WPS – Will It Get Its Act Together?

It’s been pretty obvious that the WPS (Women’s Professional Soccer), the top-tier women’s soccer league in the United States, has been hanging on by its fingernails for a couple of seasons. There have been myriad franchise closures (one in the middle of a season), salary cuts, etc. While the business model is sounder than the previous WUSA, that doesn’t mean it might not meet the same fate.

Disclaimer: I don’t pretend to know the ins and outs of how the WPS is run. I just have some figures available on the internet, quotes from WPS personnel, the history of the WUSA and WNBA, and my small experience in being a part of trying to bring a WNBA franchise to my town a few years back.

The standard of comparison clearly has to be the WNBA. This is a women’s league that was started with just about every advantage you could hope for: backing/subsidizing by it’s male counterpart (the NBA), arena availability, modest salary outflow, a large talent pool, popular momentum, and a fan base large enough to tap into (average league-wide attendance per game is reported to be around 8,000–though visual estimates suggest that number is sometimes inflated). Even with all of that, the WNBA has had to sidestep a few landmines along the way as it has matured. At present, it can fairly be described as a stable sports league on the verge of thriving—if it doesn’t screw something up. It’s required changing business models (moving from only NBA ownership to increasing private ownership), corporate sponsorships, reduced rosters, commercial travel, and star players willing to play for less than they really deserve.

Enter women’s soccer. Teams have rosters double those in the WNBA. Like the WNBA, they can’t rationally pay the top stars what they deserve. They also have to travel via commercial means. The fan base is smaller (average league-wide attendance is slightly more than 3,000). The men’s pro league isn’t a direct partner in its success. Sponsorship money is less. And so forth. Just looking at that and comparing to the WNBA, you have to wonder how the league can succeed.

All roads lead to one factor: money. Can the league manage to not be a money pit for its owners?

“When W.U.S.A. was around, there was an expectation that it was going to be O.K. to lose money and owners would be willing to stick around because of the love for women’s soccer…W.P.S. is different in that we don’t believe that. I’m not in this to lose money. I’m in this to make money.”

— David Halstead, owner Philadelphia Independence¹

I think that the idea that the WPS is going to be money-making in even a handful of years of existence is naive at best. When I was doing the projections for a WNBA team, I figured you’d lose an average of $1 million a year for the first ten years before you’d see break-even. History has indicated I wasn’t too far off the mark. Sure, it’s possible to reach break-even before then, but that shouldn’t be the realistic expectation.

With soccer, there is a model available to build upon: NCAA Division I soccer. Though it’s hard to find a wealth of figures on this, it appears most programs are run for under $1 million. This includes sundries like equipment, insurance, transportation, coaching salaries, etc. Not included in that total are playing/training facilities, shared resources (e.g. trainers, accounting), and of course player salaries.

We then add the approximate salary cap the WPS has played under of $590,000 for 22 players (average of under $27,000 per player) for a 20-24 game season. This gives us a rough total of $1.6 million.

What of facilities rental? At the very high end, if you wanted to rent out Qwest field for twelve games (your half of the season at home), it would be $600,000. As the WPS isn’t playing on Qwest field, it’s fair to say that it would be considerably less than that. I have no solid idea how much renting a practice field during the week and a pro-level field for games would be, but let’s be conservative and estimate it at $300,000 per season. So our total is now up to $1.9 million just to play some ball.

If we factor in about $600,000 for marketing, we arrive at the $2.5 million budget estimate the WPS started with in 2009. A figure that, apparently, was a bit low. Still, it is reasonable to assume that, all things being equal, and with start-up costs behind you, a league can soldier on with a per-team budget of $2.5-3 million.

So, what’s gone wrong? Well, the salary cap can give you some woes. My estimate above is a little bit of an average. The 2011 cap was lower. Still, even with $590,000 as a cap, divided among 22 players, you have the complication that the minimum salaries of some players will be higher than others. To wit (unverified from 2009):

• USWNT – $47,500
• USWNT pool – $35,000
• Top international – $32,500
• International – $25,000
• Top domestic – $20,000
• Domestic – $12,875

Keep in mind that the average per-player salary is under $27,000. Some get considerably more. Top USWNT players are more in the area of $70,000 give-or-take. Marta’s compensation is estimated at $500,000+. So, clearly there are exceptions. At the low end you have players making less than $10,000 per season, with some getting just $200 a game. (Obviously the salary caps are more of a guideline than an unbreakable rule.)

So far, we’ve only talked expenses. What about revenue? Average attendance has been around 3,000. If we assume a $2.5 million budget, ticket sales alone would have to be over $69 a ticket for home games. Clearly that’s not going to happen. If we assume a family friendly $12 a ticket (average), then revenue from only tickets will amount to $36,000 a game or $432,000 a season. This will have paid more than 2/3 of players salaries. It also means that teams have to be able to fund non-ticket revenue of over $2 million a season (or $167,000 per home game).

TV revenue is important, but because women’s soccer isn’t yet “must see TV”, that means that licensing fees and ad revenue will be small. Most of the funding, therefore, will have to come from corporate sponsorships and/or the owner’s wallet. Frankly, $2 million in this day and age doesn’t seem like a lot until you’re the one trying to raise it. Year after year. Especially in a down economy. Even so, breaking it down on a per-game basis makes the job seem less daunting.

Of course the league needs to be frugal. By frugal I don’t mean “cheap” necessarily, but dollar wise. Basically, you want to get maximum worth for what you spend. Sometimes spending more is the best move if it gives you the results you’re after.

If the WPS wants to be considered a premiere league, it needs to make some significant changes. FIFA wants a top league to have a minimum of eight teams spanning at least two time zones (both requirements they waived for the WPS in 2011). In 2011 the WPS had five teams all on the east coast. Honestly, I’m amazed the league survived the season. The USWNT reaching the finals of the Women’s World Cup in such dramatic fashion helped improve the league’s fortunes. Still, no professional league can be considered really serious with only five teams. Clearly a major expansion is in order.

The WPS needs to expand to eight teams before it starts its next season. To ensure complete seasons, they need to continue the escrow account teams must pay into. I’d also like to see progressive payments through the season for the next season. This creates a buffer so if a team isn’t financially sound, the WPS has time to find new ownership for those franchises.

Obviously, costs have to be held down. Some of this can be done by sharing some resources. For example, accounting can be done league-wide instead of per-team. It might also be very important to regionalize the league. One option would be to have teams more-or-less all east of the Mississippi and then split them into North and South divisions (say, by adding teams from Chicago, St. Louis or Washington, and North Carolina). This keeps the teams compact geographically and in some traditionally well-received soccer areas. It also encourages rival fans traveling to nearby venues to cheer on their team. While this would, at least temporarily, hurt locales like L.A., Portland, the Bay Area, and Seattle, it would definitely help moderate the travel costs.

I’d strongly consider if Marta, or any other player, is worth the exceptional money. With so many in the league having to make a working-class wage, you have to wonder is Marta worth 5-10 USWNT players? I think there has to be a maximum player salary cap of $90,000. As we’ve seen in the WNBA, it’s not fair to the best of the best, but that league is on much sounder financial footing right now.

While I strongly prefer that WPS play only on soccer pitches, the fact is if a suitably-sized football stadium field is available on the cheap, that might be a good option. The downside is that all those lines make the league seem less than professional. Since there will likely only be 3,000-5,000 fans in attendance, size needn’t be a major consideration so smaller, less-expensive, soccer-specific facilities can be options.

There are often several points of contention in women’s pro sports. Of course there is the salary issue, but I don’t see that the league has a lot of wiggle room on that. Personally, I think insurance/dental is a deal-breaker. The league has to care for the players that break along the way. The WPS isn’t paying enough to shift the burden onto the players themselves (health insurance in the U.S. is expensive).

Travel is a continuing concern. As with the WNBA, trying to move a sports team in a timely way via commercial airlines—especially during playoff season when you can’t economize by reserving in advance—is less than ideal. Closely-spaced teams can travel via chartered bus or rail, but for the most part, transportation is going to be through air. If the league can regionalize, they could consider chartering a plane or two for the length of a season. It makes it easier on the players and might actually not be a huge expense compared to buying a team’s worth of tickets all the time.

Right now, the best financial move that I can see is to find the backers (owners or syndicates) willing to “bull on through” for at least three more seasons with an eight-team WPS, knowing that they’ll be losing money. The brand is finally starting to be recognized. With so many teams folding or moving, momentum is constantly being lost. Once the league seems likely to last a bit, FIFA might start giving it more due. The thing is, it’s not going to be turning a profit any time in the near future. Anyone buying into the league has to expect that. It’s a long-term investment—which might be a dirty word in this short-term business mindset—but one that will pay off in the end.

The players have committed to excellence; it’s time to see that at all the other levels as well.

¹ New York Times, “After World Cup Thrills, Players Return to Unstable Women’s League”, http://www.nytimes.com/2011/08/09/sports/soccer/unsteady-financial-footing-for-womens-soccer-league.html?pagewanted=all, August 8, 2011