According to Chantel Jennings and Mike Vorkunov at The Athletic, the WNBA is looking to expand the league, potentially to 14 teams for the 2024 season. An announcement should come right around the WNBA Playoffs in September.
But as always with a league that actually sanctions owners for letting their teams fly on private planes, what is politically the most progressive league in America continues to be the most regressive when it comes to believing in their product. Ownership continues to worry about what might happen instead of what could happen.
Ratings and interest in women’s basketball are at an all-time high, and this is when the league should pounce instead of retreat. The niche it has somewhat-comfortably occupied since over-expanding earlier this century has been where it has survived, but nowhere close to thrived. And leaving a massively marketable and skilled talent pool unemployed and underemployed remains a huge issue.
The WNBA was owned half by the 30 NBA teams and half by 12 WNBA franchisees until a private equity deal earlier this year infused the league with $75 million at a $1 billion valuation. Press releases and reality often stand in conflict, but that would seem to indicate no single entity owns at least 50% of a team anymore.
The sale was said to be done so the league could have the capital to make investment in growth. And that’s quite normal because all businesses need capital at some point to grow. It’s why we have a stock market.
But help me out here: If 12 teams are worth ONE BILLION DOLLARS, why did the league sell off a significant portion of the business instead of just adding ownership groups? Especially since an Athletic source says “an expansion fee worth $15-20 million” is projected??
Twelve teams valued at ONE BILLION DOLLARS is an average total franchise value of $83 million. I’m no math major, but it seems getting around 46% of a new team for $15-20 million would be quite the bargain. And with plenty of smart people investing as part of the private equity round (Michael Dell, Condoleezza Rice, some “smart” NBA owners like the Heat’s Micky Arison) ... it would seem some of these people might want to own a team instead of a spreadsheet column?
From The Athletic:
In 2003, the Mohegan Tribal Gaming Authority paid $10 million as an expansion fee for the Connecticut Sun, according to an SEC filing. Two years later, Michael Alter reportedly paid $10 million for an expansion team in Chicago. In 2009, the Detroit Shock sold for approximately $5 million, based on legal documents filed by its then-owners.
The New York Liberty, Las Vegas Aces and Atlanta Dream have all been sold in recent years, but the sales prices for all three franchises are in that range. League sources said the Liberty were sold with little new money changing hands and new owner Joe Tsai financing the transaction mostly by taking on debt, as well as stipulating fresh capital for MSG Sports if the Liberty hit certain revenue thresholds. The deal occurred only after the NBA asked several league owners to step in to take over the franchise because it had languished on the market for more than 14 months, sources said. Mark Davis bought the Aces from MGM last year for a little over $2 million.
So you can buy a team in a market like Las Vegas that has shown solid support for just $2 million (plus debt absorption), but you’re going to get franchise fees in the low eight figures? And you’re not grabbing as many of those new money dollars as possible??
Instead of striking while the iron is hot as women’s sports continues to show huge upside as a broadcast property, WNBA Commissioner Cathy Engelbert is talking about adding just 1-2 teams in this cycle.
The depth of the talent pool for professional women’s basketball makes the WNBA the hardest league to stay on a roster in all of North American professional sports. There is almost no doubt you could add 6-8 teams without much, if any, loss of the on-floor product quality.
So why not go to 16 teams immediately, with a public plan to get to 20 as soon as possible? And yes, there are apparently profitable WNBA teams already so the model is there.
You can build a profitable business on women’s basketball. Teams aren’t charities or some corporate Title IX washing: They are businesses, and ones with incredible growth potential. And growth businesses scale as quickly as they can.
But tell that to the legacy league owners that are fining the New York Liberty’s Joe Tsai for not sticking the league’s brightest young star, Sabrina Ionescu, in a coach middle seat. Is that fine less if she’s placed in Comfort Plus instead of Economy? If she takes an UberBlack to the airport instead of an NYC yellow cab, at what rate does she get reimbursed?
And more importantly: Is this any way to run the best women’s basketball league in the world?
The six cities specifically named in the piece for potential expansion were Nashville, Oakland, Philadelphia, Portland, San Francisco, and Toronto. The San Francisco bid potentially brings Joe Lacob, who built the Golden State Warriors an arena in San Francisco with private dollars, and might win his fourth NBA title in two weeks. The Portland one could involve billionaire Kirk Brown, who is responsible for plenty of sales calls and emails at work you don’t want.
Wanda Sykes as a league owner in Philadelphia? If she’s got enough cash as part of her group (any team added needs to have far more than the expansion and startup costs available as you might lose money for awhile), she’d be a huge benefit to the league.
What’s the problem with adding all these folks as fast as possible? The basketball talent is available, the new dollars can be used to continue investment in the league, and more inventory for potential broadcast partners as well.
The scars of the Houston Comets and Utah Starzz and Detroit Shock of the past shouldn’t influence the thinking of what the league needs now. And that’s more teams, more investment, and more dollars.
Go big, Cathy Engelbert. Because it’s long past time for everyone to believe in what this league is selling.
The owners you work for included.