Tipping Pitches: Sports: Money Doesn't Guarantee Success in NBA, NFL

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Tuesday, November 10, 2009

Sports: Money Doesn't Guarantee Success in NBA, NFL



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As soon as I published Money Doesn't Guarantee Success, But... about the direct correlation between spending money and success in Major League Baseball, I knew there would be a follow-up.

Well, here it is.

Such an article is incomplete without doing a similar study in the other two major sports leagues, the NBA and NFL. We've already proven that there is more parity in those leagues, both financially and results based.

That said, how much does the amount of money a franchise spends in those leagues determine success?

Whereas I used data from both the past five and 10 years for baseball, I'll focus only on the five year window for the NFL and NBA. The reason for this is that I used USAToday for the baseball data and want to do the same for the other two leagues. They do not provide information back far enough for a 10 year study.

Major League Baseball
You've already seen it, but let's show the chart again...

Team
5 yr %
$ Avg
W/L Rank
$ Rank
Diff
NY Yankees
.590
$200,627,941
1
1
0
LA Angels
.586
$108,674,798
2
4
2
Boston
.577
$128,353,439
3
2
-1
Philadelphia
.552
$96,899,494
4
10
6
St. Louis
.541
$89,702,917
5
13
8
Minnesota
.533
$62,650,708
6
22
16
Chicago Sox
.529
$100,771,666
7
7
0
NY Mets
.527
$120,957,962
8
3
-5
LA Dodgers
.519
$101,788,768
9
6
-3
Cleveland
.510
$63,951,300
10
20
10
Detroit
.510
$99,931,115
10
8
-2
Chicago Cubs
.507
$106,856,519
12
5
-7
Atlanta
.507
$92,599,372
13
11
-2
Toronto
.507
$75,581,900
13
15
2
Milwaukee
.505
$65,921,933
15
18
3
Oakland
.503
$61,462,581
16
24
8
Houston
.499
$89,803,266
17
12
-5
Florida
.498
$32,911,967
18
30
12
Texas
.494
$65,657,492
19
19
0
Colorado
.492
$57,533,700
20
25
5
San Diego
.490
$61,741,871
21
23
2
Arizona
.488
$62,760,063
22
21
-1
San Francisco
.472
$85,937,185
23
14
-9
Seattle
.470
$99,749,130
24
9
-15
Cincinnati
.465
$67,876,655
25
17
-8
Tampa Bay
.463
$39,270,833
26
29
3
Baltimore
.426
$74,870,527
27
16
-11
Washington
.424
$52,872,200
28
27
-1
Pittsburgh
.409
$44,154,273
29
28
-1
Kansas City
.404
$56,011,267
30
26
-4

The measure for a success vs. money spent correlation here is having a small number of teams fall outside of the +/- nine range when comparing win/loss rank and payroll rank.

For baseball, there were five teams that fell outside of this range: Three teams found ways to succeed without spending large sums of money and two spent a lot of money without success.

Every other team fell within a reasonably expected range of success based on the amount of money they shelled out on payroll.

National Basketball Association

While there is a soft cap in the NBA, that certainly doesn't prevent some teams from spending more than others. In fact, these teams can still spend large sums of money, but face the dollar for dollar tax after a certain threshold.

Following is the chart for the NBA:

Team
5 yr %
$ Avg
W/L Rank
$ Rank
Diff
San Antonio
.707
$55,742,851
1
27
26
Dallas
.698
$80,426,300
2
2
0
Phoenix
.678
$65,738,866
3
7
4
Detroit
.656
$65,273,290
4
8
4
Cleveland
.617
$67,605,767
5
3
-2
Houston
.598
$63,833,037
6
11
5
LA Lakers
.593
$66,723,331
7
5
-2
Denver
.590
$62,561,401
8
12
4
Boston
.561
$62,442,082
9
13
4
Orlando
.544
$60,110,569
10
18
8
Utah
.537
$56,509,465
11
24
13
Miami
.520
$64,423,567
12
10
-2
Chicago
.515
$53,725,606
13
28
15
Charlotte/New Orleans Hornets
.488
$56,124,018
14
25
11
New Jersey
.488
$58,791,823
14
20
6
Philadelphia
.480
$64,611,477
16
9
-7
Indiana
.468
$66,184,370
17
6
-11
Washington
.463
$58,517,432
18
21
3
Golden State
.456
$60,801,041
19
16
-3
Sacramento
.444
$67,338,662
20
4
-16
Toronto
.441
$58,872,956
21
19
-2
Portland
.427
$57,782,460
22
23
1
LA Clippers
.405
$56,074,913
23
26
3
Vancouver/Memphis
.395
$60,208,536
24
17
-7
Seattle/Oklahoma City
.393
$60,987,577
25
15
-10
Milwaukee
.385
$58,008,366
26
22
-4
Minnesota
.378
$61,154,474
27
14
-13
Atlanta
.373
$50,360,051
28
29
1
Charlotte Bobcats
.351
$43,020,428
29
30
1
New York
.351
$91,709,481
29
1
-28

So, there were five teams that fell out of a reasonable win/loss vs. payroll disparity in baseball and nine in the NBA. Without looking at any more data, we can already make the statement that money is less likely to buy you success in the NBA than in Major League Baseball.

But let's not stop only with the nine vs. five numbers. Let's look at the "quality" of those nine vs. five.

In baseball, no team exceeded their expected range by more than 16. An example would be having the 28th highest payroll and finishing with the 12th best record (or vice versa).

In the NBA, three teams exceeded their expected range by more than 16. In fact, one of the best and one of the worst teams can be used as prime examples of how money does not directly correlate to success in the NBA.

The New York Knicks are a famous example of a team that spends exorbitant amounts of money without success. They have the highest payroll during the past five years, but with only the 28th best record to show for it.

On the other hand, the San Antonio Spurs are an example of winning without spending large sums of money. They have the league's best record during the past five years, but only the 27th highest payroll.

Also important to point out that it is the Spurs' choice to spend less, giving them payroll flexibility. They are not at a disadvantage as a result of spending less. They still have stars (Tim Duncan, Manu Ginobili, and Tony Parker) on their team. They simply spend more intelligently than the Knicks.

National Football League
If you thought the NBA was a nice example of money not guaranteeing success, you're in for a treat with the NFL. There is no correlation between payroll and success in the NFL. None.

Let's take a look:

Team
5 yr %
$ Avg
W/L Rank
$ Rank
Diff
Indianapolis
.788
$99,396,969
1
6
5
New England
.788
$97,443,207
1
13
12
Pittsburgh
.700
$98,265,425
3
9
6
San Diego
.675
$93,807,798
4
22
18
Denver
.588
$92,023,896
5
28
23
NY Giants
.588
$92,769,657
5
27
22
Philadelphia
.581
$98,581,955
7
8
1
Dallas
.575
$103,003,482
8
3
-5
Carolina
.563
$98,125,795
9
11
2
Chicago
.563
$96,428,079
9
15
6
Jacksonville
.563
$93,845,641
9
21
12
Seattle
.563
$100,922,646
9
4
-5
Baltimore
.550
$97,697,184
13
12
-1
Atlanta
.513
$93,361,478
14
23
9
Green Bay
.513
$87,071,459
14
32
18
Minnesota
.513
$105,671,155
14
2
-12
Tennessee
.500
$90,651,175
17
29
12
Cincinnati
.481
$92,982,068
18
25
7
Tampa Bay
.475
$87,394,887
19
31
12
Washington
.475
$105,956,632
19
1
-18
NY Jets
.463
$95,248,006
21
19
-2
New Orleans
.450
$100,464,296
22
5
-17
Buffalo
.438
$92,854,574
23
26
3
Arizona
.413
$96,398,273
24
16
-8
Kansas City
.400
$88,372,411
25
30
5
Houston
.388
$98,898,660
26
7
-19
Miami
.388
$93,952,520
26
20
-6
Cleveland
.350
$96,948,225
28
14
-14
St. Louis
.338
$95,400,482
29
18
-11
San Francisco
.313
$93,327,309
30
24
-6
Detroit
.263
$95,737,560
31
17
-14
Oakland
.250
$98,130,065
32
10
-22

So let's recap. In Major League Baseball, there are five teams during the past five seasons who's win/loss rank vs. payroll rank is +/-10 or greater. In the NBA, there were nine such teams.

In the NFL, there are 16 teams that fit this description. Half. Eight that exceed MLB's largest range buster of 16.

Arguably the most successful team during the past five years (or decade, for that matter), the New England Patriots have the 13th highest payroll covering the past five seasons.

The Washington Redskins spend the most. Yes, those Redskins.

The team that spends the least is the Green Bay Packers, who have the 14th best record.

In Conclusion
These results shouldn't be particularly surprising, but it's good to get confirmation. In baseball, money often wins championships. At the very least, having money provides a significant advantage, and not spending is a disadvantage.

The NBA and NFL have salary cap systems in place for the purpose of preventing such a situation. In fact, one might even say that in a hard cap scenario that spending too much money can be a major hindrance.

In these two leagues, it is the teams that best manage the cap -- not spend the most money -- that are typically most successful. It's the strategy of having the best players, the most productive players, for as long as possible while staying within their financial restrictions.

Imagine that? Strategy, sound decisions, and fiscal restraint result in success. In baseball, those who spend the most will most often win.

There is something inherently wrong with this.

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