Contract Year Productivity
This offseason will be a busy one for Danny Ainge. Not only will he need to pray that the lottery balls fall his way in May, that he ends up with a franchise player out of the June lottery, and that Theo’s contract can be traded for a nice veteran, but Ainge will also have to worry about extending the contracts of some key Celtics players. Jefferson and West could have their contracts extended, but Ainge will probably take a wait and see approach to Allen and Telfair. Gomes will also be in the last year of his rookie contract, and the Celtics risk losing him the following summer if they don’t extend him as well. The question is less about “who to extend†and more about “how much is the player worthâ€. As much as we like the young players on the team, salary cap realities mean that the owners will not be able to keep all of them around.
Let’s focus on the issue of “how much is the player worthâ€. One logical approach to putting a value on a player is to compare the player’s performance to other players in the league and then benchmark his salary to those of similar players. One easy way to compare players is to look at statistics. The problem with using this approach is that players anticipate it, and so in their “contract year†(the final year of their old contract) players will attempt to pad their stats so that they look good in comparison to other players. Conventional wisdom holds that players are more productive in contract years and less productive in non-contract years. Is this true? In what follows I seek to test this idea.
I gathered a list of NBA players who signed new contracts during the summer of 2006. This information came from Patricia Bender’s website (http://www.eskimo.com/~pbender/index.html -- I thank fellow Celticsblog member petula for pointing me to the site). These players could either be free agents who signed a new contract (such as Ben Wallace) or players currently under contract who signed an extension (such as LeBron James). From this list I excluded players who had not played in the NBA for the last two years and players who signed minimum contracts (most of the players who signed for minimum contracts were rookies, so they would have been excluded anyway). The sample reduction left me with 48 players. I then compiled points per game (PPG) and rebounds per game (RPG) for each player for the years 2005-2006 and 2006-2007 (as of March 26, 2007). The averages are below (numbers are rounded):
| Year/Difference | PPG | RPG |
| 2005-2006 | 11.6 | 4.9 |
| 2006-2007 | 10.2 | 4.3 |
| Difference | 1.3 | 0.5 |
| % Difference | 11% | 10% |
Notice that the averages drop in both categories after the contract is signed. The differences are not statistically significant, but for the sake of argument, the numbers imply that, on average, a player plays about 10% “better†in contract years.
This analysis is obviously a very rough first cut. A more detailed analysis would cover many years so as to incorporate any trend in a player’s productivity and to incorporate contracts signed over multiple time periods. One would also want to control for the player’s position, age, total contract amount, and any other number of observable characteristics. One would also be curious about other outcomes such as assists per game, steals per game and blocks per game.
What do these numbers mean for the Celtics? Let me put on my cynical hat for a moment and assume that Jefferson and West are fully aware that they could get extensions this summer and are playing better because this is a potential contract year for them. Jefferson is currently averaging 16 and 11; the analysis above implies that if he extends his contract over the summer he could average 14 and 10 next year. West is currently averaging 12 and 3; next year he could average 10 and 2.5. I do not actually believe this will happen, but the point is that there is some evidence that players improve productivity in contract years, and so we (and more importantly the Celtics management!) want to keep this in mind when thinking about how much to pay players.
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MAJOR problem with this analysis, though you do mention other factors that must be considered…One of the principle variables that bucks the “contract year” trend is players coming off of rookie deals.
1st renewal contract players typically outperform there 3rd and 4th year stats…MLE contracts and 2nd renewal show the steapest decrease in statistical production. MLE are the most disapointing by a wide margin for a number of reason, but 2nd renewal contract players sometimes see an increase in effeciency. 2nd renewal players are often picking their teams and setting themselves up for playoff runs which improves the emphasis on continuity over pure pay-day…
Don’t expect Jefferson or West’s numbers to decrease much…even with an added offensive presence these two will be closer to their past few months numbers than their overall stats…
Great piece, Cman. I’m a huge fan of this type of analysis. Sure there are always caveats, but it’s always good to get an overview before dissecting the problem.
It would be interesting (although possibly quite labor-intensive) to focus on the Celtics. Look back over the last 5 or 10 years and see what happened to production for Celtics players in their contract year vs. the year after.
Tim Thomas is another example of a contract yr. player.
It’ll be interesting to see what the market is for Gomes. I can see him landing a 3-yr. deal somewhere for 3-4 mil per year. Anyone who wants to pay him more can have him — he’s a great 7th man.
by Lunchpail Eddie on Mar 31, 2007 4:48 PM EDT reply actions
Interesting analysis. However, a more important question that bloggers will have fun with is….Which players are keepers and which should not be resigned.
by moskqq on Mar 31, 2007 6:56 PM EDT reply actions
this analysis is disgraceful, and certainly doesn’t belong on the front page of this site. You’re outright admitting you have an awful sample size and that there’s really no statistical difference between the two, then for some reason you decide to translate it into percentages, which are the last tool of those who wish to make a gap seem larger. The idea is sound, and worth a research effort, but come on, this is total garbage.
Notice that the averages drop in both categories after the contract is signed. The differences are not statistically significant, but for the sake of argument, the numbers imply that, on average, a player plays about 10% â€Å"better†in contract years.
I mean, come on, reread that. Not only is the difference not statistically significant, you’re also defining a player’s worth by points and rebounds, of all things. It’s incredibly prone to statistical noise, doesn’t control for any potential variables, and you’re lumping together players of all ages and positions. It’s completely meaningless, and then you draw a conclusion from it?
by teddykgb on Mar 31, 2007 7:26 PM EDT reply actions
In response to teddy’s critique, I think cman did an adequate job stating the limitations of his ‘research’. I think the seriousness of the research and analysis pretty well matches the seriousness of the ‘journal’ in which it is written. Nice job, cman — I didn’t find it any more meaningless or disgraceful than anything else I see here. And somehow, I actually mean that as a compliment.
I beg to differ, teddykgb. Cman is quite upfront about both the sample size and the limitations of his analysis. It is quite possible that his results are not significant due to the small sample size of the single year of analyses (rather than the fact that there is no effect). However, it is an interesting topic of inquiry, and opens the door to further analysis (by Cman or others who are interested by the initial foray into the idea).
Thanks Eric, that’s exactly what I was wondering: Do you mean youngster’s that are signing their first non-rookie contract? That’s the operative consideration here…
by BoundingRounder on Mar 31, 2007 9:00 PM EDT reply actions
Cfan,
“Until the NBA gets rid of its guaranteed contracts…” ? …
I hope the union never gets as weak and pathetic as the NFLPA so that they sell that one down the river. Just what we need…all that extra money and power in the hands of the owners and David Stern…those who most deserve it for all their effort.
Perhaps after we get rid of guaranteed contracts we could get the NCAA to require their players to stay for four years to ensure that the impoverished association can make a little something off their so-called student athletes for whom they do so much…
Seriously, I understand the desire to better the quality of play but there are some basic issues of equity which transcend all of that…
by Rick Robey Reruns on Mar 31, 2007 10:07 PM EDT reply actions
“As much as we like the young players on the team, salary cap realities mean that the owners will not be able to keep all of them around.”
Perkins 5 years, $22 million = 4.4 million per
Al Jeff 6 years $66 million = 11 million per
West 5 years $22 million = 4.4 million per
Gomes 4 years $14 million = 3.5 million per
TA ? could be 5 years $20-25 million or down to 0
Telfair minimum
That all adds up to (including TA at $5 million per) only 25 million per year. Plus Paul’s $20 million per. Minus Theo and Wally’s $24 million per.
I don’t see the cap crunch issue.
by tallpaul on Mar 31, 2007 10:40 PM EDT reply actions
The NFL type contract is exactly what the NBA needs! Then they don’t pay a bunch of stiffs who have an out of the ordinary season without an escape clause. (Vin Baker Anyone?!) If they went to that system then there wouldn’t be this huge inability for teams to reverse fortunes. Look at the Bears. Just a few years ago they are at the bottom. Last year in the superbowl. We are stuck in mediocrity because we have to pay huge money to mediocre free agents and then when they don’t pan out then you’re screwed! (Pervis Ellison anyone?!) (Danny Fortson anyone?!) If a player had to earn his money or lose his contract then the team would be protected. If he shot someone up in a nightclub he could get cut with no questions asked. If he was a drunk bum he could get cut instead of paying 5.2 million this year still… Do you think Bird would have had any trouble with a non-guaranteed contract. Insurance can be bought to protect the player. The NFL can’t just cut an injured player so the player is also protected. They can re-negotiate a contract if the player doesn’t live up to his end, and also if he outperforms. It would separate the players from the average guys. Reward those who earn it. Don’t reward potential. That is why we are in the situation we are. Good GM’s are wrong most of the time. (ow would you like to have made the decision signing Adonal Foyle to a monster contract?!) Danny has drafted well for being in the middle most of the time. Not a great job in free agency. With the NFL system in place we could lower the contracts of those who didn’t earn it (Blount anyone?!) or cut them entirely. Then fill the holes with the money saved. Probably lower the average salary as well meaning likely a slower rise in ticket prices.
A little information is often more dangerous than none. That’s why it’s equally if not more important to look at player character, and the Celts seem to have some young guys with strong qualities in that regard. If you look at stats obviously you have to look at a whole lot more stats that correlate with team success and productivity on a per minute basis, not just per game averages.
by SteveZ from Edgemont on Apr 2, 2007 12:59 AM EDT reply actions

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