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NBA Franchises: Who Are the Smartest Spenders?

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Businessweek Magazine has put together a ranking of professional sports franchises for our analysis and enjoyment. We too have tackled this topic on occasion as well in an effort to discern which pro sports franchises spend their money the most wisely, so it is worth a look to see how Businessweek generates its list.

The Smartest Spenders in Sports | Businessweek

In order to determine how well franchises spend their money, the authors state:

"By culling player payroll data from reported sources and pairing them with wins and losses over the last five completed seasons, we calculated an average cost per win in each league. Based on that number, we measured (by standard deviation) how far each team varied above or below the league norm. The result is a cross-sport rating of how every U.S. franchise compares to its peers in squeezing wins from money. We call it the Efficiency Index."

In other words, the lower the efficiency score, the less a team spends on wins as compared to the league average.

The authors pool all sports franchises together in their ranking, so at the top of the list we find the NHL's Nashville Predators. I've extracted the top five NBA franchises out of their ranking in order to see where they fall and included the Thunder as well. Be sure to click over to their interactive ranking to get the full picture.

Team Overall Ranking # of Championships Postseason Appearances Avg. Wins/Season Avg.Cost per Win ($M) Efficiency
San Antonio Spurs 5 1 5 55.8 $1.27 -1.24
Utah Jazz 14 0 4 49.0 $1.36 -1.00
Los Angeles Lakers 15 2 5 55.6 $1.37 -0.98
Denver Nuggets 21 0 5 50.4 $1.42 -0.85
Chicago Bulls 22 0 4 45.2 $1.42 -0.83
Oklahoma City Thunder 64 0 2 35.8 $1.68 -0.16

You can see that the Thunder rank quite low in this ranking, but this is because the authors take a five year average in their calculations and it has only been within the past two years that the Thunder started seeing returns on their investment in the form of wins. Give the team another three years and I wouldn't be surprised at all to see OKC near the top of this list.