This study investigates a superstar’s affect on the value of different NBA teams. Two team’s values were examined over the course of ten years and then used to explore the statistical value of that player on each franchise. Recent literature has examined the impact of star power on NBA gate revenues and the effect NBA player’s have on policy and our economy but none has explored LeBron James’ significance to the two teams he has played for. The evidence presented suggests LeBron’s star power is more valuable to Cleveland. Additional empirical results are reported in the text.
Statistics and performance metrics of the NBA afford analysis of draft position value. This paper compares college performance metrics to NBA productivity over a three year period. This paper also compares draft position to NBA productivity over a three year period. It considers how predictive draft position is of professional play, and whether the Collective Bargaining Agreement (CBA) prescribed salaries for the first round draft picks is efficiently distributed. The results did show a correlation between draft pick order and NBA productivity (less productivity as draft number increased), but it was not as strong as the correlation between college performance and NBA productivity. And, the decrease in CBA salary (from draft position 1 to 30) was steeper than the decrease in NBA productivity (from draft position 1 to 30) on average. As found in other sports leagues, namely the NFL, there is a tendency to overvalue the earliest draft picks of the first round. Results suggest that the draft picks in the middle and end of the first round are a better bargain than the early picks. This study suggests that the current CBA pay structure basing rookies’ pay on draft position might be improved and more efficient using other metrics.
The results showed that teams that project themselves to have a winning record should breach the tax threshold. However, these franchises should not pay beyond one standard deviation of the average tax figure in a given year. Teams that project themselves to have a losing record should stay under the threshold. This is surprising as many franchises, particularly those in small markets, often go to drastic lengths to stay below the tax to the detriment of on and off-court performance. Over the period studied, an average of 6 teams paid the tax. The model found that regardless of market size around 15 teams per year would increase franchise net worth by having payrolls above the tax.
This study looks to explore ‘superstar’ influences within the National Basketball Association. ‘Superstars’ are players awarded accolades by sportscasters and sport writers through their exceptional play. Through looking at variables integral to determining the outcome of basketball games, the addition of ‘superstar’ variables should explain the exact influence that recognized players have. I apply a lag to the ‘superstar’ influences on account of player’s reputations for success before they are awarded, controlling for a constant value.