This document analyzes competitive balance in the NBA before and after the 2003 change to a best-of-7 format for the first round of the NBA playoffs. It defines competitive balance and reviews previous research on the topic. Regression analysis is used to examine factors that determine an NBA champion, finding offensive rebounds to be significant. The analysis finds the playoff format change did not yield more balance in the first round specifically but did improve overall playoff balance. More data and refinements are needed to better determine NBA champions.
2. OVERVIEW
• Abstract
• Definition of Competitive Balance
• Summary of Previous Research
• Questions
• Methodology
• Variables
• Regression Results
• Conclusions
• Economic Theory
3. ABSTRACT
• The NBA has always struggled with perception
of competitive balance.
• Prior to the 2003 NBA season, the league
changed the 1st round of playoffs to a new
format:
– Old Format: Best-of-5
– New Format: Best-of-7
4. COMPETITIVE BALANCE
• What is it?
• 3 different ways a league views this:
– 1) Close competition between teams each year.
– 2) Different teams make the playoffs each year.
– 3) There are different champions each season.
• Fans are most interested in games
where the home team wins
60-70% of the time.
5. BACKGROUND
• Allen R. Sanderson – “The Many Dimensions
of Competitive Balance.”
– One necessary aspect of competition is how to
produce high-quality performances.
– Enhance and constrain competition.
– Rule changes throughout the NBA’s history.
• 3-point shot.
• Interpretation of what is a foul.
• When free throws are taken.
• Number of officials.
6. BACKGROUND
• David Aldridge – “Competitive Balance? NBA
Has Always Been About Dynasties.”
– In the midst of the NBA lockout, the league’s
competitive balance was brought into
competition.
– The NBA has had a “dynasty” in every decade
since its inception, except the 1970’s.
– At the same time, other leagues have
been similar.
– How can smaller teams succeed?
8. BACKGROUND
• Neil Longley and Nelson Lacey – “The Second Season: The
Effect of Playoff Tournaments on Competitive Balance
Outcomes in the NHL and NBA.”
– Analyzes impact of post-season tournaments on regular-season
outcomes.
• Type of playoff tournament used.
– Issue of Conference “pooling.”
– Playoffs give lower seeded teams a “second chance.”
– How should team success be measured?
– Different playoff structures will provide different
levels of advantage to the best teams.
9. HHI INDEX RESULTS
NFL NHL MLB NBA
1950’s .42 .42 .34
1960’s .42 .16 .82
1970’s .26 .44 .22 .14
1980’s .26 .34 .12 .36
1990’s .18 .14 .17 .42
2000’s .18 .13 .14 .28
Competitive Balance By Decade
0.9
0.8
0.7
HHI Index Measure
0.6
NFL
0.5
NHL
0.4
MLB
0.3
NBA
0.2
0.1
0
1950'S 1960'S 1970'S 1980'S 1990'S 2000'S
10. QUESTIONS
• 1) What does the NBA define as competitive
balance?
• 2) What are the key statistics that determine
an NBA champion?
• 3) How does the change in the 1st round of
NBA Playoffs from a 5-game series
a 7-game series affect questions
1 and 2?
13. NBA CHAMPIONS SINCE 1995
Year- Team Seed Point Year- Team Seed Point Diff
Old Diff New
1995 Rockets 6 2.8 2003 Spurs 1
5.5
1996 Bulls 1 10.6 2004 Pistons 3
6.4
1997 Bulls 1 5.5 2005 Spurs 2
4.3
1998 Bulls 1 7 2006 Heat 2
3.8
1999 Spurs 1 7.2 2007 Spurs 3
4
2000 Lakers 1 2.4 2008 Celtics 1
5.2
2001 Lakers 2 12.8 2009 Lakers 1
7.2
2002 Lakers 3 3.7 2010 Lakers 1
3.8
14. METHODOLOGY
• Data:
– 1996, 1999, 2002, 2005, 2008 seasons.
– All 16 teams who were in the playoffs for each
season.
– 750 total playoff games.
• Regression Analysis:
– Regression model is used to predict
what the most important statistics in
determining an NBA Champion are.
15. VARIABLES
• Dependent Variable
– Champion (Dummy Variable)
• Independent Variables
– Games Played
– Points / Game
– Points / Allowed per Game
– Point Differential
– Offensive Rebounds
– Defensive Rebounds
– Field Goal %
– Opponent Field Goal %
– Free Throw %
– 3-Point %
16. REGRESSION RESULTS
df SS MS F Significance F
Regression 10 1.512740388 0.151274039 3.287779218 0.001572382
Residual 69 3.174759612 0.046011009
Total 79 4.6875
Regression Statistics
Multiple R 0.568082696
R Square 0.322717949
Adjusted R Square 0.22456113
Standard Error 0.214501769
Observations 80
18. CONCLUSIONS
• 1) 1st round structure did not yield more
competitive balance in that particular round.
• 2)Overall playoff competitive balance did
improve.
• 3) Improvements in data analysis to determine
an NBA Champion needs more
research and refinement.
19. ECONOMIC THEORY
• Competitive Balance.
• HHI Index.
• Moral hazard.
– “Second chance.”
• Large-Market vs. Small-Market teams.
• Role of Leagues.
20. FURTHER IMPROVEMENTS
• Analysis of 2-3-2 format.
• Apply to NHL Playoffs.
• Probit Regression.
• 5 out of 16 seasons.
– 80 observations vs. 256 observations.
• Player statistics.
21. BIBLIOGRAPHY
• Aldridge, D. (2011, October 17). Competitive Balance? NBA Has Always Been About
Dynasties. Retrieved March 28, 2012, from NBA.com Web Site:
<http://www.nba.com/2011/news/features/david_aldridge/10/17/morning-tip-
labor-update/index.html>
• Longley, N., & Lacey, N. (2011). The "Second" Season: The Effects of Playoff
Tournaments on Competitive Balance Outcomes in the NHL and NBA. Journal of
Sports Economics , 1-3, 10-12, 16, 20.
• Sanderson, A. R. (2002). The Many Dimensions of Competitive Balance. Journal of
Sports Economics, 205, 207-210, 216, 224.
• Sports Reference LLC. (2000-2012). NBA Playoffs Summary. Retrieved April 3,
2012, from Basketball-Reference.com:
<http://www.basketball-reference.com/playoffs/NBA_1996.html>
<http://www.basketball-reference.com/playoffs/NBA_1999.html>
<http://www.basketball-reference.com/playoffs/NBA_2002.html>
<http://www.basketball-reference.com/playoffs/NBA_2005.html>
<http://www.basketball-reference.com/playoffs/NBA_2008.html>