Today I am going to look at NBA payroll and NBA performance. Over the last few years, NBA payroll has not been a very good predictor of NBA regular season performance. Let's see if that trend holds up for the last two NBA regular seasons. Thus I have grabbed data from the internet on NBA payrolls for 2013/14 regular season and the 2014/15 regular season and NBA performance and run a regression on how well relative payroll is related to regular season performance.
What I find is that over the last two NBA regular seasons is that relative payroll is positive and statistically significant, but only explains about 12.6% of regular season winning percentage.
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