Why Some Athletes Get Paid More

Evan Hayes, Aaron Tandatnick, Matthew Magnani

Washington University in St. Louis: Managerial Statistics II

Motivation Key Results Removed

Professional sports serve as a way for the average person to view
the highest caliber of athletes showcasing their staggering talents.
In a truly remarkable display of peak human performance, the
spectacle that these athletes create captures the attention and
wallets of billions of people worldwide, generating an
extraordinary amount of revenue. Spearheading and organizing
these athletic performances, The National Basketball Association
(NBA) has a widespread reach and popularity amongst fans
domestically and internationally, which contributes to its major
stream of revenue. Thus, the purpose of this research is to
determine what statistical factors influence a player’s salary. With
this study, we hope to potentially shed light on why certain players
earn their specific salaries, as well as what on-court factors have
the strongest influence on the grand total.
We developed a multiple linear regression in Excel to evaluate the
relationship between NBA players' Salaries and ten basketball statistics.
The model’s Significance Factor is 2.05E-103, lower than our
significance level of 𝛂 = 0.05–indicating that the model is statistically
significant. For each variable, the p-value (provided in Excel MLR) was
compared to the 𝛂 = 0.05. Age is the most statistically significant
variable, followed by PTS, WS, 3PT%, and BPM.
Figure 1: Age Ratio
Minutes Played, Field Goal Percentage, Turnovers, Player Efficiency
Rating, and Usage Percentage were initial variables we considered but
ultimately removed due to a lack of significance in our model or
incomplete data.
Conclusion
Our findings generate several implications for general managers of NBA
franchises. First, the residual analysis is helpful in finding undervalued
outliers. Players like Ja Morant, Desmond Bane, and Jordan Poole are all
outliers because their contracts do not reflect their statistical output.
Managers can gain a competitive advantage by identifying these players.
On the opposite end of the spectrum, our model can help managers avoid
rewarding maximum contracts to players with low statistical output, such
as Russell Westbrook and John Wall.

Initial Hypothesis
Our initial hypothesis was that players that played more would
get paid more. This is because they are putting in more time on
the court and if they were to play more, it would be more likely
they were a better player as well.
Figure 2: Three-Point %

Data Sources
We found our data on basketballreference.com. Basketball
Reference is the official statistics provider of the NBA - the data
is credible and consistent. The website contains box scores on
every NBA game since 1996, with both standard and advanced
basketball statistics. Our dataset focuses on the most recent
season, 2022-2023, with observations on 467 players.

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