CHART: Going Over The Salary Cap Pays Off In The NBA

In the chart below, we take a look at whether going over the salary cap in the NBA translates to more wins.

The folks over at broke down how much each NBA team has paid in luxury tax since the 2002-03 season. Up to this point, teams had to pay $1 in luxury tax for ever $1 they went over the salary cap*. We compared those numbers to how many games each team won.

In the last five seasons, 37 of the 150 teams went over the salary cap and had to pay a luxury tax. The 113 teams that did not go over the salary cap averaged 37.5 wins**. Of the 37 teams to pay a luxury tax, only two teams won fewer than 37.5 wins (2008-09 and 2009-10 Knicks).

In the chart below, it also appears that teams win more games the more they pay in luxury tax. However, there appears to be a limit. Once teams exceed $10-15 million in luxury tax, those teams do not win more games than teams that pay less in luxury tax.

So it appears to be advantageous to overpay in the NBA. But exceeding the cap by more than $10-15 million is a waste of money…

NBA Luxury Tax

* Starting next season, the luxury tax moves to a sliding scale. The more a team goes over the salary cap, the higher the tax rate.

** 2011-12 was shortened season due to lockout. All data from this season was scaled up.

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