Abstract: This research creates a classification-based model that predicts the salary amounts given to NBA
players in free agency. This was done through collecting player salary data through Spotrac and
player statistics through Basketball Reference. Correlation analysis demonstrated that points,
turnovers, VORP, and rebounds created a balanced and effective set of variables for unweighted
KNN-classification.
The former three statistics were standardized by year, while the latter
statistic was standardized by year and position due to underlying relationships between those
categories. After classification, the model revealed that volume statistics were most indicative of salaries within lower and mid-level players, while high VORP was common among all players making near-max to max salaries. Using test set data, the model was off by 1.21 clusters on average, but many outliers were due to gross over and undervaluation on the part of the franchises. The model was used to predict salaries for incoming free agents in the 2018 class, with reasonable projections that meet qualitative expectations. Click for the full report!