I’ve been playing with NBA salary data lately. It’s fascinating.
I mean, no amount of data is going to tell you what’s happening on the court. But salary data, yeah, it actually comes surprisingly close.
Stare at the numbers long enough and you wander into some compelling questions. Perhaps the most compelling of which…
What does it cost to win an NBA title?
Obviously there’s no magic number. But when you look closely at the past 30 years of NBA salary history, there’s a clear pattern that emerges.
NBA Title Team Payroll as a % of Salary Cap
The title says it. Take the payroll of the NBA championship team, divide it by salary cap for that year, and you get the percentage of salary cap required to field a winning NBA team for the given year.
Here’s the graph…
So what’s the point?
Well, for one thing, the consistency stands out. The average title payroll comes in at around 137% of salary cap. And if you dump the outliers (which are all Phil Jackson teams btw) title winners have spent between 107% and 160% of salary cap in each of the past 33 seasons.
Another detail, less obvious. Every time the NBA title has gone to the highest payroll spender during this time period, it’s been team that has seen been to the finals within the past 3 seasons with a very similar roster.
Finding patterns in data doesn’t always point to the truth in the real world. But in this case, the data happens to be consistent with valid, real-world philosophy.
Spending doesn’t win titles. Money can get you a follow-up title, if you’ve already won one recently with a similar roster. In rare cases, it can get you from second place to first place. But going out and buying a title team just doesn’t really work in practice.
What does this mean for the 2024 title?
If we take the 2 qualities covered above, qualities which have stood for 33 seasons, can we eliminate certain teams from playoff contention this year?
The 2023-2024 salary cap is $136,021,000. Taking that previously mentioned range of 107%-160%, we get a payroll range of $145.5 Million-$217.6 Million.
That eliminates 8 teams from contention. The 2023-2024 season is currently underway, and most of those 8 teams have already eliminated themselves from contention in terms of their records. So, this doesn’t really tell us anything that we didn’t already know.
The only team with any possibility of breaking the mold at this point would be the Orlando Magic. They’re looking good, but the odds that they’ll make it down the stretch are not great.
Takeaways
There’s a prime payroll range when it comes to building an NBA title roster. It’s surprising how many teams will price themselves out of a title before the first game is played.
But it’s also really tough to hang onto a successful roster once you’ve built it. You have to continue pulling in promising talent at a discount to offset the cash you’re dumping into your star players.
There’s been discussion lately of the concept of simultaneously building the next generation of players while you’re winning titles with your proven roster. The Warriors are currently proving just how difficult this is.
Patterns tend to break once you extend the timeline far enough. But for the time being, it seems highly likely that optimal spending for a title-contending NBA team falls in the range of 106%-160% of salary cap.