NBA skills market

Posted by on July 10th, 9:08 am

On Wednesday the league-wide moratorium on new business ends, and NBA free agents can officially sign contracts. Before tomorrow’s inevitable insanity when all 30 GM’s will turn into manic, screaming traders on the NYSE floor, I thought it would a good idea to examine the NBA marketplace as it currently stands.

For all the hype, scrutiny, and fan interest surrounding it, the NBA is really just a stock exchange. Teams buy stock in certain players (sign them to contracts) because of their value, profits, and dividends (skills and talents). But what is the going price for these skills? What will an elite scorer or an out-of-this-world passer really cost you? I analyzed the salaries of every NBA player currently under contract, and excluded players on their rookie deals because they haven’t had their true value determined on the open market. I then rated each player across 14 different skills. Here’s what I found:

1.  Elite Scorer

Price: $4,705,000

Criteria: Average >25 ppg

2.  2nd tier scorer

Price: $4,224,000

Criteria: Average >18 ppg

3.  3rd tier scorer

Price: $1,660,000

Criteria: >13.5 ppg

It will come as no surprise that scoring ability was the most statistically significant of all the skills. There’s no way around it: teams pay for scoring. What is interesting, however, is that a player who scores 25 points a night like LeBron or Kevin Durant has only slightly greater value than a guy who scores 18 points a night like Chris Bosh or Joe Johnson. What this means is that GM’s overpay 2nd tier scorers. Teams pay their highest scorer like a top-tier scorer even if he’s not elite.

4.  Shot Creator

Price: $1,247,000

Criteria: Synergy Isolation stats

Teams value a player who can create offense for himself. Whether it’s penetrating to the hoop or pulling up for a jumper, teams need a player they can throw the ball to and say, “Go get us a bucket.”

5.  Post Scorer

Price: $767,000

Criteria: Synergy Post Up stats

Perhaps nothing is more indicative of the death of the NBA post player than the small value that teams have attached to players who can score down low. There aren’t many players who can score effectively with their back to the basket, but even with a low supply the price remains depressed. Most teams would rather have a 7-footer who can shoot like Dirk Nowitzki than a guy like Al Jefferson who can bang and score down low.

6.  Spot-up Shooter

Price: $718,000

Criteria: Synergy Spot Up stats

The low price of this skill isn’t due caused by a lack of demand on the part of NBA front offices. The price for spot up shooters is low because the market is saturated with them. During the analysis, it became clear that many players in the league possess only this skill. Players develop their spot up jumper as a means of hanging on a while longer in the league.

7.  Elite 3-point Shooter

Price: $822,000

Criteria: >1.5 3pm/game

In the first run of this analysis I had two 3-pt shooting categories: efficiency and volume. Neither was very significant. When I combined them into the single category shown above, however, the price became much more accurate. Some players are efficient shooters and some volume shooters. There doesn’t seem to be a difference in the minds of NBA GM’s though. All they seem to care about is if the shots are dropping.

This brings me to a larger point. The reason I have used per-game stats throughout this analysis instead of the per-minute variety is that teams pay more for production than efficiency and potential. Actual points scored trumps points-per-48 every time. Per minute stats and PER can be a great indicator of talent and potential and are no doubt used by GM’s, but those qualities usually have to translate into production before a player gets paid.

8.  Elite Rebounder

Price: $3,193,000

Criteria: >9.5 rpg

9.  2nd Tier Rebounder

Price: $2,338,000

Criteria: >7.0 rpg

10.  Good Rebounder (Guard)

Price: $1,430,000

Criteria: >4.0 rpg

Other than points per game, there was nothing as statistically significant in the results as rebounds. It’s interesting that with all the advanced metrics and analyses used to measure every aspect of an NBA player’s performance, the least sexy part of his box score is still quite important. RBI’s may have become irrelevant in baseball, but rebounds will never die.

11. Elite Passer

Price: $1,446,000

Criteria: >7.0 apg

Passing was a strange skill to analyze. While there was a clear price for elite passing, there was no significance in the lower tiers. This means that as the assist numbers drop, the market gets very murky for GM’s. So while teams are definitely willing to pay for top tier distribution, they are less inclined to consistently shell out cash for lesser assist production.

12. Rim Protector

Price: $1,766,000

Criteria: >1.5 bpg

Supply and demand strikes again with this skill. A limited supply of elite shot blockers drives the price of rim protection way up.

13.  7-footer

Price: $975,000

Criteria: Being 7 feet tall

Like it or not, some guys get paid just for being huge. These giants may not be able to shop in normal stores or walk through doorways without stooping, but their height is worth nearly a million bucks a year on its own, so you can’t feel too bad for them.

14. Face of the Franchise

Price: $4,721,000

Criteria: Being the highest-paid or most recognizable player. Being the guy who is on the media guide cover.

Right off the bat I want to make it clear that not every team has one of these players (Denver, Golden State, Charlotte). Some teams, on the other hand, have more than one (Miami and OKC). Like it or not, having a star player sells tickets and generates fan interest. Paying a player above and beyond what his skill set is worth is not always a bad decision. Signing someone to a big contract generates attention and press for the team, and holding on to your best player, even if it means overpaying him, helps send a message to your fan base. I’m not condoning or supporting this tactic, I’m just stating that it is employed by some teams, and thus, superstars have value beyond what they can do on the court.

This analysis does not wholly describe the relationship between NBA player skills and their salaries. In truth, it only accounts for 75 percent of the variability. The intent of this column is not to be the definitive statement on talent valuation. Rather, it’s meant to serve as a starting point in assessing free agent value. Between now and the start of the season more than 150 players will sign new deals. The skills above and their associated prices can help elucidate whether a player is overpaid, underpaid, or somewhere in between.

NBA GM’s are like investment bankers. People ask bankers to grow their 401(k) accounts. Fans ask GM’s to improve their teams. The dollars are precious in both scenarios, but while most people’s interest in their portfolio’s performance is solely financial, their interest in their team’s performance is much deeper. A bad investment can set your retirement account off a few percentage points, but a bad free agent contract can cripple a team’s immediate and long-term success. Any NBA contract can be a make or break proposition.

Come tomorrow the offers will be flying and the market will be in flux. But for now it rests. The calm before the storm.

Thanks to MySynergySports, HoopsHype, and HoopData for the stats and salary information that made this possible.

Ryan Weisert

Ryan Weisert is a staff writer for ValleyoftheSuns. You can also find him at his sports and pop culture blog Spectavius.com.

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Tags: Free Agency

11 responses so far ↓

  • 1 Sir Thursday // Jul 10, 2012 at 9:33 am

    This is a really good idea! This should allow you to analyze whether individual players are over or under paid relative to their production. Of course, there are mitigating factors like expected production in the future to consider, but seems like it should be an awesome tool!

    A couple of other categories that might be interesting to see if they have an effect:

    - Playoff experience
    - Number of years in the league
    - Defence (Obviously this is a bit broad, but you could look at some synergy statistics about 1-on-1 defence, or maybe some adjusted plus/minus?)

  • 2 Dan // Jul 10, 2012 at 9:47 am

    Great analysis! Is there any chance you use Hollinger’s infamous PER and assign a $ value? I.e. For every point of PER players get paid $1M or does the PER data not match the salary data?

  • 3 bk // Jul 10, 2012 at 10:53 am

    Great analysis. It should also include an injury history discount.

  • 4 steve // Jul 10, 2012 at 11:43 am

    I really like this idea. A GM shopping cart. Pick up skills off the shelf with a known value.

  • 5 Justin // Jul 10, 2012 at 12:57 pm

    How many of these are dummy variables?

  • 6 Matt // Jul 10, 2012 at 6:17 pm

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  • 7 Anthony // Jul 10, 2012 at 9:03 pm

    Question: Do turnovers demonstrably decrease a player’s value? I ask because they’re usually measured in relationship to assists, and while a small group of elite PGs have really great assist/TO ratios, there’s a big dropoff from the first to the second tier. That might explain the limit on the value attained generally through assists.

  • 8 Jonathan Brill // Jul 10, 2012 at 9:39 pm

    This is great!

  • 9 Albert // Jul 11, 2012 at 7:52 am

    They should and do. But I’ve always been under the impression that turnovers, even when being used to gauge point guards, should be compared to overall usage (which takes into account the number of possessions they take up) and not just the assists created by a player.

  • 10 Don // Jul 15, 2012 at 8:57 am

    GREAT JOB EVEN IF I AM SLIGHTLY PREDJUDICED

    Grandpa

  • 11 NBA Skills Market 2.0 // Jun 30, 2013 at 4:54 pm

    [...] are valued on a singular basis (Example: $ per rebound or $ per assist.) Points were the exception. As was the case in the original Skills Market last season, points scored correlated better with salary when tiered, not valued on a per point basis. It will [...]

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