NBA: Identifying the best value signings of free agency

VORP (Value Over Replacement Player)

VORP gets a bit more complex, but it’s still digestible. You can find a pretty good explanation of VORP here. Essentially, VORP aims to level the playing field between players who play 40 minutes per game and players who play 10 minutes per game. Obviously, this is why some people prefer advanced stats.

A player playing 40 minutes should score more points, have more rebounds, and rack up more assists than a player only clocking 10. VORP aims to measure how much better a particular player is than a generic replacement player.

With both Win Shares and VORP, higher is better.

The basic formula we will use to evaluate across-the-board value is as follows:

(Average annual salary of signed deal / (Win Shares + VORP))

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For example, when Kevin Durant won the MVP in 2013-14, he was earning $17,832,627.00 according to Sportrac. That season, Durant’s win shares totaled 19.2 and his VORP was 8.5, thus:

($17,832,627.00 / (19.2 + 8.5)) = $643,777.00

What you now have is a monetary figure that you can estimate you are paying per win ($642,777.00). Similar to our car analogy, let’s imagine that wins are gasoline. The goal is to look around and find who is selling one gallon of gasoline for the cheapest price. Chevron’s $4.00 unleaded is the same as BP’s $2.00 unleaded, so BP has the better value.

Not all gas is created equal, though. The same can be true for NBA players. Maybe $2.69 is a lot to pay for unleaded, but you can expect diesel fuel to be at least a dollar more expensive on average.

Because of this, we have tried to simply rank players into three classes. Players with an A ranking are guys who have max-contract skills and are in their prime. Players with a B ranking are regular rotation guys. These could be role-player types who start (Courtney Lee for example), or bench rotation guys who are still essential to the team ( Shaun Livingston types). Finally, C players are everything after. These guys can certainly be skilled and only have this ranking due to their minutes and lack of impact, or they can be players who are well beyond their prime (Sorry Nick Collison).

One last-minute caveat that was added was penalizing players who had negative win shares or VORP ratings. Because of the math, a negative figure throws the whole thing off, so we had to compensate. Only two players had negative win shares, essentially stating that they would undo the work their team had done in an effort to win a game by negatively impacting the game. If Player X made $2 Million dollars per year but contributed -0.1 win shares, we would simply carry that player’s salary and add $10 Million dollars to their total for each tenth of a decimal they were negative in win shares add $1 Million for each tenth of a decimal that their VORP was negative, so:

Player X makes $2,000,000 —> Win Shares = -0.1 (adds $10M) and VORP = -0.1(adds $1M) = $13,000,000 per win.

Player Y makes $2,000,000 —> Win Shares = 2 and VORP = -0.3(adds $3M) .

You would now calculate (salary/win shares) for Player Y and disregard VORP in your calculation, simply adding the extra $3,000,000 to the final number.

Player Y = $2,000,000 / 2 = $1,000,000. Now add the $3,000,000 as penalty for negative VORP and you end up with $4,000,000 per win.

If you’ve made it this far, you are a true basketball fan, so congrats. We can now dive into the results and my full breakdown of each signing can be seen here.

All advanced stats were recorded from Basketball Reference, unless otherwise noted. There is also a great archive of who signed deals this summer thanks to r/nba.

We get an idea for how the formula evaluates contracts and results by looking at some noteworthy and infamous examples, like the extremely underpaid and effective Derrick Rose MVP season, which in itself resulted in some CBA changes to ensure that a player so good, so young, and so valuable to a team is more properly compensated. We also see the other end of that spectrum in Chandler Parsons, a player who has a maximum contract, but has been plagued by injuries and produced very little on the floor.