Prior to the start of the NBA season, we went over the Dollars Per Win (DPW) ratio for each NBA team. Now that the season has concluded, its time to revisit the ratios and rankings for the 2017-2018 season.
A refresher on the DPW ratio
I’ve discussed this in a post earlier this year, but the DPW ratio is determined by dividing the annual salary of the team by the wins for the season. As a result, teams with a low DPW signifies the franchise is paying less for each win. This is important because front offices may use this as a tool to determine if they are overpaying players for team’s performance. Well run teams generally rank the best in DPW because their payrolls are in line with the team’s performance.
The top five teams with the worse DPW ratio at the end of the season were the Grizzlies, Suns, Hawks, Magic and Kings. These teams won 22, 21, 24, 25 and 27 times this season respectively. Additionally, each team had a payroll of $110 million, $92 million, $99.9 million, $99.3 million and $99.5 million. As a result they spent $5 million, $4.4 million, $4.1 million, $3.9 million and $3.6 million for each win this year. The average DPW for these teams were $4.2 million, $1.27 more than the league average of $2.93 million.
The top five teams with the best DPW ratio at the end of the season were the Rockets, 76ers, Raptors, Pacers, and Celtics. The teams won 65, 52, 59, 48 and 55 games respectively. Their ending payrolls were $119 million, $101 million, $116 million, $95 million and $115 million. As a result their DPW calculates to $1.8 million, $1.94 million, $1.981 million, $1.984 and $2 million. The average DPW for these teams were $1.9 million, $1.03 million less than the average of $2.93 million.
What about the Cavaliers and Warriors?
The Cleveland Cavilers and Goldenstate Warriors ranked 8th and 14th respectively in the DPW rankings. The Cavilers and Warriors won 50 and 58 regular season games receptively. The Cavs end of year payroll came in at $137.7 million while the Warriors had a slightly lower payroll of $137.6 million. These teams enjoyed a DPW amount of $2.75 million and $2.37 million with an average of $2.56 million between them, $300 thousand less than the average.
Conclusion and findings
The average Dollars Per Win ratio for all NBA teams at the end of the season was $2.93 million. Thirteen teams had a DPW number over the average including the Lakers, Knicks, and Heat. Out of the remaining 17 teams who had a DPW ratio less than the average, 15 of them made the NBA playoffs. In contrast, of the 13 teams with the DPW ratios over the average, only the Miami Heat qualified for the playoffs. This supports the argument that the Dollars Per Win ratio is important in competitiveness of team, as successful franchises do not overpay for players.
The complete dataset can be found here.
Special thanks to Hoopshype.com for posting the salary numbers of teams and players.