Statistical Analysis to help with trade ideas

As a Business Accounting major at SOU I get to play with numbers and ways of manipulating them all day.  This inevitably leads to harebrained schemes to apply things I learn in class to basketball and the Trail Blazers in particular.  With that preamble out of the way here is a little homebrewed statistical analysis for you.

First off my goal here is to evaluate a player's value in terms of his salary.  You always see remarks about who is underpaid or overpaid for their production.  I decided to take a relatively fair statistic John Hollinger's PER and compare it to player's salaries by position.  UPDATE: League average PER is 15.00 averages here are caused by having all players included regardless of skill or playing time.  Because a GM needs to fill a roster not just have starters.

Disclaimer I didn't reorganize player positions so Tim Duncan is a Power Forward even if many think him more a center and so on with other players whose position is questionable.

Interestingly enough we already see that Power Forwards get paid the highest on average but actually Centers have higher average PERS.    What do these numbers mean?  With some baselines set for performance and price we can use some analysis to see where players compare to these "budgeted" amounts.  Here I am going to use a Managerial Accounting tool based around Flexible budgeting.  So the Average of PER and Salary for a position are going to be the "budgeted" amounts we will compare to "Actual" amounts aka real salaries and PERS.

We will have two variances in our final product:

• Difference between Actual Contract and What a Player should earn AKA Spending Variance
• difference between What a Player should earn and League Average AKA Efficiency Variance

So to actually get to some analysis here is Brandon Roy's breakdown

What this data tells us is that for his efficiency variance Brandon Roy should be paid 4.8 million more than the league average.  The Spending Variance is where we see that Brandon does his PER of 24.04 for far less than budgeted, it should cost 6.4 million more to be exact.   This shows us exactly what we already know that Brandon Roy is a good player who has a very low cost or good deal contract.

On the other end of the spectrum is Jermaine O'Neal who is very close to the league average in PER for Centers but has a ridiculously big contract in terms of production.

So we see that the Spending Variance on O'Neal's contract is very unfavorable at -16.5 million.  I'm not even going to bother looking at guys like Stephon Marbury who haven't played a minute this season.

What use is this analysis?  For a GM like Kevin Pritchard it can allow them to compare a player to league "budget" and see if they are under/over producing and whether they are under/over paid.   For us we can look at Spending Variance to see whether a player is performing where we want them for trade purposes. UPDATE: The best value here is as an evaluation of where a player's value is compared to League averages.  GM's might use a tool like this to come up with a starting point for a new contract negotiation.

I can do any players that you guys want but here are a few fun ones in terms of trade debate about Small Forwards.

I will try to get to any requests for further player analysis within 24 hours

UPDATE added Travis Outlaw and Vince Carter

Now the NBA being a Star based league we see that in general highly productive players are paid more for their production then the League 'budget'.  However in a time of financial crunch like right now these numbers can help you see who might cost you more then he actually gives in terms of dollars for performance.