Saturday's launch of the National Women's Soccer League (NWSL) brings one question to the lips of many: Will the third version of a women's professional soccer league be the charm?
Without doing a lengthy primer on the history of professional women's soccer in the United States (I'd need wine for that), I thought we could start with this simple question:
How can this league survive while the past two have failed?
While Title IX has greatly increased the opportunities for girls to play sports, it does not apply to professional sports (because professional sports are not subsidized by the federal government). Yet this is the statement I often hear: Women deserve pro leagues. Don't kill the messenger, but I must be the bearer of a sharp dose of reality. Professional sports, for men and women, are not about who deserves them or who has earned the right to play professionally; professional sports leagues are governed by one simple principle -- what the market will bear. (Well, and maybe this principle: Get an uber-rich owner who doesn't care what the market bears. Unfortunately, women's sports leagues are short on oil oligarchs, so back to capitalism and market economics.)
Women's sports leagues would be much better served if supporters stopped giving the "cause argument" ("Support us because you should. Sponsor us because you should. Spend money on us because you should") and started giving the "because argument" ("Support us because we have the best players in the world. Support us because you like what you see. Support us because there is a business plan that will work).
Mind you, the "cause argument" chorus is getting much quieter, and the reasons for that become evident with each new iteration of a women's pro league. You don't need to be a CFO to understand that, regardless of owner intention, if revenue doesn't match up to expenses, owners typically have three options:
• 1. Eat the losses and stay in it because they can, or stay in and attempt to regroup for a brighter day. The regrouping leads to ...
• 2. Change the model so expenses are more in line with revenue. As we have seen in women's soccer, this is easier said than done. Escalating losses can quickly lead to ...
• 3. Close shop.
The first two professional women's soccer leagues failed at option No. 2, the expenses-to-revenue balance. In the Women's United Soccer Association (WUSA), the first women's pro league launched in 2001 in which I played for the San Diego Spirit, we tried to change the model one year in and get expenses in line, but it's hard to climb out of debt when you have already burrowed yourself into a financial abyss (the WUSA spent somewhere between $50 and $100 million). The league lasted only three seasons, even with the U.S. women's national team riding high after the 1999 Women's World Cup and passionate players who were determined to not let it fail. (Cue the cold sweats, as they still come.)
The second league, Women's Professional Soccer, tried to change the WUSA model and keep expenses more palatable, but failed to close the all-important loophole of "off cap" salaries and perks from the beginning. In a start-up women's league, with limited owner appetite for loss, if you have soft "off cap" limits, you might as well have changed the WPS to SOS on opening day. To be fair, it isn't really a question of limited appetites for loss, but rather good business. Look at what is happening in European soccer with its attempt to rein in ballooning expenses, even with owners who make Jerry Jones look like the kid from across the railroad tracks and commercial revenue in European top-tier soccer leagues at an all-time high. They call it Financial Fair Play. For women's soccer to exist, one could argue it isn't about being fair, but about good ol' Darwinism: To survive, one must adapt.
"This league has to make economic sense for owners to stay in it for the long term. There is no model of a stand-alone, fully professional women's team sports league anywhere in the world," U.S. Soccer president Sunil Gulati, the catalyst behind getting this third pro league off the ground, told me by phone last week. "We are trying to do something that is not easy, and we know that. Which is why it is not completely stand-alone; you have the federations' -- plural -- support, and we are trying to develop a cost model that makes sense."
And therein lies the difference in this latest pro league: the U.S. Soccer Federation. The NWSL, thanks to the leadership and support of the USSF, implemented two huge changes on the expense side of the expense-to-revenue equation. The NWSL has the American, Canadian and Mexican federations now taking the most expensive players off the league's balance sheet. These federations are paying for their respective national team players, not the league. That is a sizable chunk when you are talking about seven players, more than a third of your roster.
And U.S. Soccer is fully funding the front office: from front-office staff (i.e., NWSL executive director Cheryl Bailey) to legal matters (WPS knows all too well how expensive that can get) to office space, websites, finance, referees, PR and operations, the list goes on. And when building this business plan, U.S. Soccer knew it had to keep expenses down and imposed tighter spending restrictions across the board.
Arnim Whisler, owner of the Chicago Red Stars for the previous WPS and current NWSL, explained the difference.
"Budgets in WPS ended up, whether they were intended or not, at or around a $3 million annual spend. Our budgets in NWSL are less than one-third of the WPS," Whisler said. "Everyone, I believe, is set at about a million. It has been scaled down dramatically. While scaled down, we want women's soccer to succeed, but the reality is, revenues in WPS were about a million a year, some closer to $2 million. If you're going to build a sustainable league, you have to size your business to sustainable revenue."
Portland Thorns FC owner Merritt Paulson agreed. "The reason I joined this league is the model has fundamental changes from the prior two iterations," he said.
So you get the economics at work, but there is still the dilemma every business faces: Can you keep that bottom line in check and not sacrifice quality? The expenses that have been scaled down for the NWSL include player salaries, facilities (smaller, less-expensive stadiums), staffing and marketing.
Let's start with player salaries. The salary cap for the 13 non-national team players on the 20-player rosters has reportedly been set at $200,000, which works out to an average salary of $15,000 per player (or a range of "$6,000-$30,000, as announced by the NWSL on Thursday). So the logical next question is, can the NWSL survive on those salaries for the bulk of the team? Meaning, will the best players want to play for that amount and be able to live on that salary?
The answer, in the short term, is yes.
Former national team players and WPS veterans like Lori Chalupny and Leslie Osborne have agreed to play in the NWSL."I have picked the younger girls' brains about it, as it is interesting for me to understand how they are handling the lower income," Osborne, a WPS star from the Boston Breakers and now with the Red Stars, told espnW. "They want to play as this is their dream, and the money is not as important as doing what they love. For me, too, I am playing because I love it."
Some of the younger players are living with host families or taking on another job to supplement their income to make it work. For players like Osborne, personal sponsors also help keep the dream alive. Another attractive feature is the players have reportedly all been given health benefits.
Washington Spirit midfielder Lori Lindsey, who has also been a U.S. national team member, thinks the league is attracting most of the top-level American players.
"The salaries are lower, obviously, but the players understand that is how we must start if we want this league to be sustainable," said Lindsey, who also played in the previous two pro leagues. "That is why we see a larger influx of college kids right out of school, which we didn't see in prior leagues. There were a lot more international players before. These college players are willing to play for less salary, and I think this could be a positive thing because it will give some younger players the opportunity to see if they can make it at this level."
Some may argue that fewer quality international players could create a weaker product on the field. The NWSL certainly cannot afford to go back to the days of paying a player like Marta, the four-time FIFA World Player of the Year from Brazil, six-figure salaries, but can it afford to lose out on other top-tier international players?
I don't think fan retention is based on which German or Brazilian is playing here in the United States, but quality matters when attracting fans. Germany, Sweden, Japan, England and France have made big strides in supporting their women's soccer leagues and are putting pressure on their own national team players to play at home (most notably Germany). The financial offers to woo American players abroad have also become more alluring.
Yes, the global market for women's pro players has become much more competitive in the past few years, which presents a potential challenge for the NWSL and U.S. Soccer. If the new league isn't attracting the best global talent, is it creating the best training environment for U.S. national team players? How much does it matter? Ultimately, is the purpose of the league to help the U.S. national team win more World Cups and Olympic gold medals? Or develop a broader pool of players? Ideally, most would say both. The two questions are not mutually exclusive, but if you look at the history of the U.S. women's national team, they are not always connected, either.
This is a new business, there are going to be hiccups. We must set expectations that are realistic ... it may take a little while to evolve into something even more special. The NWSL broadens and deepens our player pool ... it makes it way more competitive.” -- Abby Wambach
The USWNT never won a World Cup or Olympics during the years the WUSA and WPS were in existence (the 2003 World Cup kicked off just a week after the WUSA announced it would suspend operations and the U.S. team finished third, losing to Germany in the semifinals). Team USA also lost in the 2011 World Cup final against Japan during the third season of the WPS. The USWNT's world championship wins in 1991, 1996, 1999, 2004, 2008 and 2012 all occurred in non-pro league years.
Some will argue this is just coincidental, but having lived through one professional league while playing on the U.S. team, I can tell you the physical demands of crisscrossing North America for league games and crisscrossing the globe for international games is exhausting. This is especially true as you get into your 30s, where many of the core USWNT players are right now.
So, can U.S. Soccer accomplish the double with the NWSL: Win world championships and develop a broader playing pool? And if the national team performs better with residency training (the top 30 players living together for six months leading into a world event) as history indicates, is that a cause for concern for this new league?
I think it is a legitimate concern and an interesting paradox for the best U.S. players. Yes, USWNT players want to support the NWSL. Yes, they are grateful for the support from U.S. Soccer. But if the level of play is not up to standard, at what point will U.S. players choose to compete elsewhere? For marketing stability and league viability, it's no wonder U.S. Soccer negotiated multiyear deals with USWNT players. John Langel, longtime attorney for the U.S. women's national team, confirmed the deals to espnW this week. "U.S. national team players have commitments beyond one year," he said.
"This is a new business, there are going to be hiccups," Abby Wambach told me by phone this week from the Netherlands, where the U.S. was playing an international friendly. "We must set expectations that are realistic ... it may take a little while to evolve into something even more special. The NWSL broadens and deepens our player pool ... it makes it way more competitive. It makes U.S. national team players train and play as hard as they can every single day. We have proven we can win without a pro league, but what we are losing without it is the next generation of development."
The difficulties of a quick league launch are understood. There may not be a full-out TV deal or sponsorship support in the first season. (At the time this article was posted, the NWSL had yet to announce any television plans, but Gulati said the league is expected to by week's end.)
The second season will need to be different, but putting together an entertaining product that attracts fans and more believers is what is most important in this inaugural season. We know Portland is going to be a successful franchise. It has a fantastic ownership group that has done very well in MLS and has the knowledge, infrastructure, staff and fan support to make the women's side thrive immediately.
For the other seven teams, four of which have the same past owners from the WPS, drawing revenue may prove more challenging, especially for the three markets without prior league experience (Kansas City, Seattle and Washington, D.C.). All three are strong soccer markets, but a strong market does not always equal soccer success. There are two lessons from the prior leagues that I hope we never forget: Institutional knowledge on how to run a pro soccer team is vital, and sharing resources by running both men's and women's teams sure helps.
"I was worried about distracting from MLS, frankly," Merritt Paulson, owner of the Portland Timbers (MLS) and Portland Thorns (NWSL), recently told me. "We had to look and see if we had the capability and bandwidth to do both. People are certainly working harder ... but there is a whole other audience here that may not have been regulars at Timbers games."
Paulson added: "A couple MLS teams are very interested [in running both teams]. ... Not to say they will do it, but we have heard from them."
Some MLS teams will be waiting to see how the inaugural season unfolds, but there are positive signs early on.
"We are close to 7,000 with season-tickets sales. It has surpassed my wildest expectations," Paulson said. "It is looking like we will average over 10,000 per game easily. And if our cost projections stay where they are, we will be profitable. That statement in and of itself, that women's pro soccer can be viable, is really exciting for the future of the league, and hopefully more MLS teams will get involved, as well.
"Given the way the U.S., Canadian and Mexican federations stepped up, I felt some responsibility to launch a team in this new league -- to give an example of how good it can be and how successful women's pro soccer can be," Paulson added.
Wambach perhaps said it best when she told me recently, "We have to be realistic, but optimistic. If we're growing year by year, that's way better than setting high, unrealistic expectations and [later] taking cuts and doing things that don't feel as good."
The current popularity of the U.S. women's team should not be understated. I think back to the 10-game Fan Celebration Tour after the 2012 Olympics and remember all the screaming young fans and average attendances of 15,521 -- for friendlies with no competitive relevance. Sustaining that level of interest on a weekly basis is an entirely different animal, but this national team's popularity is at a completely different level than the one that launched the WPS in 2009. Social media venues like Twitter, Instagram, Facebook and YouTube also give the NWSL new, innovative and cheaper ways to market the league.
I am still amazed at how much U.S. Soccer has been able to pull off in the almost five months since it announced the launch of NWSL. I know I speak for many when I say that I desperately hope this new women's league can be successful. I agree that creating a scaled-down model was the right way to go and expenses had to be contained. Most importantly, I commend U.S. Soccer for its support; this league would not have been possible without it, there is no debate about that.
I just hope the NWSL will be entertaining. And by being entertaining, coupled with lower costs and federation support, it will be sustainable. And by being entertaining and sustainable, fan support and ticket sales will grow. And by ticket sales growing, media support will follow. And when media support follows, sponsorship and merchandising sales grow, and we will face a problem of having to write Financial Fair Play rules since NWSL revenue will have multiple commas attached to it. A sweet problem, indeed.
If you are a fan of the women's game, go buy tickets. Tell your friends and teammates and family members and complete strangers who just want to visit the beer gardens to join you.
Let the market speak.
Better yet, make it chirp.