WNBA's profitability put into spotlight following Clark's arrival

Indiana Fever G Caitlin Clark’s “paltry first-year salary” of $76,535 has “highlighted a hard truth that largely goes unspoken about the WNBA and many women’s sports leagues: They aren’t profitable,” according to Hirsch, Ganguli & Kessler of the N.Y. TIMES. The simplest reason the WNBA is not paying Clark more is that the league brings in just $200M annually and "relies on the NBA for some of its funding.” The NBA, by contrast, brings in about $10B. Many argue that the WNBA “simply needs more time” as the NBA “had a 50-year head start, and stars like Larry Bird, Magic Johnson and Michael Jordan helped lift it up in the 1980s and ’90s.” The question now for the WNBA is whether Clark is the "huge star coming at exactly the right time to raise interest across the sport.” The league's profitability “hinges on media rights," and its $60M annual deal is up for renewal in 2025. Several trends are "working in its favor, including a race among streamers to collect rights to live sports and a rise in legalized gambling that leaves bettors eager to expand their outlets.” This past season, the league averaged 627,000 viewers per game on ABC, its “most-viewed regular season in more than a decade.” But while more viewers “translate to more money for the league, it takes money to find new viewers.” In 2022, the WNBA raised $75M from an investor group, with that funding going into "marketing, ad campaigns, influencer marketing and live events” (N.Y. TIMES, 4/20).

INFLUENTIAL PRESENCE: In Indianapolis, Michael Hicks notes the “Caitlin Clark effect on ticket sales and likely game attendance appears to exceed that of any male superstar basketball player of the past four decades.” But the “real money, and the real benefit to the WNBA, comes from TV.” For the 2024 season, 36 out of 40 Fever games “will be televised across seven networks.” Networks broadcast sporting events because sports economists and marketers have “models telling them prime-time broadcasts will be profitable.” Televised audiences “boost NIL deals for other WNBA players and teams,” as the increase in TV spots “makes every other player more likely to pick up deals both nationally and locally.” The low WNBA pay is “primarily a result of low TV ratings,” but this season is “likely to change that calculation significantly.” Clark is “that rare athlete whose advertisements will cross over into other sports.” Fans will “get to see her on ads during MLB, NFL, NBA and most NCAA games this year," and that "boosts every WNBA player” (INDIANAPOLIS STAR, 4/22).

USEFUL OUTRAGE: In Alabama, Roy Johnson wrote the world is "losing its ever-loving mind" over Clark’s rookie contract, "sofa change" relative to the rookie contract signed by 2023 NBA No. 1 draft pick Victor Wembanyama. However, this is a "false comparison, though an easy one to make." Salaries in professional sports are "generally collectively bargained by the league and the players’ union." In the NBA and WNBA, the unions "agreed to a rookie wage scale, assuring new players prove their worth as professionals before reaching free agency." Additionally, salaries are "driven by each league’s overall annual revenue -- which is largely determined by three primary sources: television rights fees, sponsorships, ticket sales, and merchandise sales" -- and the "percentage of that revenue that is negotiated to flow to players in salary and other benefits." The outrage over the pay gap will boost the league and all its players only if it is "transferred to television ratings, attendance, and WNBA merchandise revenue, all things that will increase the league’s gross revenues" (AL.com, 4/19).