“NBA player performance peaks, on average, at age 25 which means that with the exception of rookies signing their first contract extension you’re normally talking about purchasing a depreciating asset.”
The assumption of 25 as the peak age for NBA players is something that bears closer examination. As part of a project I was working on, I had the opportunity to analyze the peak ages for NBA basketball players over time and some interesting data came to mind. As always here’s the breakdown of the data set:
- For this analysis I looked at all player drafted from 1977 that played a minimum of ten seasons at greater than >400 MP.
- I based the analysis on ADJP48 (i.e. non-position adjusted WP48 see here for an explanation)
- I standardized all players based on their Peak ADJP48. So all players are listed based on % vs their Peak Year.
- I divided players by Year Born.
Here’s the results (Table columns are Year Born, Avg.Peak Age,# of Players in data set):
Peaks for the players are skewing older over time (in fact the data is deceptive because it includes active players who may have not hit their peaks yet). Now given some of the horror stories I have read from old basketball players and their knees and hips (think Bernard King or Bill Walton) and having had arthroscopic knee surgery myself, I have to think that modern advances in medicine have something to do with this. In fact if I look at players born since 1970:
You see the most players (32 out of 178) hitting their peaks at 28. What does this mean? It means that if you’re a GM signing a guy coming off his rookie contract (say 24 or 25), You can reasonably expect equal or improved performance over the course of a 5 year contract (thereby justifying a % increase from the base Year). However if your big Free Agent signee is 29 or over? You’re probably out of luck (I’m sorry Hawks).