basketball, analytics, inefficiency, revenue, NBA, offense, defense, productivity
Econometrics | Finance | Sports Studies
Motivated by the popular sports saying, “Offense sells tickets, defense wins championships,” we use Forbes revenue data to quantify whether offense really does sell more ‘tickets’ than defense in the National Basketball Association (NBA). Employing team offensive and defensive win shares as measures of offensive and defensive proficiency, we find offensively oriented teams generate the same amount of revenue as do defensively oriented teams, other things equal. Our results suggest that both profit-maximizing and win-maximizing teams should value offensively and defensively players equivalently (per unit). Thus, in an efficient free agent market, we would expect equilibrium player salaries for offensive and defensive production to be statistically equal (per unit). Coupled with recent findings that NBA teams pay players significantly more for offensive production than for defensive production (Ehrlich, Sanders and Boudreaux 2019), our current results indicate the existence of disequilibrium in the NBA free agent market. In an additional test of fan preferences, we transform existing Forbes revenue data into pre-revenue sharing revenue estimates based on the NBA’s current pool plan. Econometric results based on pre-revenue sharing revenue data provide further evidence that fans do not prefer offense to defense.
Ehrlich, Justin and Potter, Joel, "Is Offense Worth More than Defense in the National Basketball Association?" (2021). Sport Management - All Scholarship. 59.
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