How Player Efficiency Rating (PER) Impacts NBA Contracts

24 January 2025

The NBA is a league built on numbers. Points, rebounds, assists, steals, and blocks are all stats that fans and analysts obsess over. But when it comes to evaluating a player's overall impact on the court, there's one number that has become increasingly influential in recent years: Player Efficiency Rating (PER). Not only does PER help teams assess player performance, but it can also play a crucial role in determining how much money a player makes when signing a new contract. In this article, we’ll dive deep into how PER impacts NBA contracts, why it matters, and whether or not it's a good measurement of a player's true value.

What is Player Efficiency Rating (PER)?

Before we get into how PER affects NBA contracts, let’s get a handle on what PER actually is. Created by basketball statistician John Hollinger, PER is a formula that measures a player's overall statistical performance while adjusting for the pace of the game. In simple terms, it’s a way to calculate how effective a player is when they're on the court.

PER takes into account all the major box score stats—points, rebounds, assists, steals, blocks, turnovers, and even personal fouls. It also adjusts for the pace of the game, which is important because teams play at different speeds. A player on a fast-paced team like the Golden State Warriors might have more opportunities to score or assist than a player on a slower, more methodical team like the San Antonio Spurs. By adjusting for pace, PER levels the playing field so that players from different teams can be compared fairly.

The average PER in the NBA is set at 15.0. Players above this mark are considered to be above average, while those below it are considered below average. Superstars like LeBron James or Giannis Antetokounmpo typically post PERs in the high 20s or even 30s, which is considered elite territory.

How PER Influences NBA Contracts

Now that we know what PER is, let’s look at how it impacts NBA contracts. Simply put, players with higher PERs tend to get paid more. But why is that? Let’s break it down.

1. Teams Use PER to Quantify Value

In today’s data-driven NBA, teams rely heavily on advanced statistics like PER to evaluate players. While traditional stats like points per game or rebounds per game are still important, they don’t always tell the whole story. A player might score 20 points a game, but if they’re taking a ton of shots to get there while turning the ball over and playing poor defense, they might not be as valuable as their scoring numbers suggest.

That’s where PER comes in. By looking at a player's overall efficiency, teams can get a better sense of how much value they’re actually bringing to the court. And when it comes time to negotiate contracts, players with higher PERs can point to their efficiency as a reason why they deserve more money.

Teams are always looking for players who can produce without wasting possessions, and PER is a great way to measure that. If you’re a GM trying to sign a free agent, it’s hard to argue against a player who consistently posts a high PER.

2. It’s a Negotiating Tool for Players and Agents

Let’s say you’re an NBA player about to enter free agency. You’ve had a solid season, but your traditional stats—points, rebounds, assists—might not jump off the page. However, your PER is through the roof. You’re one of the most efficient players in the league, and that’s something you and your agent can use as leverage in contract negotiations.

In many cases, players and their agents will highlight advanced stats like PER when negotiating with teams. They’ll argue that even if a player’s raw numbers don’t look as flashy as others, their efficiency makes them just as valuable, if not more so. This can lead to bigger contracts, especially for role players who might not put up huge scoring numbers but are extremely effective in their limited minutes.

3. PER Affects Max Contracts and Supermax Deals

One of the most important ways PER impacts contracts is through the NBA’s max and supermax deals. To qualify for a supermax contract, players need to meet certain criteria, including making an All-NBA team or winning MVP. While these awards are voted on by the media, PER often plays a significant role in determining who qualifies for these honors.

Players with high PERs are more likely to make All-NBA teams, which in turn makes them eligible for supermax contracts. These deals can be worth as much as 35% of a team’s salary cap, which is a huge chunk of change. So, in a very real way, PER can help determine whether a player gets a max or supermax contract.

The Limitations of PER in Contract Negotiations

While PER is a useful tool for evaluating players, it’s not perfect. And when it comes to determining how much money a player should make, there are some limitations to relying solely on PER.

1. PER Doesn’t Measure Defense Well

One of the biggest criticisms of PER is that it doesn’t do a great job of measuring defense. While it does account for steals and blocks, it doesn’t capture things like staying in front of your man, contesting shots, or altering passes—all crucial elements of good defense.

For example, a player like Draymond Green, who is known for his defensive prowess, might not have the highest PER because his value on defense doesn’t always show up in the box score. However, his impact on the game is undeniable, and teams know that. That’s why players like Green are still able to command large contracts even if their PER isn’t off the charts.

2. It Favors High-Usage Players

Another limitation of PER is that it tends to favor high-usage players—those who have the ball in their hands a lot. This makes sense because players who are more involved in the offense will naturally accumulate more stats, which boosts their PER.

However, this can be a problem when comparing role players to superstars. A player like Stephen Curry, who takes a lot of shots and is heavily involved in the offense, will naturally have a higher PER than a role player like P.J. Tucker, whose job is to play defense and hit the occasional corner three. But that doesn’t mean Tucker isn’t valuable—he just doesn’t have the same opportunities to accumulate stats as Curry does.

3. PER Can Be Inflated by Certain Stats

Another issue with PER is that it can be inflated by certain stats. For example, players who get a lot of rebounds or shoot a high percentage from the field can have an artificially high PER, even if they’re not contributing in other areas. This can lead to situations where a player with a high PER might not actually be as valuable as their rating suggests.

Should PER Be the Deciding Factor in NBA Contracts?

So, should PER be the deciding factor when it comes to NBA contracts? The short answer is no. While PER is a useful tool for evaluating players, it’s just one piece of the puzzle. Teams need to consider a variety of factors when determining how much to pay a player, including their fit within the team's system, their leadership abilities, their injury history, and, of course, their performance in the clutch.

That being said, PER has become an important part of the conversation when it comes to NBA contracts, especially as the league continues to embrace advanced analytics. Players and agents will continue to use it as a negotiating tool, and teams will continue to use it to assess player value. But at the end of the day, no single stat can tell the full story of a player’s worth.

Conclusion

Player Efficiency Rating (PER) is a valuable tool in the world of NBA analytics, and it can have a significant impact on how much money players make. By measuring a player's overall efficiency, PER helps teams quantify a player's value and make more informed decisions when negotiating contracts.

However, PER isn’t without its flaws. It doesn’t capture everything—especially defensive impact—and it can sometimes favor high-usage players over role players. So, while PER should certainly be part of the equation when evaluating a player for a contract, it shouldn’t be the only factor teams consider.

In the end, NBA contracts are about more than just numbers—they’re about fit, potential, leadership, and, of course, winning. PER is just one of many tools teams use to make these decisions, but it’s clear that in today’s NBA, efficiency matters more than ever.