Sports
Sports

Do NBA Players Really Need College?

| by David Berri

College seniors are the most overpaid group of players drafted by the NBA.

Okay, that’s the basic idea behind this post.  Let’s start with the basic methods followed in the analysis supporting this conclusion.

This preliminary analysis was powered by NerdNumbers and conducted as follows:

  1. Using data from basketball-reference.com, nba.com and thedraftreview.com, NBA players drafted since 1978 were split into six groups: high school players, foreign players, freshmen, sophomores, juniors and seniors. Some errors have been identified in the copies of this data, so if you notice any please leave a note in the comments section.
  2. The NBA’s expenses for player salaries were divided by the total number of wins in the league to determine the average cost per win for each season since 1986. Player salaries for 1987 and 1990 were not available for this preliminary analysis. Currently, individual players’ season data were omitted if the player was traded after the start of the regular season. This will be corrected and the analysis will be updated in the future.
  3. The salaries for each group of players were subtracted from the product of the wins produced by that group and the average cost per win to identify the “cost efficiency” for each group. In other words…. Cost efficiency = (Wins Produced * Average Cost Per Win) – Player Salaries.

Here is how college seniors compare to players coming out high school:

From 1986 to the present, college seniors were paid over $700 million more than their production on the court warranted.  Much of this over-payment, though, occurred in recent years.

The average cost per win produced in the NBA from 1986 to 2011 is $0.98 million. The average player produces 0.100 wins per 48 minutes (WP48), and in 1998, college seniors produced an average of 0.101 WP48. If we look at all years from 1986 to 1998, seniors were only overpaid three times.

Since the lockout-shortened season in 1999, however, the performance of college seniors has fallen off but their costs have not. The average college senior only offered a 0.069 WP48 in 2011. And seniors were collectively overpaid 12 times in the thirteen seasons since the lockout.

On the other hand, players who came directly out of high school have produced an above average 0.144 WP48.   And these players have been underpaid in 13 of the last 16 seasons.

The results are listed below. Click the links for each group to see a spreadsheet of the analysis.

High School Players

  • Total Wins Produced: 1,475.4
  • WP48: 0.144
  • Total Salaries: $1.87 billion
  • Average Cost Per Win Produced: $1.27 million
  • Cost efficiency: Underpaid by $313.8 million
  • Most productive player’s cost: Kevin Garnett with 287.3 wins produced and $270.1 million in salary
  • Least productive player’s cost: Al Harrington with -12.8 wins produced and $68.6 million in salary

Foreign Players

  • Total Wins Produced: 1,585.5
  • WP48: 0.107
  • Total Salaries: $2.09 billion
  • Average Cost Per Win Produced: $1.32 million
  • Cost efficiency: Underpaid by $105.3 million
  • Most productive player’s cost: Dirk Nowitzki with 159.2 wins produced and $141.3 million in salary
  • Least productive player’s cost: Andrea Bargnani with -20.4 wins produced and $29.5 million in salary

Freshmen

  • Total Wins Produced: 934.5
  • WP48: 0.099
  • Total Salaries: $1.24 billion
  • Average Cost Per Win Produced: $1.33 million
  • Cost efficiency: Underpaid by $93.6 million
  • Most productive player’s cost: Shawn Kemp with 115.4 wins produced and $64 million in salary
  • Least productive player’s cost: Dajuan Wagner with -7.4 wins produced and $8.2 million in salary

Sophomores

  • Total Wins Produced: 2,634.3
  • WP48: 0.117
  • Total Salaries: $3.16 billion
  • Average Cost Per Win Produced: $1.2 million
  • Cost efficiency: Underpaid by $401.6 million
  • Most productive player’s cost: Jason Kidd with 282.1 wins produced and $174.5 million in salary
  • Least productive player’s cost: Ron Mercer with -9.0 wins produced and $33.5 million in salary

Juniors

  • Total Wins Produced: 4,878.0
  • WP48: 0.123
  • Total Salaries: $4.7 billion
  • Average Cost Per Win Produced: $0.96 million
  • Cost efficiency: Underpaid by $148.1 million
  • Most productive player’s cost: Karl Malone with 282.2 wins produced and $104.1 million in salary
  • Least productive player’s cost: Maurice Taylor with -23.4 wins produced and $39.4 million in salary

Seniors

  • Total Wins Produced: 14,510.8
  • WP48: 0.093
  • Total Salaries: $12.4 billion
  • Average Cost Per Win Produced: $0.85 million
  • Cost efficiency: Overpaid by $736.8 million
  • Most productive player’s cost: John Stockton with 279.3 wins produced and $66.7 million in salary
  • Least productive player’s cost: Clifford Robinson with -27.2 wins produced and $60.8 million in salary

While members of the National Basketball Players Association stand together during the lockout, maybe they should begin to question the value of higher education for their players.

The NBA owners don’t collectively lose money with bad contracts.  This is because player salaries are a fixed cost as a designated percentage of basketball-related income.  So when the Knicks overpay Eddy Curry, this doesn’t really cost the owners as a group.

Who does lose from bad contracts?  Perhaps surprisingly, it is the player.  The majority of players lose money with bad contracts because they reduce the pool of money available for the rest of the players. So while younger, productive players remain underpaid by salary restrictions (like “rookie-scale contracts” and “max deals”); the older, less productive players get to be overpaid by the fruits of their peers’ labor.

So maybe NBA players should be thinking about the benefits of rookie salary scales and the factors that drive bad contracts in basketball.

- Mosi Platt

If you enjoyed this article, then you may also like a similar analysis posted at the Miami Heat Index blog –  Heat Check: Value of a College Education in the NBA.