Date Presented

Winter 12-1-2006

Document Type

Thesis

Degree Name

Bachelor of Arts

Department

Business Administration

First Advisor

Dan Messerschmidt

Second Advisor

Joe Prinzinger

Third Advisor

Joe Turek

Abstract

An owner of a National Basketball Association franchise needs to know whether adding to team salary will yield more wins on the court. Determining what impacts winning empowers the owner to make efficient use of limited financial resources. The following research studies the impact of team salary on NBA teams' regular season winning percentage. Running a regression using the linear functional form and ordinary least squares revealed eye-opening results. Team salary did not significantly impact a team's winning percentage. The three variables that were statistically significant were two-point and three-point defensive field goal percentage, and three-point offensive field goal percentage. Results from this study can help guide NBA owners as to how to use team salary in order to build a productive firm.

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