• Kenny Tran

Who were the Most and Least Efficient Spenders of the last NBA Decade

Can teams expect to gain more wins by spending more money? In this article, we analyze spending behavior and look at some of the most efficient spenders of the past decade.

It's hard to compete for an NBA title when your owner is stingy, just ask any Phoenix Suns fan. They'll recount the horror stories of Robert Sarver trading away draft picks for cash considerations and undervaluing his players. The three man core of Nash-Stoudemire-Marion remain one of the best trios to have never won a championship and the blame can justifiably be put on Sarver. Being cheap obviously has its consequences but can the same be said about overpaying? The Golden State Warriors made headlines entering the 2020-2021 NBA season by amounting a total payroll of $173,524,090, one of the highest in league history. In this article we'll take a look at NBA spending over the past decade and identify how it affects regular season wins.

How Much are Teams Spending?

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A first impression reveals that there is almost no correlation between spending and regular season wins, at least in the past decade. In fact, the r-squared value is a measly 0.11, indicating that there is very little association between the two variables. This brings us to the obvious conclusion, it's not how much you spend but rather how you spend it; quality over quantity.

The average NBA team spent $745,276,160 in salary money over the past decade and won 399.6 games on average. This amounts to $1,865,055.46 spent per win. We will set this value as our baseline. Teams spending above this amount fall below average in salary per win efficiency and teams spending below this amount are above average in salary/win efficiency.

Teams with Above Average Salary/Win Efficiency:

San Antonio Spurs, Portland Trailblazers, Houston Rockets, Golden State Warriors, Indiana Pacers, Denver Nuggets, Utah Jazz, Los Angeles Clippers, Phoenix Suns, Toronto Raptors, Boston Celtics, Atlanta Hawks, Chicago Bulls, Miami Heat, Dallas Mavericks, Milwaukee Bucks, Oklahoma City Thunder, Memphis Grizzlies

Teams with Below Average Salary/Win Efficiency:

New York Knicks, Minnesota Timberwolves, Brooklyn Nets, Cleveland Cavaliers, Orlando Magic, Detroit Pistons, Charlotte Hornets, Sacramento Kings, New Orleans Pelicans, Washington Wizards, Philadelphia 76ers, Los Angeles Lakers

What Stands Out?

The San Antonio Spurs were the most efficient spenders of the past decade, spending only $1,447,418 per win. Much of their success can be attributed to their player development and scouting departments as they were able to get a lot value out of their rookies, like Kawhi Leonard, limiting their need to break the bank on other stars. They led the league in wins at 541 while only ranking 6th in money spent. On the other hand, the New York Knicks were by far the least efficient spenders, spending $2,532,120 per win, almost $7,000,000 more than the average team. They're a franchise characterized by poor ownership and bad management. Despite being the 4th highest spenders, they ranked 28th in wins.

From what we've seen so far, spending more money doesn't lead to getting more wins. The top left and bottom right quadrants provide further evidence. Many of the league's small market teams fall into these quadrants. The Portland Trailblazers, Indiana Pacers, Denver Nuggets, and Utah Jazz all spent less money than average and won more than average. On the other hand, the Detroit Pistons, Orlando Magic, New Orleans Pelicans, and Washington Wizards spent more money than average and won less than average. All of these teams fall into the small market category but what separates them is their management and player development.

Salary efficiency is an interesting topic and a revealing one too. I chose to look at salary over the past decade as 10 years is enough for teams to go through multiple contract cycles, preventing them from being punished too heavily for one bad contract, such as the Memphis Grizzlies' Chandler Parson Contract. Unfortunately, many of the teams that find themselves in the top left quadrant have remained there for quite some time due to repeated poor decisions and they may find themselves stuck there for the entirety of this decade too.

Overall, the conclusion of the graphic is clear; good teams spend their money more wisely. While it's true that some of the most successful regular season teams spend a lot of money, many reckless spenders end up wasting their dollars. What separates the good and bad front offices aren't the quantity of cash on hand, but rather how they use their money.

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