An Analysis of the Contract Year Phenomenon in the NBA: Do Players Perform Better or Worse

The present study uses a novel measure of over performance (percent deviation from career average) to analyze the contract year phenomenon in the NBA. Historically, the literature has pointed toward over performance across almost all statistical measures of performance. However, previous research has assumed that all players are universally affected by the presence of a contract year in the same manner. The present study finds significant results that contradict previous research by dividing the sample of players into subgroups by age, career PER and position. Furthermore, the results of this paper’s statistical analysis illustrate the first examples of systematic underperformance in a contract year. More specifically, this study finds that for certain subsets of players, shooting percentage, usage percentage and field goal attempts decrease in the presence of a contract year.