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Reasons why the WNBA should not significantly spend more money in the immediate future

When you ask many WNBA fans what they would like to see the league do, in particular starting next year when a new Collective Bargaining Agreement is expected to be in effect, they often want to see the league invest more money by paying players more and adding expansion teams. But there is a valid point made by fans who say that the league should not go in that direction, so let's examine that a little more here.

Here's Sparks owner Paula Madison reacting to a play at a game.
Here's Sparks owner Paula Madison reacting to a play at a game.

While it feels great to dream about a future time in the WNBA where players just stay on this side of the Atlantic or Pacific during the offseason, and where the season definitely feels like a legitimate basketball season, the reality is that we are not there yet.

To that end, here are some reasons why the WNBA should not just blindly spend more money, whether to increase all players' salaries, add more roster spots to every team (right now there are only 11 players per team), or invest in more front office staff members among other things:

1. Most teams are not profitable, and the WNBA is now going to its 18th season.

Generally speaking, when businesses are not profitable over the long run, they will close shop. In sports however, the owners generally have accumulated their wealth from other businesses, so if the sports team is unprofitable, that generally is not a deal breaker.

But the WNBA is not a Big Four (NFL/MLB/NBA/NHL) league, and very few teams have been profitable in any one year. It is nice to see that the Minnesota Lynx made nearly $1 million in profit for 2013, but many other franchises have never reported profits. When nearly every franchise cannot profit under the current business model, that is certainly a good reason as to why increasing spending radically may not make sense, even if most teams are trending toward profitability.

2. There appears to be a big disparity in terms of how "big" or "rich" WNBA team owners are among the ranks.

So, here is the list of WNBA teams, their ownership groups or majority owners, and other teams that those ownership groups completely own:

Team Owner Other Teams Owned
Atlanta Dream Dream Too, LLC
Chicago Sky Michael Alter
Connecticut Sun Mohegan Tribe
Indiana Fever Pacers Sports & Entertainment Indiana Pacers (NBA)
Los Angeles Sparks Williams Group Holdings, LLC
Minnesota Lynx Glen Taylor Minnesota Timberwolves (NBA)
New York Liberty Madison Square Garden New York Knicks (NBA); New York Rangers (NHL); Hartford Wolf Pack (AHL)
Phoenix Mercury Robert Sarver Phoenix Suns (NBA)
San Antonio Silver Stars Spurs Sports & Entertainment San Antonio Spurs (NBA); San Antonio Rampage (AHL); Austin Toros (NBA D League)
Seattle Storm Force 10 Hoops, LLC
Tulsa Shock Bill Cameron and David Box
Washington Mystics Monumental Sports & Entertainment Washington Capitals (NHL); Washington Wizards (NBA)

Six team owners out of 12, or half of the team owners also own an NBA team, three own more than two teams including the WNBA ones, and two teams' owners own two Big Four league franchises, which would be New York's and Washington's ownership groups.

it is probably not the best practice to alter and increase spending to a point where smaller owners cannot afford their teams

Among the six team owners who do not own an NBA team, some are known to be pretty big business players, which would include the Sun's and Sky's owners. The Mohegan Tribe, which owns the Connecticut Sun owns the Mohegan Sun Casino, which is one of the largest casinos in the United States. Then, Michael Alter, the owner of the Chicago Sky is the President of Alter Group which is one of the largest commercial real estate developers in the United States.

However, I'm not so familiar with "how rich" the remaining team owners (Atlanta, LA, Seattle, Tulsa) are after looking around on the internet, but I would think that it is a safe guess that most of them probably cannot own an NBA or an NHL team. Given that, it is not surprising if they may not be able to pay players significantly higher salaries than the status quo without getting deeper into the red if they are already losing money.

In the 2011 NBA Lockout, while the players and the owners certainly had a lot of differences, the owners also had differences among themselves, most notably between small market owners, such as Michael Jordan for the Charlotte Bobcats and large market owners such as Madison Square Garden for the New York Knicks. I know this is speculation and the WNBA keeps things tight lipped a lot more, but it shouldn't be a surprise if there is a divide between the bigger owners and the smaller ones as well given that the bigger owners, at least in theory could spend more money.

In a league where we still annually wonder if a team may fold after any season, it is probably not the best practice to alter and increase spending to a point where smaller owners cannot afford their teams just because the bigger owners may want to spend more in various ways, most notably with player salaries.

3. The WNBA does not have the amount of television contract and sponsorship money to warrant paying players more, having a longer season, and/or make other investments to the league.

Currently, the WNBA has a national television agreement with ESPN that expires in 2022, and is believed to be worth $12 million annually. To use the NBA as a comparison, it gets an estimated $930 million annually from ESPN and Turner Sports for the league's national television rights. The current deal expires in the 2015-2016 season, but the league is ready to start negotiating a new deal which will likely increase those payments into well over $1 billion annually.

Going back to the WNBA agreement, if the league is only getting $12 million a year from now until 2022, in a worst case scenario, should the league expand at some point between now and 2022, that also means that each team gets less money on average per season and that does not really help increase salaries and/or other investments in the league.

The big reason why NBA players can justify getting 50% of basketball related income and get paid handsome sums of money is because of these major television contracts. WNBA players currently cannot attract those kinds of dollars. Until the league can attract more multi-million dollar sponsorships or television contracts that are worth significantly more than $12 million a year, it is hard to justify why player salaries should go up considerably.

4. A considerable period of stability under the status quo is more important for the league than spending more money.

This is definitely a valid point. The most important thing that the WNBA can do right now, regardless of how much money it spends is to have a period of stability. In this case, stability means a period of time where there is no expansion or relocation of teams to other markets. Obviously, in a period of stability, no teams close shop.

WNBA President Laurel Richie is now entering her fourth year as the league's leader, and so far, no teams have relocated or have folded. While she has received interest from other markets, most notably Sacramento, in regards to an expansion franchise, Richie so far has stated that she is fine with the current 12 team structure. And that certainly isn't a bad thing because the longer that these 12 teams are still in business and in their current markets, that increases stability. And with a more stable league, that also will likely help increase sponsorship and television contract dollars.

Concluding Thoughts

While many WNBA fans probably do want the league to invest more money right away, and I'm no different, there is definitely good reason for the league not to increase its spending dramatically, in particular for a league that is still in a much earlier stage of growth than any of the Big Four leagues.

So, what merits do you see with the league not spending more, whether toward players' salaries, or bigger rosters, or for general team investments? Or should some power play be made financially anyway sooner rather than later? Sound off in the comments below.