The National Women's Soccer League is learning lessons from two previous failures to create an economically viable organization. As Maura Gladys writes, so far, so good, although it's early days.
April 17, 2013
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For the third time in less than 15 years a women's professional soccer league launched in the United States. Large doses of optimism and hope from fans, owners, coaches and players arrived alongside the National Women’s Soccer League. But success will not hinge on these factors. Instead, it depends on numbers. Economically, the NWSL has a challenge ahead of it, but at least at the outset, it appears to have all of the tools needed for sustainability.
The NWSL is aware of the history it must live up to, or rather, outlive.
On April 14, 2001, 34,148 fans watched the Bay Area Cyber Rays take on the Washington Freedom at RFK Stadium. Just three years later, after intense spending saw expenses far outweigh profits, WUSA folded. In 2009, Women’s Professional Soccer debuted, then folded three years later.
“The first league in this country had the misfortune of being organized inappropriately on false assumptions, and the second one had the misfortune of having some weak ownership groups but more importantly coming online just right in the middle of the depth of the great recession,” sports economist Andrew Zimbalist told ASN. “In this case, the operation of the labor markets and the incentives have been thought through more carefully.”
Since 2001, lessons have been learned and expectations recalibrated. The league needs to outlast the three-year mark, and NWSL is confident that it’s hit on the right formula to ensure long-term professional success.
One word: Subsidization
Google “American Soccer Economics” and the top hit is Sunil Gulati, the president of U.S. Soccer, and a driving force behind the NWSL. Gulati also doubles as an economics professor at Columbia, and his expertise heavily influenced the structure of the league. Gulati, and the rest of U.S. soccer, has a vision for how to make the league sustainable, and a major component of that vision can be boiled down to subsidization.
U.S. Soccer is funding the salaries of 23 players, with the Canadian Soccer Association paying for 16 players, and the Mexican Football Federation fronting the money for 16 players. This means that each team will not be financially responsible for about seven of its top players. U.S. Soccer will also pay for several other administrative and operational costs, like front office, marketing campaigns, and website expenses. That frees up each team to focus on paying the rest of its player’s salaries—the NWSL salary cap is $200,000, which puts player salaries in the $6,000-$30,000 range—selling tickets, and creating the best product for fans.
By reducing salary worries for its teams, U.S. Soccer hopes to simplify an already easy equation, according to Stefan Szymanski, a professor of sport management at the University of Michigan and the co-author of Soccernomics.
“It’s very simple,” he told ASN. “At the end of the day, this league is going to work if revenues at least match expenditures. Revenues are going to come from ticket sales. You’re not going to make very much from television or sponsorship, at least initially. The question is can you sell enough tickets to pay the wages… after the subsidies are being paid by the federation.”
Factors for success
Ticket sales, and in turn success, requires a balance of several factors, according to Zimbalist. “One of the things you want have is dynamic, charismatic stars, who are the face of the league and can promote the league. Another thing you want to have is good stadiums to play in. Another thing you want to have is the right distribution of cities. But all of that will come in time. It’s not something you wave a wand and it all appears. So, you try to have a strategy that’s patient, that tries to build these things gradually and I think that’s what they have right now.”
The strategy to this point has been aiming for modest. No standard individual season ticket package runs over $300, with most bleacher seats running between $10 and $20. With the exception of Portland’s Jeld-Wen stadium and Western New York’s Sahlen’s Stadium, most home stadiums are between 3,000- and 7,000-seat venues located in suburbs of their home city.
If each team can hit its economically viable groove this season, they will be on their way to establishing the most important factor to keeping a league above water: consistency.
“If the majority of clubs are able to break even and therefore can survive, and therefore you have a stable competition evolve over time, then it will succeed,” Symanski said. “If half the clubs are failing to break even so that they fold, then people are coming in, new clubs are started in other cities and someone else folds and you get inconsistent competition. If the competition is inconsistent, people lose the ability to follow what’s going on, and when they lose the ability to follow what’s going on, they lose interest.”
The NWSL’s inaugural match between the Portland Thorns and FC Kansas City drew almost 7,000 fans, and garnered 23,000 views on its live Youtube stream. The upcoming Portland vs. Seattle match, an extension of the already fierce Cascadia Rivalry, is also expected to draw a big crowd. But there is no magic number. Just one week in, it’s still too early to tell if the league is in the clear.
There has been, and there always will be, hope and belief in the future of women’s soccer. It does not lack for passion. However, it’s the numbers that will make or break the league. Just a bit above breaking even will spell success for the NWSL, and just a bit below will mean disaster. But success is not an subjective thing these days for professional women’s soccer. In 2013, success is survival.
Maura Gladys, a featured ASN columnist, works in production for KICKTV. She also runs the goalkeeping blog All You Need Is Glove.