|Monday, September 15
Updated: September 17, 11:07 AM ET
Still a business, not a cause
By Darren Rovell
The fact that the WUSA folded Monday after three years of financial struggle isn't hard to fathom. Trying to grasp how the organization ripped through more than $100 million in hard cash over that time frame is a bit harder for the everyday fan to digest.
When the league started in 2001, on the heels of the success of the American women winning the World Cup in their home country, investors put in an initial $40 million. This investment paid for the creation of team logos, promotional marketing and advertising costs, the negotiation of leases throughout the country and the salaries of some of the league's employees. It was supposed to be five years worth of money, but it was fully "invested" after the first season.
Although league executives have been less than forthcoming about detailing their financial losses, low attendance, lack of significant television rights revenue and major sponsorship revenue made it clear by the end of year three that there was no profitability in the league's immediate future.
Originally, the league projected that it needed 6,500 fans per game to pay the $11-per-ticket average to make things work, but that break-even number eventually rose by more than 1,000 seats per game. The league only averaged more than 8,000 fans per game in its inaugural season with this past season's average being 6,667 fans per game.
"Many people think that women's sports is a cause as much as it is entertainment," said Gary Cavalli, former commissioner of the ABL, the women's basketball league that lost approximately $30 million throughout its three-year existence in the late '90s. "That you should show up at games to support the cause as much as you should show up because you enjoy the entertainment, I don't think that's fair."
The league's most recent television deal was a two-year deal with the PAX Network reportedly worth $2 million. With about 100,000 people watching per broadcast, any hope of receiving a more financially lucrative deal from a new contract was a pipe dream.
A primary annual sponsorship target of $20 million fell $15 million short this past season.
"Due to the state of the economy, companies are looking for more a return on their investment than ever before," Cavalli said. "They're not going to invest in a sports property to shake Mia Hamm's hand and feel good about themselves. They have to justify it from a bottom line perspective."
Over their three-year existence, the league paid its players a total of more than $15 million in player salaries and it could have been more had the league's founding members -- top earners such as Mia Hamm, Julie Foudy and other players on the 1999 World Cup team -- not accepted pay cuts of at least 25 percent. Over time, most of the players that were considered the marketing cornerstone of the league, for the most part, faded into obscurity again.
"You take 10 players that become household names in their quest to win a World Cup or an Olympic gold medal and you put them in the mundane world of a league and you scatter them around the country, it doesn't work as well," said Cavalli, whose league hoped to capitalize off the success of the performance of the USA women's basketball team at the 1996 Olympic Games in Atlanta. "Having two well-known players in each region, playing regular-season games on Tuesday night, doesn't quite have the same appeal."
Travel became a significant cost. Six of the eight teams played on the East Coast, but the league's San Diego and San Jose teams made 15 and 11 cross-country trips, respectively, during the 2003 season. Then factor in hotel rooms and per diems.
Leasing large stadiums also came at a price. The Washington Freedom played in 56,000-seat RFK Stadium and the San Jose CyberRays played in 26,000-seat Spartan Stadium.
"Year Three seems to be the year that the patience of the investors runs out," Cavalli said. "Year One is like having a baby. Year Two, there's usually a bit more optimism about the long-term future. Year Three has high expectations, but if it's still tough to get in the black after Year Three, there's a lot of questioning."
The WNBA is wrapping up its seventh season, but the league is far from in the clear. But now, "We Got Next" is a whole lot better than "We Are Next."
Darren Rovell, who covers sports business for ESPN.com, can be reached at Darren.Rovell@espn3.com.