Magic among smartest spenders in league?

Those who are following the Magic’s finances (or at least what is reported) know that they will be coming into some money and some cap room this year and especially in 2015 as they plan their future. Some of that will have to be spent on extensions or restricted free agency for Nikola Vucevic, Maurice Harkless and Tobias Harris.

It was not too long ago, however, that the Magic dipped deep into the luxury tax to go after a championship. They are still paying Gilbert Arenas (2014 is the final year Arenas counts toward the payroll, but the final three years of his contract were stretched out past that date) for crying out loud!

Bloomberg BuisnessWeek decided to see which teams spent the most efficiently compared to wins. Giving greater balance to Playoff wins and championships, the Magic rank ninth in the league in spending efficiency and 31st among the 120 teams that make up the NBA, MLB, NFL and NHL — calculating money spent for each win. Again, they weighted playoff wins more heavily so the Magic’s Finals run in 2009 is still skewing things somewhat.

So where do the Magic rank these past five years by this metric?

If we count Playoff wins as 10 percent of a season like Bloomberg does, these are the numbers we get (lower numbers are good):

Last 5 Years (2009-13) Last 4 Years (2010-13) Last 3 Years (2011-13) Last 2 Years (2012-13) Last Year (2013) This Year
Payroll (in millions) $397.5 $307.6 $225.5 $135.6 $66.2 $53.5
Regular Season Wins 227 168 109 57 20 23
Playoff Wins 26 13 3 1 0 0
Wins Sum 438.6 273 131.9 63.6 20 23
Cost Efficiency 0.9063 1.1267 1.7096 2.1320 3.3108 2.3261

Not sure why I got different numbers (I tried following their methodology, maybe my numbers were different).

In any case, you can see that the formula Bloomberg uses greatly values wins. On the Bloomberg Web site, you can play around with the amount of weight you put on Playoff wins and championship. Obviously, you get more “bang for your buck” when your team is winning and your team is willing to spend more. It was pretty clear as the Magic started falling, their value and efficiency went out the door.

The good new is that after clearing the decks, the Magic appear to be getting better. The wins are not rolling in, but there is increasingly less money invested. The Magic are facing some serious cap room in the coming years and a chance to restart.

Philip Rossman-Reich

About Philip Rossman-Reich

Philip Rossman-Reich is the managing editor for Crossover Chronicles and Orlando Magic Daily. You can follow him on twitter @OMagicDaily