Free Agency

Winners spend well over the tax

The plan… is to win basketball games at whatever cost and whatever extent. It’s been noted, and I will reiterate, that the board is fully committed to doing whatever it takes to put a winning team on the floor. That includes re-signing Chris Bosh. That includes exceeding the tax limit. We did get some favourable news the other day as a league, I guess, people in my position are licensed to spend more money. -Bryan Colangelo, April 19, 2010

Well, spending your way to wins may not be news to most of you, but I thought it was interesting to review the data and see just how much you need to spend to field “50 win” teams and beyond. It comes as no surprise that winning teams are teams that spend. And the data is telling.

Here’s a simple plot of team payrolls versus wins.

The correlation is quite obvious. If we “cheat” and remove Washington, New York and New Orleans (given their highest paid players missed time for guns, selfishness and injury, respectively) the correlation jumps to 0.6319.

Top 10 teams in the league – average spend: $80.3 million
Bottom 10 – average spend: $66.1 million ($63.5 million excluding WAS, NYK & NOH)

That’s almost the equivalent of an extra max player, i.e. $16.8M (if we use the latter figure).

What does MLSE “need” to spend to reach the 50+ win plateau? $76.3 million is the average.

If we exclude OKC and POR that just made 50 wins (and have the luxury of rookie scale contracts – a result a savy drafting), that number goes to $80.2 million.

I’ve got scenarios where I can paint a picture that we’ll be a 3-million-dollar tax team. I’ve got scenarios where we’ll be a 7-million-dollar tax team. And I’ve got scenarios where we’ll be higher than that. – Bryan Colangelo

The eight teams that remain in the playoffs spent an average of $80.0 million this year. And only Atlanta spend less than $75 million.

We can conclude that we likely need to spend in Colangelo’s “higher than that” category to be a contender. I don’t want a 50 win team – I want a contender. Having said that, we are putting together a few ideas on where we may be able to “trade for value” such that we work towards that goal – but MLSE will still have to spend will above the cap.

Stay tuned and keep your homepage set on

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