Ranking the NBA's Most Foolish Spenders

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Ranking the NBA's Most Foolish Spenders
Anthony Gruppuso-USA TODAY Sport

The NBA has a spending problem. 

While some general managers and front offices are fiscally responsible, plenty more throw around money like it's nothing. At least that's what I'm assuming based on the number of players who completely fail to live up to the salaries they're given. 

In order to determine which teams are the most foolish spenders, we'll be turning to an original metric called Contract Value, or CV. 

CV is based on the principle that there's a relationship between salary and value, so to determine what that relationship is, I looked at every player who has suited up at least once during the 2013-14 campaign. That does free the Boston Celtics from Rajon Rondo's contract, the Denver Nuggets from Danilo Gallinari's and so on, but it's a necessary evil. 

A player's value was determined by a combination of quantity and quality, as it's necessary to both play well and be on the court in order to maximize contributions. Since PER—despite its acknowledged flaws—is the best single-number summary of a player's effectiveness, that's what I'm using for quality. 

Therefore, a player's value can be calculated simply by multiplying PER by the minutes played. 

That quantity was then measured against salary during 2013-14, as given by Spotrac.com. Once the numbers were put in for all 422 players, I used a linear regression to create a formula for expected value. It looks like this: 

Expected value = 0.0009*salary + 4674.6

The r^2 value (or correlation coefficient) of this regression is a weak 0.34, but that still indicates that there's at least some correlation. As a result, this isn't an exact science, but rather an educated estimate since rookie contracts, injuries and playing time all make it tough to find a perfect correlation. 

Once the expected value was found for each player, his CV was determined by subtracting it from his real value. A positive rating would indicate that he's produced more than expected, and a negative would tell the opposite. 

CVs were summed for each team, and the squads were ranked accordingly. 

The Phoenix Suns came in first place—by a huge margin—with a 31,425.21 CV, but who was at the bottom? 


Note: All statistics, unless otherwise indicated, come from Basketball-Reference and are current as of Jan. 8. That's especially relevant because the regression and values will change as the season progresses and players have more minutes under their belts while justifying their contracts

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