The WNBA Could Learn A Lesson About Investment From Major League Lacrosse

Discussion in 'NLL News and Rumors' started by Vin, Sep 21, 2018.

  1. Vin

    Vin Well-Known Member

    This was in Forbes yesterday and, yes, it affects us.

    https://www.forbes.com/sites/davidberri/2018/09/20/the-wnba-should-learn-about-investment-from-major-league-lacrosse

    The WNBA Could Learn A Lesson About Investment From Major League Lacrosse

    David Berri Contributor
    Sports Money


    Are players an investment or just a cost?

    Should a new league focus on long-term growth or short-term profits?

    This past week, Major League Lacrosse (MLL) offered an answer to these questions. On Monday the MLL announced a number of changes that the league says are "all designed to invest in its players." In addition to expanding the schedule of games and increasing the league roster size, the MLL is also increasing the league's salary cap. In other words, MLL players are receiving an increase in pay.

    And this increase is being called an "investment."

    For those not familiar with the league, the MLL began play in 2001. Like we generally see with new leagues, the MLL has seen teams come and go. Across its first 18 seasons, there have been 22 different cities that have hosted teams. Of the six original teams in 2001, only the Boston Cannons are still playing. And of the nine teams playing in 2018, six did not exist in 2011.





    Like the story of franchise movements, the attendance story in the MLL is also consistent with what we have generally seen in the first years of a professional sports league. From 2006 to 2018, 3.3 million people have attended an MLL game. With 701 regular season games, average attendance has been 4,660 fans per contest. And that number hasn't changed very much over time. In 2006, average attendance was 4,295 per game. After peaking at 6.417 in 2011, average attendance was only 3,619 this past summer.

    Such numbers, though, do not appear to be discouraging for the owners of the MLL. As the league announced, the owners of the MLL have unanimously agreed to invest in their league. And they made this announcement without discussing league attendance or league profits. In other words, the MLL chose to focus on the long-run growth of the league and not on the existence of short-term profits or losses.


    Let's contrast this approach to what we have seen recently from the WNBA. The WNBA just concluded what many have called the best season in its 22-year history. Despite the excitement generated by the games played this season, though, a number of players have expressed criticism with how the league is operated. Specifically, a number of stars -- including Liz Cambage, Kelsey Plum, Skyler Diggins-Smith, A'ja Wilson, Seimone Augustus, Kia Nurse, and Brittney Griner-- have argued the WNBA needs to increase the pay to its players. As noted previously at Forbes, WNBA players appear to earn less than 25% of league revenue while NBA players receive approximately 50% of NBA revenues.

    A few months ago, Adam Silver indicated that WNBA players would be paid a larger share of league revenue if they did more to grow the WNBA business. In other words, if the players want more they needed to do more.

    Silver went on to add:

    “The WNBA players are still paid significantly more than the G League players, certainly the top players, but ultimately this is not a Title IX issue, this is a business issue and we still have a number of teams losing money."

    This is not the first time Silver has noted WNBA teams are not doing as well he would like. Silver's position is also consistent with a statement a spokesperson for the WNBA recently made to Huffington Post. Specifically, a WNBA spokesperson claimed that "the WNBA has lost significant money every year." It appears that the player's call for more money is likely to lead the league to claim that salaries cannot be increased substantially because the WNBA is not profitable.

    In sum, it appears the WNBA sees player salaries as primarily a cost and the focus of the league should be on short-term profits. Unfortunately, this approach seems to threaten the long-term prospects of the league.

    Consider this anecdote from the early years of the NBA. Maurice Podoloff - the first president of the NBA -- made the following statement when the NBA was in its first few years (this appeared in David Surdam's book "The Rise of the National Basketball Association."):

    "We are getting some very bad publicity due to the fact that some of our team managers are just a bit too scrupulously honest in giving attendance figures to radios and newspapers. If you can avoid giving the figures out, do so. If however, you must announce figures, a little padding will be forgiven."

    Back in the first few years of the NBA, the league's attendance numbers were quite similar to what we see for the MLL today. But Podoloff wasn't anxious for those numbers to be known. And that might be because Podoloff understood the impact negative information about his league would have on the success of a league.

    Once again, the key word is "investment". Certainly -- as the MLL knows -- leagues need the investment of owners to survive. But leagues also need investment from fans. Although many sports fans may not wish to admit this, being a fan requires a very significant investment of time. Not only do fans spend time watching the games, fans also typically spend a great deal of time thinking and talking about their favorite teams and players.

    This is the challenge for new sports leagues. Initially, fans do not know anything about the teams in a league. Before the fan can truly enjoy the product the league is producing, the fan has to become invested. They have to learn about the teams and the players. And that will take time and a significant emotional commitment.

    But what if the league tells you that attendance is weak and its teams are losing money? This message tells fans that maybe they shouldn't waste time investing in this league because maybe this league won't exist in the future. In other words, telling people the WNBA is losing money hurts the willingness of new fans to invest in the league.

    All of this leads to a simple lesson. Instead of wondering whether or not the WNBA can pay the player more money and earn a profit, Silver and the WNBA owners would be better off taking a cue from the MLL. Paying the players is not just a cost. It is an investment.

    What are the returns to that investment? By increasing the pay of its players, the WNBA will no longer see its players spend their off-season laboring in other basketball leagues. By paying its players more money, those same players can spend their off-season marketing the WNBA and increasing the league's fan base. And by paying its players more money, the WNBA will signal to its fanbase that the league is not going anywhere.

    In the end, paying the players more money today promises a substantial return for the WNBA owners tomorrow. To realize that return, the WNBA needs to stop talking about profits and losses today and start making sure its players -- and its fans -- are fully invested in the future success of the league.





    https://www.forbes.com/sites/davidberri/
    I am a professor of economics at Southern Utah University who has spent the last two decades researching sports and economics. I am the lead author of "The Wages of Wins" (Stanford Press, 2006) and "Stumbling on Wins" (Financial Times Press, 2010). In addition, I am the sole author of "Sports Economics" (a 2018 textbook from Macmillan Publishers). I have been part of more than 50 academic papers published on the subject of sports economics; work that covers a wide variety of topics including the evaluation of players and coaches, competitive balance, the drafting of players, labor disputes, the NCAA, and gender issues in sports. In the past, I have written on the subject of sports economics for a number of popular media outlets, including the New York Times, the Atlantic.com, Time.com, and Vice Sports.
     

Share This Page