The WNBA’s Orchard Needs More Investment To Bear Fruit In the Future

The big news in basketball is Breanna Stewart — WNBA league MVP and leader of the WNBA champion Seattle Storm — tore her Achilles tendon while playing in the EuroLeague Final Four championships.  Injuries are certainly part of sports. But one might wonder why one of the primary assets of the WNBA was participating in another basketball league.  Certainly, we are not accustomed to seeing NBA stars moonlighting in different sports leagues around the world.

Of course, anyone who follows the WNBA knows why Stewart has another job playing basketball for Dynamo Kursk of Russia.  The WNBA only pays about 20% of its revenue to its players.  This means that Stewart — despite being the league’s MVP — only makes $56,793 playing for the WNBA.  Because leagues in Europe tend to pay so much more, Stewart and other WNBA players often work for two different sports leagues.

This arrangement isn’t just bad news for the players.  It is also bad news for the WNBA.  Sports leagues definitely do better when stars focus their energy entirely on the success of that league.  Leagues also do better when their major stars don’t miss entire seasons because they got hurt playing elsewhere.

The solution to this problem seems quite obvious.  The WNBA simply needs to increase the pay to its players.  The problem, though, is that the WNBA and its NBA partner do not seem willing to take this step. As the NBA seems to tell everyone on the planet, the WNBA — according to the NBA — does not earn a profit. Therefore increasing player pay — according to the NBA — is not a good idea.

At least, that is the story the NBA tells.  Because the NBA claims current costs exceed current revenues, increasing player pay right now simply can’t happen. Perhaps, though, there is a better way for the NBA to consider the issue of player pay.

Consider for a moment apples.  Yes, apples!

Imagine you lived in Minnesota and decided you wanted to grow apples commercially.  According to the University of Minnesota, there are few things you need to know before you start an apple orchard.  One of the most important lessons they teach is about the lag between your initial investment and when you might see a return. Here is a sample of the advice they give:

“It’s going to cost a lot of money to get started. There’s really no other way to say it. Be sure you have the capital to purchase and operate an orchard before signing any agreement or sale contract. You’ll be making a large investment from the year you plant until the year that crop returns equal or exceed annual expenses. Dwarf trees may begin bearing a small crop their third year in the ground, but will not reach full productivity until the sixth or seventh year after planting. Semi-dwarf or standard trees will take longer to reach full productivity.” 

A professional sports league is very much like an orchard.  It costs quite a bit of money to get started.  And there is definitely a lag between that initial investment and the time your league will bear enough fruit to make your investment seem worthwhile. Unlike an orchard, though, the time it takes a league to be successful is not measured in years.  The history of sports leagues tells us it is better to think about this in terms of decades.

Consider the history of the NBA.  The NBA began play in the 1940s. It was not until the 1958-59 season — or more than 10 years after the league started – that attendance surpassed an average of 5,000 fans per game.  Average attendance didn’t pass the 7,500 mark — or where the WNBA was in 2017 — until the 1969-70 season. And in the early 1980s — or more than three decades after the league started — the NBA claimed it was in such financial trouble that players had to agree to a cap on salaries for the league to survive. As Jerry Buss — owner of the Los Angeles Lakers — argued at the time:

”If we had not been able to get a limitation in the salary, the league wouldn’t have been here in two or three years.”

At this time average attendance in the NBA was about 10,000 per game and gross revenues for the league was less than $200 million; or less than $500 million in today’s dollars. NBA revenue last year, though, was more than $8 billion and average attendance is now close to 18,000 per game.  In sum, the NBA today is immensely larger and more successful than it was back in the early 1980s.

How did the NBA get here? Despite decades of struggles, the NBA kept investing in its orchard.  And eventually, all that investment and all that time led to the fruits the NBA is harvesting today.

Right now the WNBA is like an orchard that was just planted.  And like an orchard that was just planted, it is not in a position to earn much in profit.  But farmers don’t give up on their orchards in the first few years because a large profit hasn’t appeared.  Farmers know the trees have to grow and develop.  And that only happens after the farmer has invested both money and time.

The WNBA and its NBA partner need to stop focusing on yearly revenues and costs and see the WNBA as something that can be much bigger with sufficient investment. The Breanna Stewart injury highlights a significant problem in the WNBA. Player salaries are too low.  As a consequence, players are spending time in other leagues.  Such time obviously exposes these players to the risk of sufficient injury.  But it also means the WNBA players are not spending as much time as they could promoting the league and expanding the league’s fan base.

The solution to all this seems quite simple.  If the WNBA and its NBA partner shared half the WNBA’s revenue with its players — as is done in the NBA — player salaries might be sufficiently large that the WNBA players would agree to play only in the WNBA. For example, I estimated that if the WNBA shared 50% of its revenues with its players and players were paid according to how many wins each player produced, Breanna Stewart would have been paid $766,885 this past season.  If Stewart was paid this amount last year she could have been persuaded to stay in Seattle after the WNBA title (and the FIBA World Championship). And if that happened, Stewart wouldn’t have torn her Achilles tendon in Europe.

The proposed increase in pay might require the WNBA to limit some of its non-player costs.  Or it might simply require an additional investment of $18 million or so (or what the Knicks paid Joakim Noah not to play for them this last season).

Such an expenditure might make the WNBA appear less profitable today. But again, I think it is best to think of a sports league like an orchard. And as the University of Minnesota said:

“It’s going to cost a lot of money to get started. There’s really no other way to say it. …You’ll be making a large investment from the year you plant until the year that crop returns equal or exceed annual expenses.”

Yes, there is no other way to say it.

Orchards don’t focus on yearly profits before their trees have matured.  The WNBA and the NBA need to pay attention and learn that lesson.

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