This is a rating system used to rank teams based on their point differential. It was originally designed for football by Doug Drinen, but has since been adapted to basketball and other sports.
The simple rating system works by first finding how many points, on average, a team wins/loses by. For each game, the point differential is then weighted based on how much better or worse than average their opponent's point differential is. If the New York Knicks typically win each game by an average of 10 points, but their opponents are 5 points worse than the average team, the Knicks are then about 5 points better than average. This statistic is typically calculated after a series of games rather than just one. This rating system produces very raw statistics and favors offensive powerhouses, but is very useful for gaining a glimpse of the quality of teams and their respective place in the league.