player and team statistics, such as win shares and the number of wins, from basketball-reference.com. Data were collected from the 2007-08 season through and including the 2017-18 season. Players who played less than 27 games (a third of the season) were excluded from the study. Players in 2017-18 who had a win percentage of 0.0, such as Caleb Swanigan, Emmanuel Mudiay, Jason Smith, and Malik Monk were excluded from analyzations on overpaid and underpaid players, as dividing player salary by zero would create large values that would exaggerate findings.
Players with negative win shares were also excluded from analyzations on overpaid players, as the interpretation of their salaries per win share would not be directly comparable to players with positive win shares. As noted in the graphic, the highest-paid players for the most overpaid teams by season may not have been on that player's roster during the specific season. Players may have signed contracts that dictated they would get paid over a certain number of seasons, even if they were not actively playing on the team each season.
Player salaries were not available for all NBA players over the past 10 seasons, so players with nonexistent data were excluded. All data are based on means alone, and no statistical testing was performed. This content is exploratory, and future research should approach this topic in a more rigorous and academic manner.
Fair Use Statement
You're (probably) not working on a budget of an NBA franchise roster right now, but it's always entertaining to dream about what star players you could – and could not – afford for your favorite team. If you want to share our findings with your readers for noncommercial purposes, though, we do have good news. You can! However, there is one thing you must do, and that's link back to this page so that our contributors get the credit they deserve.