Well, it was nice to be optimistic for a few hours on Tuesday night…
The WNBA’s collective bargaining agreement negotiation felt, for a beautiful moment in time, as though we finally were nearing the breakthrough between the league’s owners and the player’s union. After six weeks of sitting on the PA’s proposal, the WNBA responded with their own proposal which included some concessions on housing for players as well as an incremental increase in potential revenue share.
Before we go any further in the column, I want to lay out the share terms because this is where things have been muddy and confusing for a lot of fans so let’s turn into the Webster dictionary real quick…
Gross Revenue: This is money that a company makes before taking out operating expenses like payroll, travel, etc.
What the WNBPA’s most recent offer is: Union President Nneka Ogwumike told Jemele Hill and Cari Champion on the Flagrant & Funny podcast that their request is for 27.5% of the gross revenue.
What the WNBA’s most recent offer is: On the same podcast, Ogwumike said that the WNBA’s most recent counter was 14.5% of gross revenue. But this is where things get a bit squirrelly. That 14.5% number seems to be a rough estimate of the WNBA’s real offer — a bigger chunk of the net revenue — rather than an admission of sharing gross revenue as a baseline.
Net Revenue: This is money that is calculated after revenue AND expenses. In the case of the WNBA, one big question is whether or not payroll for players and staff is included in those expenses before the remainder (the net) is divvied up between the league and the union.
What the WNBPA’s most recent offer is: For the most part, this has been a non-starter for the players. The battle they are fighting is solely to get a revenue share without qualifiers or stipulations.
What the WNBA’s most recent offer is: The league is offering 80% of the net revenue to players. However, the question is whether or not that includes player payroll before or after you get to divvying up the money. The biggest concern opponents to net revenue have is the idea that a multitude of things can be listed as expenses, thus lowering the net revenue and giving players less by default. This is where the “open the books“ talking point typically comes from.
So now that we have those definitions, let’s dive into the rest of this.
Let’s start here: take Caitlin Clark and Angel Reese out of this equation to start.
The reason I say that is because a popular talking point among league proponents is “why should the WNBA and their owners commit to a higher percentage based on a one time peak of interest coinciding with the novelty of two megastars entering the league?”
It’s a fair question, especially when you consider the fact that an injury can derail some of that ratings momentum.
Except when you consider that the union’s current position (27.5% gross revenue share) is effectively market rate when stacked against their closest contemporary: Major League Soccer.
The highest men’s footy league in the United States signed their collective bargaining agreement in 2021, before Lionel Messi’s arrival to the league and a TV deal with Apple TV that agreed to pay MLS $2.5 billion over the course of ten years. Amid a multitude of changes (specifically a calendar change that is completely flipping the MLS schedule), Apple and MLS will be ending their deal three years early in 2029.
So we’ve taken out the outliers in each individual sport (Caitlin Clark, Lionel Messi). So now let’s talk about the numbers for MLS in 2021 (pre-Messi, pre-CBA), and WNBA in 2023 (pre-Caitlin Clark & Angel Reese).
MLS 2021 regular season TV ratings average across all cable platforms: 285,000 average viewers (3% increase relative to 2019 pre-pandemic viewership).
2021 MLS Cup & MLS Cup playoffs TV ratings:
Single game Final rating: 1.14 million viewers (1.6 million viewers peak)
WNBA 2023 regular season TV ratings average across all cable platforms: 505,000 average viewers (8% increase over 2022 season).
2023 WNBA Finals & WNBA playoffs TV ratings:
Single game Final rating (Game 4 clinching matchup): 889,000 viewers (1.3 million viewers peak)
Playoff average: 728,000 viewers across playoffs.
Let me head off your rebuttal before it even starts. Yes, the TV landscape and how Nielsen measures these ratings changed drastically in the last five years.
Alrighty, you enterprising and inquisitive reader, let’s run this back again using the WNBA’s 2021 season numbers.
WNBA 2021 regular season TV ratings average across all cable platforms: 306,000 average viewers (24% increase relative to 2019 pre-pandemic viewership)
2021 WNBA Finals & WNBA playoffs TV ratings:
Single game Final rating (Game 5 clinching matchup): 417,000 viewers (623,000 viewers peak)
Playoff average: 367,000 viewers across playoffs.
Outside of the MLS Cup Final, which is fundamentally a different format than a finals series, the WNBA outpaced Major League Soccer on a level playing field from a star standpoint as well as a media landscape standpoint.
Now that the we’ve established that the TV ratings are in similar ballparks, let’s see how Major League Soccer responded to the demands of their players union in the 2021 CBA.
In the first two years of their agreement (2023, 2024), the MLS salary cap was dictated by a revenue share equating to 12.5% of the league’s gross revenues. Sounds pretty standard compared to the WNBA’s current proposal of 14.5% of gross revenues, right?
Here’s the rub.
From 2025-2027, that revenue share number doubled from 12.5% to 25%. As of this writing, Major League Soccer players receive a gross revenue share that is similar in nature to the most recent player proposal. In the case of the WNBA, it wouldn’t make sense to create a sliding scale of this nature because of the presence of an already signed, sealed and delivered TV deal that will pay out over $2.2 billion — potentially over $3 billion when factoring in additional side contracts — over the course of the next 11 years.
So game this out in full…
MLS had less juice from a TV ratings perspective heading into their CBA negotiation. Lionel Messi coming to the league was still a message board fever dream and several teams weren’t yet committed to building downtown soccer-specific stadiums in their markets. And yet, the league was confident enough in the potential financial windfall of a future TV deal that they felt 25% of the gross revenues of the league wouldn’t bankrupt the league.
The WNBA doesn’t have to wait on a TV deal. They have one already. While they may not have their Lionel Messi, they definitely have their Michael Jordan (from a fan interest and business impact perspective). Multiple new franchises are coming online in the next half decade, providing an additional cash injection in the form of expansion fees and that’s before we get into any other sources of revenue that can boost already soaring franchise valuations.
In short, the best analog the WNBPA has got a deal with a revenue share figure that the WNBA promptly shut down, calling it “unrealistic” in a statement last night.
I’ve always said that the magic number lies somewhere around 20% of the gross revenues. Fans might think that such a number is a capitulation and massive concession that would be better solved by a strike, but the battle here isn’t about the percentages. It’s about taking net revenue as a concept off the table for all future negotiations. I’m of the belief that the league understands this and that’s part of the root of why they’re so committed to stalling this out as long as possible. If the stipulations are removed to trigger annual revenue share negotiations instead of hiding behind “oh, turns out we made no money. Can’t show you how but no revenue share for you”.
While I haven’t enjoyed everything the Player’s Association has done, especially in the media — calling the WNBA a situationship? Are we doing social media clap backs for reality TV or are we trying to battle billionaires at a negotiating table? —, their minds clearly are in the right place. The fact that housing has been such a major secondary battle here tells me that the priorities are not just centering the top earners who would stand to gain the most in a higher revenue share scenario. Instead, they’re aiming to create tangible quality-of-life improvements for the bottom earners of their union. It’s, by definition, what a good union does.
But that hasn’t seemed to matter to the WNBA, who have returned to their regular talking points that a CBA of this nature would cost “hundreds of millions of dollars” for teams, a nebulous and vague assertion that belies every single publicly available metric from franchise valuations to game day revenue figures. As we reported last week, a source present for the Chicago Sky’s October 21st, 2024 owner’s meeting told No Cap Space that franchise owner Michael Alter happily reported that, for the first time in the team’s history, turned a net profit following Angel Reese’s rookie season.
If the team synonymous with penny pinching is telling their owners to expect revenue disbursements, do we really believe that the legitimately successful franchises in the WNBA aren’t?
So what’s next?
While I’m expecting to see a lot of stories come out about what factions and schisms exist within the WNBPA, I’m more interested in what the differing agendas are at play within the league itself. Because when you game out the math here, there isn’t any reason the WNBA should be worried about losing a boatload of money on a CBA that, on the surface, is similar in nature to one that already exists in another sports league that is doing just fine financially.
The only answer I have left is that the business model of the WNBA is the problem itself. With three different ownership factions — the NBA Board of Governors, WNBA owners and a consortium of investors that bought a 16% stake in the W in 2021 — one has to wonder if the issue isn’t that the players are asking too much, it’s that the nature of how the gross revenue is dispersed that’s the real roadblock.
We’ve long wondered about why the league is so reticent to allow a gross revenue split that would, in essence, give the union an open book look at where the money goes each year. What if it’s not a grand conspiracy to park bad assets in the W and avoid that being seen by hiding behind net revenue share, but instead so much money being disbursed to people who have no real investment in the league getting their share before the actual labor that makes this product go?
To be clear here, I don’t think the individual WNBA owners — Force10 Hoops in Seattle, Larry Gottesdiener’s group in Atlanta, the Alter Group in Chicago or the Mohegan Tribe in Connecticut, to a name a few — are the hold up. Realistically, if the NBA felt that this is a deal that should be done and those four theoretically wanted to move slower, they’d be told to kick rocks and get with the program. Force10 and Gottesdiener, to their credit, have been outspoken for years about investing in this league, their teams and their players in the way that they deserve.
So if the real hang up is people who claim a financial investment in the league but nothing else, then what is the actual fix here? The American public’s predisposition to order over chaos will inevitably lead to a lot of pieces in the coming weeks that will frame the players as uppity employees asking far too much of their benefactors, who would argue that they need to recoup their money before offering a more equitable solution. But don’t let that fool you. The issue here is the business model of the WNBA and it’s time to ask one simple question, followed by another…
If the WNBA doesn’t feel like they can make money on a TV deal that is paying out $250 million annually, where is the money going that it will doom the long term sustainability of the W?
And if the business model is that messed up, can (or should) the WNBA survive in the long term at all?
Story links & references…