Caitlin Clark’s rookie WNBA contract has sparked a lot of conversation and controversy about the pay differences between men’s and women’s sports. Clark signed a four-year $338,000 contract to play for the WNBA’s Indiana Fever as the first pick in the WNBA draft. In her rookie season, she will earn $76,535. This is a pre-determined amount that was negotiated between the players union and the WNBA teams so there are no salary negotiations between Clark and the Indiana Fever.
But isn’t this unfair? NBA players make 10 times as much. Yes, because the NBA is an established league that is highly profitable. The NBA generated $10.5 billion in 2023. The league and most of its teams are profitable. (Somehow the three NBA teams managed to lose money in 2023: the LA Clippers, Brooklyn Nets, and Milwaukee Bucks).
In contrast, the WNBA’s revenue for 2023 was $200 million, which is double its 2019 earnings, but the WNBA still isn’t profitable. The league lost $12 million last year and has never made a profit since it started in 1997, losing on average $10 million each year. The NBA subsidizes its sister-league to keep it afloat. Most businesses close after three or four years of losing money, but the WNBA is still here after 26 years of not earning a profit.
The NBA owns 50% of the WNBA and each of the 12 WNBA teams combine to own the other 50%. James Dolan is the owner of Madison Square Garden, the NBA’s New York Knicks, and the NHL’s New York Rangers. He also owned the WNBA’s New York Liberty, but sold it because the Liberty lost money each year. The Knicks are valued at $6.6 billion and had an operating income of $169 million in 2023. But Dolan decided to sell the Liberty because it wasn’t profitable.
All businesses must earn a profit or they eventually cease to exist. From the neighborhood grocery store to large corporations, if a business isn’t profitable, it will close. WNBA players don’t make millions because the league doesn’t generate enough money to pay those high salaries. The public needs to regularly watch and attend WNBA games for its popularity to grow. This will bring major advertisers into the league and generate revenue.
Remember that revenue and profit are not the same thing. Revenue is money generated from a business’s primary operations. For WBNA teams, revenue includes things like selling tickets, team merchandise, and television revenue. Profit is the money left over after paying all business expenses and debts. For the WNBA, these expenses include things like salaries for the players and staff, leasing the arenas, and travel expenses.
But for now women’s professional basketball is not very popular in America. The 2023 WNBA Finals had a TV audience of only 750,000 viewers. This was for a championship game! An average Monday Night Football game has 17 million viewers. Cartoon Network’s prime-time viewership is 600,000 each night. Before getting upset with the numbers ask yourself if you regularly watch the WNBA. To be profitable, the WNBA must regularly attract more viewers than Scooby Doo and Teen Titans Go!
Many people supplement their incomes with second jobs or “side work.” Many WNBA players do the same by going to Europe to play basketball during the WNBA offseason. Star player, Diana Taurasi was paid $1.5 million to play in Russia. But those arrangements don’t always go as planned. Brittney Griner was arrested and jailed for 10 months in Russia for what many consider to be a minor legal violation when she arrived in Moscow to play for a $1 million contract. Since that experience, Griner says she will not play basketball outside America again unless it’s to play for the USA in the Olympics.
But these million-dollar European contracts are extremely rare. Only about 10 WNBA players make over $500,000 playing abroad. However, those players who play in Europe during the off-season say it helps to sharpen their game. And of course, the extra money is helpful too.
As with other popular athletes, endorsement deals allow WNBA players to earn money based on their stardom. Michael Jordan famously made almost three times his NBA salary in endorsement deals with Nike, Gatorade, and Hanes ($90 million in NBA contracts vs $2.4 billion in endorsements).
Caitlin Clark is on the same path as Jordan. She recently signed a $28 million deal with Nike and will have her own shoe. Clark also took advantage of the NCAA’s new NIL rule (Name, Image & Likeness), which allows college players to be paid to endorse products. While at Iowa, Clark made approximately $3.1 million by promoting Gatorade, State Farm, Nike, and Xfinity.
Economic inflation has become a problem in the US, but Caitlin Clark should be just fine.
How does Clark’s WNBA salary compare to the expected salaries of recent college graduates? In 2024, recent college graduates will average $58,500 for their first job. Caitlin Clark majored in marketing which earns about, $70,000 for the first year after graduation. So adding some real-world perspective, Caitlin is earning more with her WNBA salary than what she could expect from a marketing career. Keep in mind that the average individual salary in the US is $59,350, so she’s making more than that too.
For those who love sports, answer this question. If you could play your favorite sport professionally for ten years at $75,000 a year instead of working a regular job would you do it? The resounding answer is “Hell yes! Where do I sign?” A job requiring workouts, practice, and team meetings beats the daily grind of spreadsheets, board rooms and shipping deadlines every time.
With the popularity of the NBA, many people don’t realize that in the 1970s and early 1980s, the NBA Finals were shown on tape delay. That means the games weren’t on live television and fans would have to wait to watch a television replay of the championship series. Ratings were low because interest in the NBA was low compared to other sports.
But fans know a good thing when they see it. Many basketball fans followed Larry Bird and Magic Johnson into the NBA after they played against each other in the 1979 NCAA championship game. These two legends were very likable, extremely talented, and gave audiences quite a show. The popularity of Bird and Johnson lifted the NBA into must-see television. A few years later Michael Jordan entered the league and the NBA soon became as popular as the NFL and Major League baseball. It was these stars that paved the way for players like LeBron James and Stephen Curry to earn almost $50 million per season.
Women’s basketball has gained popularity in recent years. The 2024 NCAA women’s basketball tournament increased viewership by 200% compared to last year. People tuned in to watch Caitlin Clark and to see if the University of South Carolina could finish an undefeated season.
The good news for the WNBA is that attendance, television viewership, and revenues are increasing. If fans follow popular college stars such as Caitlin Clark into their WNBA careers, it will help the WNBA gain popularity which will lead to profitability and lay the groundwork for success.
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