NBA Salary Analysis

With the NBA contract rules and the trickiness of the salary cap, NBA teams are looking for value wherever they can find it. Many teams are able to find hidden value and get players on huge bargains. Other players are simply worth more than NBA contract rules will allow them to earn (both players on rookie deals and max deals). This post looks at what players are undervalued or overvalued and attempts to find trends for these players. 

Methodology:

To evaluate a player’s worth, I used Win Shares (WS) and Wins Above Replacement (WAR) as units of production. After gathering contract data from https://www.spotrac.com/nba/cap/(only contracts that counted towards a team’s salary cap were used) and production data from Basketball Reference. At first, I totaled up each team’s salary and units of production and found how much the average WS and WAR (WAR was calculated by multiplying value over replacement (VOR) by 2.7-per Basketball Reference instructions) would be worth for each team. Then, I multiplied that value by each player’s WS and WAR and averaged the two for their expected value. Finally, I subtracted their expected value from their actual contract to get the over/under value. This method calculates how much of a particular team’s total salary a player is worth. For instance, John Collins had roughly a fourth of the Hawks WS and roughly half of their WAR and his estimated value was about $35 million (about a third of the Hawks cap). While this number can be an interesting insight into a player’s value compared to the rest of his team, it leads to extreme numbers that fluctuate from team to team.

To account for this, I then calculated the total salary of the NBA along with the total WS and WAR to find how much an average WS and WAR were worth leaguewide. I then applied the rest of the original method to find how much a player would be worth using leaguewide values for production, getting much more accurate estimates. 

Results: (Total Results in Excel Sheet at end of post)

Average Team Salary- $ 119,509,685.80 

League Expected $/WS-$ 3,078,850.46 

League Expected $/WAR- $ 4,472,829.70 

TeamMost Under Valued (by million $)Most Over Valued (by million $)Other Notables by million $ ( – indicates overvalue) 
Atlanta HawksJohn Collins (16.6)Kent Bazemore (-17.6)Miles Plumlee (-11.1)
Boston CelticsKyrie Irving (14.3)Gordon Hayward (-12.7) Daniel Theiss (11.8)
Jayson Tatum (12.2)Marcus Morris (11.6)
Brooklyn NetsJarret Allen (24.3)Allen Crabbe (-17.9)D’Angelo Russell (20.6)
Charlotte HornetsKemba Walker (22.9)Bismack Biyombo (-12.7)Nicolas Batum (-8.0)Tony Parker (-8.4)
Chicago BullsRyan Arcidiacono (7.4)Otto Porter Jr. (-21.9)Zach Lavine (-8.5)
Cleveland CavaliersLarry Nance Jr. (21.6)Kevin Love (-22.1)Tristan Thompson (-9.2)
JR Smith (-16.2)
Dallas MavericksLuka Doncic (22.7)Tim Hardaway Jr. (-19.8)Dwight Powell (17.0)
Denver NuggetsNikola Jokic (38.2)Gary Harris (-11.9)Monte Morris (14.8)
Jamal Murray (12.2)
Detroit PistonsAndre Drummond (9.8)Jon Leur (-9.2)Blake Griffin (6.8)
Golden State WarriorsKevin Looney (20.4)Klay Thompson (-6.0)Kevin Durant (13.7)
Stephen Curry (7.0)
Houston RocketsJames Harden (52.8)Eric Gordon (-12.5)Clint Capela (18.2)
PJ Tucker (13.6)
Chris Paul (-11.0)
Indiana PacersDomantas Sabonis (24.7)Tyreke Evans (-15.6)Victor Oladipo (-9.6)
Thaddeus Young (15.6
Myles Turner (23.2)
Los Angeles ClippersMontrez Harrell (27.9)Wilson Chandler (-14.0)Danilo Gallinari (6.7)Patrick Beverly (16.8)
Los Angeles LakersJavale McGee (17.8)Rajon Rondo (-6.4)Lebron James (5.0)
Memphis GrizzliesJoakim Noah (5.9)Chandler Parsons (-25.9)Mike Conley (1.1)
Miami HeatBam Adebayo (22.0)Ryan Anderson (-20.4)Hassan Whiteside (-8.5)
Josh Richardson (9.5)
Milwaukee BucksGiannis Antetokounmpo (43.9)George Hill (-13.0)Eric Bledsoe (16.9)
Brook Lopez (23.8)
Minnesota TimberwolvesKarl-Anthony Towns (45.6)Andrew Wiggins (-28.2)Jeff Teague (-16.2)
Derrick Rose (6.1)
New Orleans PelicansAnthony Davis (18.8)Solomon Hill (-12.0)Julius Randle (12.2)
New York KnicksMitchell Robinson (24.2)Kevin Knox (-19.0)DeAndre Jordan (-15.7)
OKC ThunderPaul George (19.8)Dennis Schroeder (-14.7)Russell Westbrook (8.6)
Steven Adams (9.2)
Orlando MagicNikola Vucevic (34.3)Evan Fournier (-10.3)DJ Augustin (9.4)
Philadelphia 76ersBen Simmons (30.9)Jonathon Simmons (-5.2)Joel Embiid (7.8)
Phoenix SunsDevin Booker (11.7)Tyler Johnson (-18.4)DeAndre Ayton (8.0)TJ Warren (-7.9)
Portland TrailblazersDamian Lillard (23.2)Evan Turner (-14.2)CJ McCollum (-9.3)
Jusuf Nurkic (20.8)
Sacramento KingsWillie Cauley-Stein (19.5)Harrison Barnes (-21.0)De’Aaron Fox (15.2)
Buddy Heild (17.9)
San Antonio SpursJakob Poeltl (17.0)DeMar DeRozan (-6.0)LaMarcus Aldridge (7.1)
Davis Bertans (7.0)
Toronto RaptorsPascal Siakim (33.9)Serge Ibaka (-4.4)Kawhi Leonard (13.2)Danny Green (15.4)
Utah JazzRudy Gobert (34.2)Dante Exum (-9.9)Derrick Favors (12.2)Donovan Mitchell (14.9)
Washington WizardsThomas Bryant (15.1)Ian Mahimmi (-13.8)Bradley Beal (8.6)

Discussion:

To begin, it must be acknowledged that WS and WAR are imperfect units of production. Klay Thompson only comes in at 5.3 WS and 2.16 WAR, but anybody in the industry would tell you that Thompson is worth more than the $13 million this analysis suggests he’s worth. (Side note-While Thompson is undoubtedly worth more than $13 million, is he really worth a max contract? Some team, if not multiple, will undoubtedly offer him a max, but I’m skeptical if he’s really worth it. Even as one of the best shooters of all time and a great defender, Thompson’s inability to consistently create for himself or others should cause teams to give pause. If Kevin Durant walks, I expect the Warriors to offer Thompson a max mainly because they don’t have any other options, but Durant resigning, unlikely but possible, would greatly complicate the situation).  Either way, while WS and WAR are far from perfect units of production, they do incorporate how many games you actually played as well as do a decent job of incorporating the defensive aspect of the game. 

A couple of trends can be seen in how teams overvalue and undervalue players. Unsurprisingly, many of the undervalued players are starter-level players still on their rookie contract. This makes sense as these players are producing at a high level but typically not making more than a few million. NBA contract rules restrict these players from getting paid more, which leaves players wanting even more money once they do hit their second contract. The second group of teams undervalued are superstar players (think top 10 players). This is also unsurprising given that super-max contracts top out at 35% of the salary cap while these superstar players are likely worth even more than that to their teams. What is surprising is the last group of players who are typically undervalued-veteran centers. With the recent three-point evolution in the NBA, many teams have scrapped the traditional old school center. While I’m skeptical of building any team around a center (besides a nontraditional center such as Giannis, Embiid, or Jokic), teams seem to be undervaluing centers. Players like Javale McGee, Joakim Noah, and even higher paid centers like Nurkic, Capela, Gobert, Vucevic, and Drummond are being undervalued. Enes Kanter’s dominance in the Thunder-Blazers series alone suggests that teams are undervaluing these players. The Pistons built a playoff team around two low post players (Griffin and Drummond). Despite having a formidable center in Serge Ibaka, the Raptors felt it necessary to go out and acquire Marc Gasol at the trade deadline. Perhaps WAR and WS overestimate the value of the center but on the other hand, perhaps teams are undervaluing them. It’ll be interesting to see what kind of contracts young centers like Jarret Allen and Bam Adebayo get when they are eligible for their second contract. 

Many teams also overvalue players. A lot of these overvalued players are holdovers from the huge contracts given out during the cap spike of 2016, but there are other areas of overvalue as well. As the three-point revolution has overtaken the NBA, teams are becoming increasingly more willing to dish out hefty contracts to shooters (why Klay Thompson will get a max offer). Many of the overvalued players are wing players and while they certainly contribute to their team greatly, this analysis suggest that they are greatly overpaid. As good of shooters as players like Gary Harris and Eric Gordon are, are they really worth their contracts? And do you really want to build a team around that style of play? As we saw last year in the Western Conference Finals when the Rockets couldn’t hit the broad side of a barn, three-point shooting can come and go in an instant and dishing out large amounts of money to build your team around that can be incredibly dangerous. 

Conclusion:

As I’ve mentioned multiple times, this analysis is far from perfect. WAR and WS seem to favor players who fill up all categories of the stat sheet and doesn’t seem to think too much of three-point specialists. Myles Turner’s contract extension at 4 years/$80 million seems about right (his expected value is $26.6 million) so this analysis likely has at least a slight bias towards centers. A similar case could be made that this analysis has a bias against wing players, specifically three-point specialists, but I’m not sure how much I buy that as true three-point specialists (players like JJ Redick and Danny Green), seem to be worth their contracts. Redick has a $12.25 million contract with an expected value of $13.9 million while Green is making $10 million this season, but has an expected value of $25.4 million. The truly elite 3-point specialists seem to actually be undervalued, but the average one seems to be overvalued.  This is like a result of the three-point revolution and the fact that teams are desperately trying to find shooting wherever they can and are overpaying for it when they can’t get the truly elite players. In the end, most teams are willing to overpay for players because of the fear that they might lose those same players to their rivals (again Klay Thompson). While that seems to work for teams who have already built a contender, I would caution teams who are fighting for playoff spots against this course of action as this can lead to teams being stuck with ineffective players on large contracts. 

End note: A few players (Kevin Knox, Andrew Wiggins, etc.) had a negative value, indicating their contributions negatively impacted their team’s chance of winning games. While Kevin Knox only had a $3.7 million contract, he was worth about -$15.3 million, leaving him with an overpaid value of $19 million. Also, my analysis only accounted for production for that particular team. For instance, Tobias Harris only had 2.1 WS and .81 WAR while he was with the 76ers, but all of his $14.8 million contract counts towards their cap. This led to him (and other players traded midseason) being perceived as overvalued, when he was in fact, using his combined Clipper and 76ers WS and WAR, he would be worth about $21.8 million. For this reason, players like Harris and Marc Gasol were not included in the summary above, but can be found in the full analysis below. 

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