NBA

Dollars to Decimals

We are more than a third of the way through the NBA season and I have set my sights on figuring out the most cost effective players in the league. What I mean by cost effective is simply a player’s efficiency rating over their salary cost (PER/Salary).

You may be asking, “What is PER?” and “Why is PER significant?” John Hollinger, the founder of the formula that produces the efficiency rating, explains that, “The PER sums up all a player’s positive accomplishments, subtracts the negative accomplishments, and returns a per-minute rating of a player’s performance.”

The PER is a good comparative measure because it rates players on a per-minute basis, which means that whether that player played 10 minutes in the game or 48 minutes in the game, the rating adjusts accordingly and allows for a more equal comparisons to be made. However, one of the knocks against PER is that is does not showcase defensive effectiveness as much as offensive effectiveness. Although it does factor in defensive statistics (blocks and steals) into the formula, it has not been known to produce favorable ratings for lockdown defenders.  It is not favorable to defenders because it does not fully gage the defensive impact players can have, or the disruption they can cause to their opponents offensive strategy (i.e. tipped passes, causing turnovers, drawing charges, boxing out, etc.).

Needless to say, PER is widely regarded as one of, if not, the most useful statistics to determine a player’s efficiency as it is both pace-adjusted and time-adjusted.

So, I decided to measure a player’s PER against their respective salary. The calculation produced a new number, or statistic, that is something that I will call the “Dollars to Decimals” ratio.

As for the parameters I established, I wanted to evaluate those players that were in the top 100 of PER.  All of the stats I analyzed were inclusive of all games up until December 25, 2015. An additional parameter I set was the player had to have played in at least 300 minutes.

Results:

The lower a player’s “Dollars to Decimals” ratio (Salary/PER) was, the more cost effective a player was. For example, Hassan Whiteside has the lowest “Dollars to Decimals” ratio at 39,730, meaning Whiteside is the most cost efficient player. In other words, he is the least expensive player in respect to his performance. The Miami Heat are paying Hassan Whiteside less than $1 million – $981,348 to be exact – for the 2015-2016 season, while his PER of 24.7 is one of the best in the league.   On the other end of the spectrum, Dwight Howard had the highest “Dollars to Decimals” ratio at 1,221,823. Meaning that, within the sample of players I analyzed, Dwight Howard is the most expensive player in respect to his efficiency on the court.

Attached below is the corresponding list, which ranks players from lowest cost ratio to highest cost ratio.

List by Salary:PERList by Salary:PER 2NBA Players' Cost Effectiveness

A more condensed version with notable names is pictured below.

Player PER Salary RATIO Ranking
Hassan Whiteside 24.7 $981,348 39,730 1st
Giannis Antetokounmpo 17.3 $1,954,000 112,947 15th
Andre Drummond 23.8 $3,272,090 137,482 21st
Damian Lillard 21.4 $4,236,287 197,957 29th
Kristaps Porzingis 18.3 $4,131,720 225,777 31st
Anthony Davis 25.0 $7,090,730 282,829 39th
Tim Duncan 17.6 $5,250,000 298,295 41st
Stephen Curry 32.1 $11,370,786 354,230 44th
Russell Westbrook 30.1 $16,744,218 556,286 56th
Kawhi Leonard 27.5 $16,407,500 596,636 60th
James Harden 22.2 $14,000,000 630,630 65th
LeBron James 26.5 $22,970,500 866,811 88th
Carmelo Anthony 20.3 $22,875,000 1,126,847 99th
Dwight Howard 18.3 $22,359,364 1,221,823 100th

Analysis:

A major takeaway that I noticed, as one would expect, is that the player’s salary was the driving factor in determining cost efficiency. The more expensive a salary is will translate into a player being more expensive in regards to the “Dollars to Decimals” ratio.

This is not to say that if Player A has a bigger contract than Player B, that A cannot produce a more cost effective ratio than B.  I am trying to point out that those players with larger, more expensive, contracts will be somewhat restricted in moving up the rankings in cost efficiency.  This does not mean that the player is not playing well, but rather the opposite, it is probable that that player is a superstar signed on to a maximum deal.  For example, Dwight Howard would need to produce a PER of 562.8 in order to be ranked #1 in cost efficiency.  This only proves that maximum contracts make it seemingly difficult to be that “diamond in the rough” regarding cost efficiency, which is why I would focus in on a certain range of salaries when comparing players.

An interesting thing to be aware of is that there are some major diamonds in the rough.  The most cost effective players are those that are not signed to maximum deals yet still performing extremely efficiently when out on the floor. The 2 reasons why these players produce such a low “Dollars to Decimals” ratio is because of where they are in their careers and the type of contracts they are currently signed onto.

For example, there are four (4) scenarios that are evident and impact cost efficiency.

  1. Player is from the D-League

As per the numbers, Hassan Whiteside is the most cost effective player in the NBA. Whiteside was drafted by the Sacramento Kings in 2010 and then proceeded to bounce around the D-League.  Whitened played for the Reno Bighorns, Sioux Falls Skyforce, Rio Grande Valley Vipers and the Iowa Energy, before signing to a minimum salary of $981,348 with the Miami Heat last season. He is now leads the NBA with 3.91 blocks/game and is in the top five in the league in FG% at 61.2%.

  1. Player signed to a rookie contract

There are numerous players that are still playing under their rookie contracts, yet have quickly made a name for themselves. Prime examples of such a scenario include: Giannis Antetokounmpo ($1,954,000), Andre Drummond ($3,272,090), Kristaps Porzingis ($4,131,720), and Karl Anthony-Towns ($5,703,600). Drummond is in his last year of his contract with the Detroit Pistons and will be a restricted free agent after this season.  Porzingis and Towns are rookies, drafted together in the 2015 NBA draft class.  And, Antetokounmpo has one more year left on his contract with the Milwaukee Bucks after this season.  All of these players are still under contract from when they were drafted by their respective teams and are performing at a very high level early on in their careers.

  1. Player signed a contract while dealing with an injury

One player in particular sticks out and it happens to be the best player in the league right now – Stephen Curry. In the beginning of the season, Curry led the Golden State Warriors on a historic winning streak. He makes the game look effortless night in and night out, as he knocks down shots from just inside the half court line. But even more so, he does everything else tremendously well and his PER reflects just how easy the game is for him, as he owns the highest PER in the league this season at 32.1. Curry is currently under contract with the Warriors for $11,370,786. He signed his current four-year contract heading into 2013-14 season. At the time of the signing, there were questions regarding him being injury prone as he dealt with major ankle injuries and only played in 26 games during the 2011-12 season. Being that he is the reigning league MVP and is getting paid roughly $11 million, I would say Stephen Curry is extremely cost effective.

  1. Player signed for less money at the back end of his career

Tim Duncan signed a two-year deal over this past summer worth $10,850,000. Duncan is one the greatest Power Forwards to play the game, yet he has decided to take substantially less money in order for a championship caliber team to be built around him as he is in the back end of his career. He is getting paid $5,250,000 this season, as he continues to play at an extremely efficient rate owning a PER of 17.6. Being that he decided to take less money for the last couple of seasons of his career, the lower salary paid out to him resulted in him earning one of the top “Dollars to Decimals” ratio at 298,295.

The “Dollars to Decimals” ratio is driven by the player’s salary, meaning their efficiency in terms of cost will be driven by the expensiveness, or lack thereof, of their contracts.

This is not to say that if Player A has a bigger contract than Player B, that A cannot produce a more cost effective ratio than B.  I am trying to point out that those players with larger, more expensive, contracts will be somewhat restricted in moving up the rankings in cost efficiency.  This does not mean that the player is not playing well but most likely the opposite, as it is probable that that player is a superstar signed to a maximum deal.  For example, Dwight Howard would need to produce a PER of 562.8 in order to be ranked #1 in cost efficiency.  This only proves that maximum contracts make it seemingly difficult to be that “diamond in the rough” regarding cost efficiency, which is why I would focus in on a certain range of salaries when comparing players.

Improvements:

If I were to conduct this project again, I would divide it into categories based on salary. I would put players into a certain group based on their respective salary and those alike. For example, I might divide players into groups as follows:

  • < $4,999,999
  • $5,000,000 – $9,999,999
  • $10,000,000 – $14,999,999
  • $15,000,000 – $19,999,999
  • 20,000,000 +

The reason I would do this is to really hone in onto who is most cost efficient at each salary level. The more expensive salaries would still drive the “Dollars to Decimals” ratio but when comparing maximum-contract-type players, they could be judged on a more level playing field by comparing them to those players who are getting paid a similar salary.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s