The Simple Rule for WNBA Stability

Clay Kallam over at Full Court Press recently wrote an article about the WNBA and its prospects for long-term survival. He saw the WNBA as having turned the corner. To borrow a term from Malcolm Gladwell, Kallam believes that the WNBA has reached the "tipping point" that ensures its long-term survival:

"...[it is] no longer is it fashionable to just rip on the WNBA for its several flaws. Instead, there’s grudging respect (especially from any pickup player who’s actually had to try and defend a WNBA player) and an acknowledgment that women’s basketball players are, like female golfers, pretty darn good at a pretty hard game.

This shift in attitude has manifested itself somewhat in the ratings for the WNBA playoffs, which, though still setting no records, are up significantly. More important, though, is that the ratings for the league, and for women’s college basketball, have been creeping slowly and steadily upward for most of this century."

This provoked a question: how do you know when a league has turned the corner and its long-term prospects are assured? It's a difficult question, and the problem is that the question implies foregone conclusions about the future. I wondered if there was a way to answer that question.

So what does a stable league look like? If a league continually relocates its franchises, can you call it a stable league? Or do franchises have to fold to indicate a weak league?

My definition of a stable league is one where the franchises either:

a) make a profit, or
b) have losses which are stable and predictable.

If a) is the case, the teams essentially run themselves, with the exception of revenue sharing which might be used to prop up some teams. If b) is the case, the team can be used as a tax write-off and the only question becomes "what gets written off". But in either case, the team has some actual value.

When losses become unstable and unpredictable, the team ceases to have value. Some owners might keep the team alive out of civic duty or as a vanity purchase; most owners will fold.

So let's answer the question about relocation first. We'll take the case of a certain Mr. R. H. Limbaugh, former native of Missouri, who wished to purchase an NFL franchise. He was dropped from his ownership group for having a certain outspoken nature, an undesired attribute in a potential owner. (See the case of M. Cuban.)

The important thing in the news is that when Mr. Limbaugh's money was no longer wanted, there was no hand-wringing regarding if the St. Louis Rams would ever be sold - the question only remained as to who the final purchaser would be.

The Rams have value; the only question is how much and for whom. If Mr. Limbaugh wished to move the Rams, say, to Orlando that wouldn't have changed the fact of the team's value. The team might have had more or less value in Orlando, but it would have either made a profit or, most likely, yielded predictable losses which would have been compensated for in prestige.

So relocation might be confusing, but a league can be stable and relocate. To actively fold franchises, however, is another story. That means that the losses are either so great or so unpredictable that an owner can't sustain the franchise or that, worse, the league's vetting process is flawed. Worst of all is that the franchise is deemed to be valueless to the business community.

You can divide a league's history into two parts. The first part is when there's a question as to whether the league's franchises have any value. The second part is when franchises are automatically assumed to have value. Let's take a look at the three most major of the major leagues.

In 1899 - 23 years after the founding of the first lasting professional baseball league - the National League dropped four franchises: Baltimore, Washington, Cleveland, and Louisville. In 1901, a competitor league known as the American League rose to compete with the National League, and last. Since 1899 no Major League Baseball franchise has ever permanently ceased operations.

In 1952 - 32 years after the founding of the first lasting professional football league - the National Football League allowed the Dallas Texans franchise to fold. (It was the fourth home for the franchise in nine seasons.) In 1960, a competitor league known as the American Football League rose to compete with the National Football League, and after the 1969 AFL season, both leagues would merge. Since 1952 no National Football League franchise has ever permanently ceased operations.

In 1953 - a scant six years after the founding of the BAA, the predecessor league to the National Basketball Association - the NBA allowed the Indianapolis Olympians to fold. In 1968, a competitor league known as the American Basketball Association rose to compete with the National Basketball Association, and in 1977 both teams would merge. Since the merger, no National Basketball Association team has ever ceased operations.

(The above histories imply a third stage to a league: when franchises are deemed so valuable that the league faces competition, when some owners believe the league has not expanded enough.)

So what about the WNBA? The folding of the Houston Comets in 2008 - I don't remember the term the WNBA used but the euthanization of the Comets was the end result - indicates that for a great many potential owners, WNBA franchises have no value at all. If the Comets really had value, someone would have purchased them at their correct market values. (The league might have charged too much.) It's a simple rule:

If your league is to survive, franchises cannot be allowed fold or suspend operations. Period.

Look at the Arena Football League. In the final eight years of the league's existence, franchises were either folded or suspended in six of those years. The Arena Football League had been around for around two decades but the collapse of the league should have surprised no one, despite its recent successes with television contracts. See that rule in bold text, up above. The AFL violated that rule and paid for it.

The fact that the Comets folded up their tent in 2008 - and that other teams could fold up their tents in 2009 - is not a good sign of stability. I don't think I'd make any predictions on the long term survival of the WNBA until...about 2020. And if they're still folding teams in the third decade of the 21st century, don't let a long pedigree and a TV contract lead you to foolish optimism.