Who is Worth a Max Contract?

Columbia University Sports ManagementNovember 10, 2016

Josh Carroll, Ang (Enzo) Li, Jeremy Masem,Rob Moras, CJ Pettway and Samantha Trella

OBJECTIVESMaximum allowable contract for playersEvaluation and classification of playersActual Value Metric (AVM)Projection of player performanceSurplus value rankingsFinal player rankings

IntroductionWhat is a

Max Contract?

Evaluating Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

WHAT IS A MAX CONTRACT?Introduction

What is a Max

Contract?Evaluating

Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

Years in NBA Defined Max Salary ‘15-16 ‘16-17

0-6 25% of cap 16,407,500 22,116,750

7-9 30% of cap 19,689,000 26,540,100

10+ 35% of cap 22,970,500 30,960,450

4 year deals based on % of cap and service, 4.5% raises each season

Salary no lower than 105% of previous season

16-17 salary cap = $94.1M Rose Rule

a) 2x All Star Starter b) 2x All-NBA

c) MVP

EVALUATING PLAYERSData and Methodology:

WS, VORP, PER, BPM, PTS highly correlated (Franks, D’Amour, Cervone, Bornn 2016)

PER: Player Efficiency RatingWin Share: Value on Team LevelClassification: K-means Clustering

IntroductionWhat is a

Max Contract?

Evaluating Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

EVALUATING PLAYERSIntroduction

What is a Max

Contract?Evaluating

Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

EVALUATING PLAYERSIntroduction

What is a Max

Contract?Evaluating

Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

EVALUATING PLAYERSIntroduction

What is a Max

Contract?Evaluating

Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

EVALUATING PLAYERSIntroduction

What is a Max

Contract?Evaluating

Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

EVALUATING PLAYERSIntroduction

What is a Max

Contract?Evaluating

Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

EVALUATING PLAYERSIntroduction

What is a Max

Contract?Evaluating

Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

Actual Value Metric (AVM) Adjust Win Share based on team

performance and PER Regress Win Share on PER for

each team, compare slope to league average

Assumption: Star/leader of average team

EVALUATING PLAYERSIntroduction

What is a Max

Contract?Evaluating

Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

Player Pos Age Team AVM

C. Paul PG 30 LAC 12.95

S. Curry PG 27 GSW 12.68

A. Davis PF 22 NOP 12.66

H. Whiteside C 26 MIA 12.22

K. Durant SF 27 OKC 12.12

L. James SF 31 CLE 11.96

2015-2016 AVM Rankings

PROJECTING PLAYER PERFORMANCEIntroduction

What is a Max

Contract?Evaluating

Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

Data and Methodology:Based on historical data from 2005-

2016Peak at age 27Time Series Model (ARMA): Projects

PERProjected PER factored in AVM

PERs = (0.7)*PERs-1 + (0.3)*PERs-2 + Avg. Improv.

PROJECTING PLAYER PERFORMANCEIntroduction

What is a Max

Contract?Evaluating

Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

MAX CONTRACT PLAYERS RANKED (15-11)

IntroductionWhat is a

Max Contract?

Evaluating Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

15. Klay ThompsonSV: $2,800,216.44 14. DeMarcus Cousins

SV: $6,313,816.44

13. Gordon HaywardSV: $6,700,916.44

12. Kemba WalkerSV: $6,934,716.44

11. Kevin DurantSV: $7,722,493.22

MAX CONTRACT PLAYERS RANKED 10. RUDY GOBERT

IntroductionWhat is a

Max Contract?

Evaluating Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

Max Contract: 4 year, $94.6MYear 1: $22.1M

Year 2: $23.1M

Year 3: $24.2M

Year 4: $25.2M

Actual Max Contract: 4 year, $107.3MYear 1: $22.5M

Year 2: $25.9M

Year 3:$28.7M

Year 4: $30.1M

SurplusYear 1: 413K

Year 2: $2.8M

Year 3: $4.6M

Year 4: $4.9M

Total: $12,766,916.44Year 1 Year 2 Year 3 Year 40

5

10

15

20

25

30

35

22.1 23.1 24.2 25.222.5

25.928.7 30.1

Max vs. Actual Max

Max Actual Max

MAX CONTRACT PLAYERS RANKED 9. RUSSELL WESTBROOK

IntroductionWhat is a

Max Contract?

Evaluating Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

Max Contract: 4 year, $113.5MYear 1: $26.5M

Year 2: $27.7M

Year 3:$28.9M

Year 4: $30.2M

Actual Max Contract: 4 year, $132.1MYear 1: $32.4M

Year 2: $34.1M

Year 3: $33.8M

Year 4: $31.7M

SurplusYear 1: $5.8M

Year 2: $6.4M

Year 3: $4.8M

Year 4: $1.46M

Total: $18, 579, 579.92Year 1 Year 2 Year 3 Year 40

510152025303540

26.5 27.7 28.9 30.232.4 34.1 33.8 31.7

Max vs. Actual Max

Max Actual Max

MAX CONTRACT PLAYERS RANKED 8. DRAYMOND GREEN

IntroductionWhat is a

Max Contract?

Evaluating Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

Max Contract: 4 year, $94.6MYear 1: $22.1M

Year 2: $23.1M

Year 3: $24.2M

Year 4: $25.2M

Actual Max Contract: 4 year, $116MYear 1: $28.1M

Year 2: $30.3M

Year 3: $29.2M

Year 4: $28.4M

SurplusYear 1: $6.03M

Year 2: $7.2M

Year 3: $5M

Year 4: $3.2M

Total: $21, 371,116.44Year 1 Year 2 Year 3 Year 40

5

10

15

20

25

30

35

22.1 23.1 24.2 25.228.1

30.3 29.2 28.4

Max vs. Actual Max

Max Actual Max

MAX CONTRACT PLAYERS RANKED 7. NIKOLA JOKIC

IntroductionWhat is a

Max Contract?

Evaluating Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

Max Contract: 4 year, $94.6MYear 1: $22.1M

Year 2: $23.1M

Year 3: $24.2M

Year 4: $25.2M

Actual Max Contract: 4 year, $123.9MYear 1: $22.2M

Year 2: $23.9M

Year 3: $37M

Year 4: $40.6M

SurplusYear 1: $123K

Year 2: $847K

Year 3: $12.8M

Year 4: $15.4M

Total: $29,269,716.44Year 1 Year 2 Year 3 Year 40

51015202530354045

22.1 23.1 24.2 25.222.2 23.9

3740.6

Max vs. Actual Max

Max Actual Max

MAX CONTRACT PLAYERS RANKED 6. JAMES HARDEN

IntroductionWhat is a

Max Contract?

Evaluating Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

Max Contract: 4 year, $113.5MYear 1: $26.5M

Year 2: $27.7M

Year 3:$28.9M

Year 4: $30.2M

Actual Max Contract: 4 year, $147.3MYear 1: $41.1M

Year 2: $36.3M

Year 3: $36.4M

Year 4: $33.4M

SurplusYear 1: $14.5M

Year 2: $8.6M

Year 3: $7.4M

Year 4: $3.2M

Total: $33,817,092.79 Year 1 Year 2 Year 3 Year 40

51015202530354045

26.5 27.7 28.9 30.2

41.136.3 36.4

33.4

Max vs. Actual Max

Max Actual Max

MAX CONTRACT PLAYERS RANKED 5. KARL-ANTHONY TOWNS

IntroductionWhat is a

Max Contract?

Evaluating Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

Max Contract: 4 year, $94.6MYear 1: $22.1M

Year 2: $23.1M

Year 3: $24.2M

Year 4: $25.2M

Actual Max Contract: 4 year, $138.1MYear 1: $27.4M

Year 2: $26.3M

Year 3: $40.6M

Year 4: $43.9M

SurplusYear 1: $5.3M

Year 2: $3.2M

Year 3: $16.4M

Year 4: $18.7M

Total: $43,579,116.44 Year 1 Year 2 Year 3 Year 40

5101520253035404550

22.1 23.1 24.2 25.227.4 26.3

40.643.9

Max vs. Actual Max

Max Actual Max

MAX CONTRACT PLAYERS RANKED 4. ANDRE DRUMMOND

IntroductionWhat is a

Max Contract?

Evaluating Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

Max Contract: 4 year, $94.6MYear 1: $22.1M

Year 2: $23.1M

Year 3: $24.2M

Year 4: $25.2M

Actual Max Contract: 4 year, $ $138.4MYear 1: $28M

Year 2: $34.9M

Year 3: $34.2M

Year 4: $41.3M

SurplusYear 1: $5.9M

Year 2: $11.8M

Year 3: $10.1M

Year 4: $16.1M

Total: $43,864,516.44 Year 1 Year 2 Year 3 Year 40

51015202530354045

22.1 23.1 24.2 25.228

34.9 34.2

41.3Max vs. Actual Max

Max Actual Max

MAX CONTRACT PLAYERS RANKED 3. STEPHEN CURRY

IntroductionWhat is a

Max Contract?

Evaluating Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

Max Contract: 4 year, $113.5MYear 1: $26.5M

Year 2: $27.7M

Year 3:$28.9M

Year 4: $30.2M

Actual Max Contract: 4 year, $167.9MYear 1: $40M

Year 2: $43.1M

Year 3: $42.6M

Year 4: $42.2M

SurplusYear 1: $13.5M

Year 2: $15.4M

Year 3: $13.6M

Year 4: $11.9M

Total: $54,356,879.72 Year 1 Year 2 Year 3 Year 40

5101520253035404550

26.5 27.7 28.9 30.2

4043.1 42.6 42.2

Max vs. Actual Max

Max Actual Max

MAX CONTRACT PLAYERS RANKED 2. KAWHI LEONARD

IntroductionWhat is a

Max Contract?

Evaluating Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

Max Contract: 4 year, $94.6MYear 1: $22.1M

Year 2: $23.1M

Year 3: $24.2M

Year 4: $25.2M

Actual Max Contract: 4 year, $155MYear 1: $34.3M

Year 2: $37.3M

Year 3: $44M

Year 4: $39.4M

SurplusYear 1: $12.2M

Year 2: $14.2M

Year 3: $19.8M

Year 4: $14.2M

Total: $60,423,416.44 Year 1 Year 2 Year 3 Year 40

5101520253035404550

22.1 23.1 24.2 25.2

34.337.3

4439.4

Max vs. Actual Max

Max Actual Max

MAX CONTRACT PLAYERS RANKED 1. ANTHONY DAVIS

IntroductionWhat is a

Max Contract?

Evaluating Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

Max Contract: 4 year, $94.6MYear 1: $22.1M

Year 2: $23.1M

Year 3: $24.2M

Year 4: $25.2M

Actual Max Contract: 4 year, 156.6MYear 1: $35M

Year 2: $36.9M

Year 3: $41.9M

Year 4: $42.6M

SurplusYear 1: $12.9M

Year 2: $13.8M

Year 3: $17.7M

Year 4: $17.4M

Total: $61,995,716.44 Year 1 Year 2 Year 3 Year 40

51015202530354045

22.1 23.1 24.2 25.2

35 36.941.9 42.6

Max vs. Actual Max

Max Actual Max

EXPANSION TEAM DRAFT RANKINGS

IntroductionWhat is a

Max Contract?

Evaluating Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

OUR FINAL RANKINGS5. KEVIN DURANT

IntroductionWhat is a

Max Contract?

Evaluating Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

Career AveragesTS%: 60.5

AST%: 17.9%

TOV%: 12.5

WS: 11.9

PER: 25

Accolades7x All-star, 6x All-NBA, 2013-14 NBA MVP, 2007-08 Rookie of the Year, 2011-12 All-Star Game MVP, 4x Scoring Champion, 2x Gold Medalist, 50-40-90 Club

OUR FINAL RANKINGS4. KARL-ANTHONY TOWNS

IntroductionWhat is a

Max Contract?

Evaluating Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

Career AveragesTS%: 59

AST%: 11.3

TOV%: 12.6

WS: 8.3

PER: 22.5

Accolades2015-16 Rookie of the Year

OUR FINAL RANKINGS3. STEPH CURRY

IntroductionWhat is a

Max Contract?

Evaluating Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

Career AveragesTS%: 61.1

AST%: 32.6%

TOV%: 12.5

WS: 10.2

PER: 23.1

Accolades3x All-star, 3x All-NBA, 2x NBA MVP, 2014-15 NBA Champion, 2015-16 Scoring Champion, 50-40-90 Club

OUR FINAL RANKINGS2. KAWHI LEONARD

IntroductionWhat is a

Max Contract?

Evaluating Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

Career AveragesTS%: 59

AST%: 10.4

TOV%: 9.2

WS: 8.3

PER: 20.1

Accolades2x Defensive Player of the Year, 1x All-star, 3x All-Defensive, 2015-16 All-NBA, 2013-14 NBA Champion, 2013-14 Finals MVP

OUR FINAL RANKINGS1. ANTHONY DAVIS

IntroductionWhat is a

Max Contract?

Evaluating Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

Career AveragesTS%: 57.2

AST%: 8.9

TOV%: 8.3

WS: 9.4

PER: 26

Accolades3x All-star, 2014-15 All-Defensive, 2014-15 All NBA, 1x Gold Medalist

IntroductionWhat is a

Max Contract?

Evaluating Players

Projecting Player

Performance

Max Contract Players Ranked

Conclusion

CONCLUSION