Overpaying in the NBA

Identifying who’s making too much or too little money in an increasingly stingy league.

Research Objective

With the new CBA being passed, NBA teams have been forced to rethink how they spend their money. With the ominous “2nd apron” ever-looming, we will see a decline in star-studded super-teams, and more of a focus on building deep teams through the draft. There are all sorts of changes embedded in this new agreement (you can read the CBS article about it here), but for the sake of this project, all you need to know is that saving money is more important than ever in the NBA. So, I decided to figure out which players are getting overpaid, and which players are getting underpaid.

Methodology

To classify someone as over/under paid at the most basic level, you’ll want to compare their production relative to their salary. In an attempt to simplify this model, I just looked at 2023-24 season stats and how much the player made just that year. This avoids the issue of inflation and guessing what the new NBA TV deal is going to be (which will increase the salary cap, thus skewing old salaries). However, doing this ignores salary length, increasing/decreasing salaries, and player growth over the past few years. There’s always give and take when building models like this, and this one definitely leans more to the simpler side.

Model

I created a machine learning linear regression model with per game counting stats as the input, and the salary as the variable the model is trying to predict.

As the salaries get higher, they get harder to predict and we see more variation. But for the most part, every point to the left of the red reference line is getting overpaid, while everyone to the right is underpaid.

The most important factors for this predictive model were age (as players get older they typically demand more money), PPG, 2PA, 3PA, FTA, games started, and eFG%. The PPG and field goal attempts per game are all indicators of usage. The more you use a player, the more you're willing to pay him, and the more you pay him, the more you want to use him and get your money's worth. And the eFG% is just a measure of efficiency. The highest paid players in the league see a lot of volume, but they also have to be efficient with that volume.

25 Most Overpaid Players

Let's take a closer look at some of the most interesting names on this list.

Rudy Gobert

Because the model only looks at counting stats, it is not able to see Gobert's full value. While he does get a decent amount of blocks and rebounds, his real impact isn't seen on the stat sheet. He has one of the most intimidating paint presences in the league and alters so many shots at the rim. Teams have to run different offenses when he's on the floor, and he's a 3x Defensive Player of the Year because of it. So no, I don't actually think he's the most overpaid player in the league.

Isaiah Hartenstein & Isaiah Joe

The two Isaiahs in OKC. While they may be overpaid compared to their production, the Thunder don't really care. They are such a deep and young team with plenty of assets and cap room to spare. Their team payroll is $165 million (5th lowest in the league) while being the #1 seed in the west last year. Not to mention their 30+ picks over the next 5 drafts. While these two guys might be a bit overpaid, it doesn't really matter.

Bradley Beal, Zach LaVine, & Jimmy Butler

These are the names you think of when you think overpay. Old shooting guards still on the max deal they got when they were max players. This is the exact type of player that NBA teams are staying away from. They don't add much besides an inefficient 20 ppg, but are getting paid like superstars. There's a reason no one will trade for LaVine. There's a reason the Wizards got so little in return for Beal (partly because of his no-trade clause). And there's a reason the Heat are going to be the perennial 7 seed with Butler as their franchise cornerstone. These guys don't produce enough and they're getting paid too much to afford a good, deep team around them.

25 Most Underpaid Players

Overall, this list looks pretty good. A lot of these guys are underrated and will probably see a big pay increase on their next deal. Let's break it down again and look at a few interesting names and groups on this list.

Young Guys on the Verge of Breaking Out

This category makes up most of this list so I can't name them all. But within this group there are two subgroups in my opinion: already great players primed for an all-star leap, and players primed for a borderline all-star leap. The first category would be guys like Jalen Williams, Franz Wagner, Scottie Barnes, Chet Holmgren, and Victor Wembanyama. These guys have proven they can contribute to winning with a large sample size (or are aliens). They are currently very good players on cheap deals who are likely to get even better next year.

The other group are guys who are either slightly worse or have more question marks. Alperen Sengun, Cam Thomas, Jalen Johnson, Cade Cunningham, Coby White, Evan Mobley, and Jonathan Kuminga. Sengun and Cade have both dealt with injuries recently and need to prove they can perform at a high level all season. And if they do, they will be outperforming their contract by even more. Cam Thomas and Jalen Johnson have never contributed to winning teams, but have shown flashes of high upside. Mobley and Kuminga have been a part of winning teams but not contributed as much as they might be able to in the future. These are all young, promising guys who are currently great players outperforming their contract. But they all have the potential to do even better over the next couple of years and earn a huge payday when their contract is up.

Jalen Brunson

Brunson is severely underpaid because, well, he did it on purpose. This summer instead of signing the supermax extension he was eligible for, he took a pay cut so the Knicks could afford to keep a contending team around him. Some people thought it noble, and some people thought it stupid. As an aging small guard, this was probably his only chance to sign that huge deal. But on the other hand, he's still making 25 f*****g million dollars. No matter what rival fans on Twitter say, I think he'll be doing ok financially. And I think his family 10 generations in the future will still be doing ok financially. Personally, I don't judge the players either way. If you want to make the most money you can, by all means go for it. It is your job at the end of the day. And if you want to leave $20 million on the table so you can compete for a championship for the next 3-4 years, I respect that too.

All this to say, I'm glad the model classified Brunson as underpaid since he quite literally is underpaid by design.

Conclusion

The conclusion to draw from this is not very surprising: draft good players who can contribute to winning while on their rookie contract. Again, look at OKC. Their second and third best players (J Dub & Chet) are making a combined $15 million per year right now. That's why they were able to go out and overpay for Hartenstein. Meanwhile, old teams like the Bucks and Suns are very limited on what they can do because their respective big 3's put them in the second apron almost by themselves. It is more important than ever to draft right. And with a generational draft class on the horizon, there is a lot at stake for the bottom half of the league. Getting your pick right could be the difference between another 5 years of tanking, and a future filled with banners.