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Tuesday, June 11, 2013
In the NBA, payroll means playoffs

By Kristi Dosh
ESPN.com

If numbers never lie, then it seems you can buy your way into the NBA playoffs. The top 10 payrolls in the NBA all made it into this year's playoffs, with the Miami Heat and San Antonio Spurs coming in and third and 10th, respectively. These findings and more were revealed in the third annual ESPN The Magazine/SportingIntelligence Global Salary Survey, detailed more fully in conjunction with The Magazine's Money Issue, on sale June 14. The poll covered 278 teams in 14 leagues in seven sports in 14 countries.

It's not a new phenomenon for the NBA either. Last year's playoffs also featured all of the top 10 payrolls. However, this year one of the league's lowest payrolls qualified: the Houston Rockets. No other team in the bottom third of the league made the playoffs this year.

The NBA is the only of the big four professional sports leagues in the United States to see all of its top 10 payrolls make the playoffs. In the NFL, just three of the top 10 payrolls made the playoffs this past season: the San Francisco 49ers, Green Bay Packers and Denver Broncos. It's important to note that only 12 teams make the NFL playoffs, as compared to 16 in the NBA.

The NHL, like the NBA, features 16 teams in the postseason, making it more direct comparison. Seven of the top 10 payrolls this season made the playoffs. The league-leading Philadelphia Flyers, however, did not. In addition, all three of the bottom payrolls played extra hockey: the New York Islanders, St. Louis Blues and Ottawa Senators.

In fact, the NHL has the least disparity in US professional sports when it comes to the gap between the league's biggest and lowest spenders -- at a ratio of 1.51:1. The NFL follows closely at 1.57:1, while the NBA sits at 2.3:1.

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Major League Baseball has the largest ratio at 9.14:1, the fourth highest in the world behind three European football (soccer) leagues. Yet, not all of the largest payrolls in MLB made last year's playoffs. Only 10 teams compete in the MLB playoffs, but regardless quite a few of the top payrolls watched from home in October. The Philadelphia Phillies, who were second behind the New York Yankees, missed the cut. The Boston Red Sox and Los Angeles Angels, ranked third and fourth, respectively, also missed the playoffs.

The NFL and NHL both have hard salary caps and floors, predictably making their ratios low, while MLB and NBA rules allow for a much broader range of salaries. But why is the NBA the only league where the top payrolls tend to make the playoffs?

Larry Coon, an NBA salary cap expert, hypothesizes it could be because there are fewer players on the floor at once, meaning the abilities of one player can have a bigger impact. He also believes the talent curve is distributed differently in basketball, allowing star players to have a greater impact on the game. However, he notes, a quarterback or star pitcher might have a similar effect.

In addition, the luxury tax in the NBA compounds the high salaries by tacking on additional costs. His calculations for this season have six of the top 10 teams paying the luxury tax, with the Los Angeles Lakers at a high of approximately $29 million and the Heat following at $13 million.

NBA teams will have to spend even more to keep their stars in the future. In the past, including this season, teams have paid $1 for every $1 a team's payroll is above the luxury tax threshold. Beginning next season, tax rates will begin at $1.50 and will increase with each $5 million a team is above the threshold. Repeat offenders -- defined as teams who have paid the luxury tax in at least four of the previous five seasons -- will pay even more, with an additional $1 for each $5 million increment.