When it Comes to WNBA Profits, Focus On What People Do. Not What People Say!
The Owner of the Cleveland Cavaliers Wanting a WNBA Franchise Suggests the NBA Story about WNBA Profits Probably Isn't True
Economics is supposed to be social science. But it tends not to be very social. Unlike psychologists or sociologists, economists don’t tend to do many surveys of people. Economists tend to think what matters is what people do, not what they say.
Of course, that’s how we explain the lack of surveys. Economists also don’t seem very good at talking to people! But that’s a story for another day.
For today, let’s focus on the difference between what people say and what people do. Let’s start with what people say.
If you bring up the subject of the WNBA with many casual sports fans you will likely hear the following emphatically yelled:
The WNBA doesn’t make a profit!
How do sports fans know this? Well, it’s what the NBA keeps repeating over and over again.
The WNBA has a very odd ownership structure. In the NBA, the 30 owners of the teams own the league. In the WNBA, it’s a bit more complicated. The twelve WNBA owners actually only own only 42% of the league. Another 16% of owned by a collection of people who gave the league $75 million in 2022. And the last 42% of the league is owned by the NBA. Given that there are NBA owners who also own individual WNBA franchises, the NBA’s control of the WNBA is beyond 50%.
All of this means as Suzanne Abair (the CEO of the Atlanta Dream) said in Slaying the Trolls:
“If the 12 WNBA owners say they want to do something and the NBA says no, the answer is no.”
So, the NBA often calls the shots in the WNBA. And one of the shots it likes to fire is that the WNBA isn’t profitable. For example back in 2018 – Adam Silver ASSERTED (yes, I am capitalizing this for a reason) that the WNBA had lost on average $10 million every year it existed. If that were true, by 2018 the WNBA had lost $220 million.
Last year, Bloomberg reported that WNBA revenue from 2019 to 2023 had doubled from $100 million to $200 million. And then 2024 happened. According to the WNBA, there was a 48% increase in attendance from 2023 to 2024. And merchandise sales at WNBA.com increased by an amazing 600%!
Given such a rapid increase in revenues, we would probably think that WNBA losses are a thing of the past.
According to the NBA, though, we are wrong. Back in June, the NBA ASSERTED that WNBA losses in 2024 were projected to be $50 million. In October, this previous assertion was changed. The New York Post reported that the NBA now ASSERTED that the WNBA losses in 2024 were $40 million.
So, revenues in the WNBA explode. But losses increased four times?
Yes, the math doesn’t exactly math, does it?
Once again, the only evidence we have of WNBA losses is what the NBA has ASSERTED. Reporters keep reporting these assertions as facts. But that doesn’t make them facts. These losses are just a story the NBA has consistently told. And at no point has the NBA provided any evidence that what they say about the WNBA is true.
Of course, it is the same story in the NBA. For decades, the NBA has also asserted — without evidence — that the NBA isn’t profitable (as we note in Slaying the Trolls). And again, that has always just been an assertion.
There is a good reason to reject all these assertions. Economists – as previously stated – tend not to believe what people say. We tend to believe what they do. And a few days ago, the owners of the Cleveland Cavaliers announced they were doing something that strongly suggested what the NBA has been ASSERTING for years isn’t true.
"It has long been woven into our mission to utilize our platform to unite our community in ways that drive equal opportunities across the board. To that end, we are actively pursuing bringing a WNBA expansion team to Cleveland. Cleveland's vibrant ecosystem of world-class assets, passionate and engaged sports fans, coupled with a culture that has allowed professional sports to thrive, make our team and city uniquely positioned to provide an ideal home for the W's next franchise."
Let’s recap. Supposedly the WNBA has always been losing money. And those losses are oddly escalating (despite huge increase in revenue). And now an owner of the NBA desperately wants to get a WNBA franchise?
If I were a reporter at the New York Post I would be wondering about the story I was just told a month ago. People are not supposed to want to invest in something that loses money all the time. Either the story told to the New York Post in October wasn’t exactly true or the owners of the Cavaliers just aren’t all that bright.
Again, economists tend to think we should focus on what people do. Not what they say.
So – as we say in an entire chapter in Slaying the Trolls – there are many reasons to think the story the NBA has told about WNBA profitability isn’t exactly true. As we are seeing from investors in Cleveland (and San Francisco, Toronto, and Portland), it really is good time to invest in the WNBA.
And it is also a very good time for reporters in New York to stop being so immensely gullible!
Professor Berri never misses #noliesdetected