The WNBA announced a new national media deal yesterday, spanning eleven years and paying at least $200 million per season. The eleven-year term is long, but it’s within normal boundaries. It matches the length of the NFL’s current contracts and the NBA’s new ones. The $200 million figure is more than three times the WNBA’s current rate, and the games that are not yet sold could push that number up to four times or more. The contracts mark a watershed moment for a league that’s struggled to make money throughout its 28-year history. Assuming the WNBA wasn’t losing that much money, the league has finally made it.
But was it a good deal?
Women’s basketball is growing in popularity in the United States. It’s growing at the college level. It’s growing at the professional level. It’s growing so much that the WNBA just signed a TV contract which pays them more than three times as much as its predecessor. The WNBA is “on the rise,” a label recently assigned to Formula One and Soccer, and even to NASCAR about twenty years ago.
That “on the rise” label is tricky to interpret. At the moment it’s assigned, the ascent of the sport in question has come to resemble the trajectory of a rocketship. Naturally, that’s hard to sustain. A sport can continue adding large sums of fans year over year, but repeatedly tripling its previous following is a lot more to ask. Accordingly, most sports that were once “on the rise” eventually settle into a place between seventh and twentieth in the size of their American following. You hear less about F1 these days not because its following has shrunk, but because it’s leveled off. The rise is no longer a story. Coverage has accordingly returned to a more proportional share of media outlets’ followings. NASCAR? It makes a billion dollars a year from TV. The question of how many inroads it can make in the North and the West, though, is no longer relevant, and in the absence of newness, it makes few ripples in the sporting consciousness.
The meaningful question surrounding this contract, then, is where WNBA viewership will level off. Growth may continue, but persistent exponential growth is unlikely. When does the curve flatten?
In any open-market negotiation like this one, parties will agree on a price they believe will make them money. Looking at the league’s current popularity and estimating its future popularity, Disney, Amazon, and NBCUniversal (the partner broadcast umbrella companies) think $200 million is a good average annual price over the next eleven years. That unsold inventory remains—there are more games the WNBA could sell to additional partners—and this doesn’t include regional, team-specific deals. But the point is that in these negotiations, the broadcasters who win the contracts are usually the ones most bullish on the sport in question. They’re the ones willing to pay the most. Disney, Amazon, and NBC are higher on the WNBA than any other collection of broadcasters.
Why do we say the WNBA bet against itself, if all they did was accept the highest bid? It’s not the size of the deal that’s important. What’s important is the length. Unlike the NBA, which is also growing but is not tripling year over year, the WNBA is not a stable product. You can put a solid estimate on its present value, and on its value next year, but it is very hard to know where the league’s popularity might stand eleven years from now. That’s easier to guess regarding the NBA.
The WNBA could have pushed for a shorter contract, one more in line with the norm for college sports, Major League Baseball, and the NHL. It could have taken the best price it could get for six or seven years, even if that price was less than $200 million, and bet on a high enough payout come 2031 to more than make up the difference. It could have looked at the media bidders and said, “These guys are underestimating our potential.” The WNBA didn’t do that, though. Instead, the WNBA accepted a deal on the long end of normal. The WNBA locked itself in. Yes, there’s reportedly an option for renegotiation after three seasons. But that presumably comes with some sort of window within which the prices can be changed, and it presumably works against the WNBA as much as it works for it. It’s not a three-year deal. It’s an eleven-year deal. If the growth continues at this sort of pace for even a couple more seasons, the WNBA might have forfeited a whole lot of money.
Maybe there’s some convenience factor which helps this, given the WNBA is half-owned by the NBA and the broadcast partners are the same as the NBA’s new assortment. It’s hard to imagine such a factor being large enough to be a driving force, though. With the NBA set to make nearly $7 billion a year through its own new national deal, you’d think a sub-business making one or two percent as much as the NBA’s core product would be an obvious one to bet on. If it goes poorly, you’re out a few hundred million dollars. If it goes well, you might make a billion or more.
My real guess about what happened—and this is just a guess—is that the NBA didn’t drive the decision. My guess is that this came from WNBA owners, many of whom have lost money on this sport for years. Given an opportunity to secure triple their previous national TV revenue, my guess is that they were willing to forgo potential higher upside. If this is what happened, they weren’t unreasonable. If you’re investing in a lot of different things and want to maximize your total expected earnings, then yes, you should chase the upside. But if you’re emotionally attached to something and firstly want to prioritize its continued existence, that existence carries more utility for you than even potential tens of millions of dollars.
Did the WNBA bet against itself? It seems that way. Eleven years seems unnecessarily long. But like Jalen Brunson accepting a team-friendly deal, this doesn’t mean the WNBA didn’t maximize utility. It’s going to exist through 2036. It should make money over the years between now and then. Maybe some money was left on the table. Sometimes, that’s worth it.
Miscellany
- Mason Miller’s going on the IL with a broken hand. This will, of course, hurt his trade value. However! Miller is a strange combination of a one-year and a six-year asset. He’s under team control through 2029, but he’s still a relief pitcher, a position plagued by inconsistency. He’s also still something of a starting pitching prospect, but he’s an injury-plagued one at that. This definitely hurts his value in the eyes of the A’s suitors. While they’ll happily take the next five years of upside, they’re primarily looking for a good reliever this year. It also, though, might reset the A’s own expectations, reminding them how fragile an asset Miller is. Would a Miller trade haul be lesser because of his broken hand? Yes. But that doesn’t mean this makes him unlikelier to find a new home.
- I’d forgotten how close Dylan Cease came to a no-hitter in 2022. Cool to see him get one today, and fun to see him talk Mike Shildt into letting him go those last two innings.
