The fine print in WNBA rights deal is going to matter — Chandler McCabe talks Robert Morris hoops

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But a bit of news buried within a larger story about the NBA media rights deal on Wednesday threatens to step on the league’s Toronto moment. At the very least, it represents a much bigger determining factor about the future of the WNBA than any single expansion team.

SBJ writes, within the story outlining a potential doubling of the NBA annual rights deal:

Industry sources believe ESPN will ultimately pay $2.8B annually — though other industry sources insist it is still an earlier reported $2.6B — for the league’s “A” package, which includes the NBA Finals, a conference final, weekly primetime games, the WNBA and likely shared international rights. NBC’s proposed “B” package is believed to be worth between $2.5B and $2.6B annually and would probably include a “Basketball Night in America” or “Sunday Night Basketball” following the NFL season, a total of two primetime windows a week, conference semifinals and a conference final. Amazon’s deal is believed to be worth between $1.8B and $2B and would likely include the Emirates In-Season Tournament, the SoFi Play-In Tournament, first-round playoff games, the WNBA and international rights.

That leaves quite a bit of room for a host of different outcomes as it relates to the WNBA.

For a refresher — the WNBA is set to receive $33 million in rights fees for the ESPN portion of its broadcast footprint in 2025, the final season of its current deal, according to internal documents reviewed by The IX. While there is no way to know whether all the assets present in the proposed deal with ESPN will accrue value equally — that is to say, just because the overall package doubles in value, it doesn’t mean each portion of the package will increase at the same rate — such a doubling would put the WNBA at $66 million per season.

That number, should the league make public a valuation of that kind, carries with it both talking points and disappointment. WNBA commissioner Cathy Engelbert expressed a goal of $100 million in the new media rights deal, and the league only really gets close to that in this example by conflating what it receives from ESPN with its other deals — Ion, Amazon Prime, CBS Sports, etc.

One WNBA team executive said that anything like $100 million or less would be “a joke”, adding that the league’s ratings are far more comparable at this point to the NHL, which earns $400 million annually from ESPN, and far outpace MLS ratings just before the latter league signed a $250 million annual deal with Apple TV for its rights.

“Anything less than that is pure misogyny,” this executive added.

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To a certain extent, if the WNBA is simply compared to other women’s sports properties, a doubling would be a win. After all, NWSL’s media rights deal is at $60 million annually, all partners included, while the NCAA’s March Madness women’s tournament valuation checked in at $65 million. Doubling $33 million puts the WNBA at $66 million from ESPN. That gives the WNBA the chance to claim, accurately, that the market values it as the most premium women’s sports television product.

There are mitigating factors here, though. NWSL, for example, grew from a previous annual valuation of $1.5 million per year. And the NCAA freely admitted it packaged its women’s basketball tournament with other sports, rather than offer it to the marketplace individually (as the Kaplan, Hecker & Fink gender equity report recommended) to maximize television coverage for its other, less-popular sports, presumably with a discount involved since few television networks could commit the time, money and resources to broadcasting several dozen championship tournaments.

When Engelbert spoke about why the WNBA would consider negotiating for its new media rights deal jointly with the NBA back in April, however, she said this:

“Yeah, I think what’s important is there’s a reason the WNBA is the longest-tenured women’s professional sports league in the country, and it’s because the NBA has been such a great partner in launching this league, building this league and investing in this league. So to the extent it makes sense, I think what I heard Adam say, but to the extent it made sense to go to market together, that’s what we’ll do.

“I think as you look at streamers who have a subscription model, the WNBA gives the NBA longer programming across the year. I think Adam uses the quote of 320; I actually think it’s more days. And there’s no other set of two sports leagues that can offer that live programming and sports to a streamer like that. I would say probably in that case we need the NBA because we have a smaller footprint with only 40 games, and it’s nice to go to market together.

“So where it makes sense to go together, we will. Where it makes sense — so we have our own deals today that the NBA doesn’t have, with Amazon, with CBS and with ION. So where it makes sense not to, we’ll evaluate that and work with Adam and his team on that. We’re just excited that we have a lot of interest from a lot of media partners in the W. We’ve got to deliver an amazing season this year in order to get, I think, the right-sized valuation.”

For the record, the NWSL season is 26 games long, and the $60 million annual valuation came without offering alongside, say, MLS. In this case, the WNBA’s footprint and its spot in the calendar is supposed to make it uniquely valuable to anyone who is also buying NBA rights. Does this number represent a premium over what the WNBA, flying solo, could receive from a full complement of bidders?

But the bigger question for me, what no one has ever answered satisfactorily, is why there should be a separate women’s sports bucket at all, why viewers of the WNBA should count differently than those who watch men’s sports. Why aren’t the NHL and MLS the comps here for any bidder? The eyeballs are the eyeballs, and if anything, the WNBA’s viewership, skewing younger and more diverse, should be more valuable to television networks, not less.

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Then there’s this math, too: the league receiving an additional $33 million annual windfall just after unilaterally declaring charter flights the law of the land, with a very public cost of $25 million, allows Engelbert and company to come into potential negotiations claiming that yes, there’s more media rights money, and we’ve already spent it on you, just as the WNBPA faces a decision on whether or not to opt out of the current CBA, a decision it will need to make following the 2024 season, with the current CBA then ending following the 2025 campaign if they do. (In theory, the league could also opt out, but…)

Characteristically, the WNBPA has taken its eye off the ball, and is focused on the shiny object that is Toronto today instead of the ways the league is playing several moves ahead.

Sounds like it’s time to dust this one off…#BetOnWomen #TransformationalChange https://t.co/UuJOKyMAQ6

— WNBPA (@TheWNBPA) May 22, 2024

As a further reminder, the money is not even the money, per se, not when the ownership structure of the WNBA involves WNBA owners only owning approximately 42 percent of the league, with another 42 percent owned by the NBA and the remainder sold in a $75 million capital raise back in February 2022.

A few months later, Engelbert urged caution on the media rights deal front.

“It’s not about, let’s rush to renegotiate a media contract,” Engelbert said to me back in June 2022. “It’s, let’s disrupt the valuation model so that when we negotiate our next media deal or set of media deals… we’ve got to be very careful that we don’t rush into something before a lot of that plays out.”

This was prescient. The WNBA is currently seeing ratings it hasn’t posted in over two decades. The NBA, meanwhile, is generally holding steady. So it is still technically possible that the new deal with ESPN reflects this reality, and the report’s throwing in the WNBA as an add-on beneath the NBA’s various game packages is simply a misreading of league and network alike recognizing the real growth sector in their bold new partnership, valuing the WNBA games at a rate closer to its true audience mates, the NHL and MLS. (And that’s being generous to those two men’s leagues, given the early 2024 WNBA ratings.) Maybe when the numbers are revealed, we’ll all be pleasantly surprised. Maybe this framework agreement leak will even lead to another party swooping in and offering the WNBA significantly more money, noting the league’s ratings boom and swooping in to capitalize on it.

Fortunately, the league is seeing other areas of massive financial growth — particularly important for teams at a moment the method of financial distribution moves from an initial growth stage to a normalized stage, with increased distributions due to teams beginning next year, according to league documents reviewed by The IX. It’ll be a lot harder for the WNBPA to verify that revenue, though, if it attempts to this time around.

But whatever that media rights valuation is, the consequences of this valuation, as I have written in this space many times, will be massive for the future of the league and the sport. And as another WNBA team executive put it to me, “I’d argue anything NOT north of $200 million is a fail.”

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This week in women’s basketball

Terrific explainer of the Las Vegas investigation here from Maitreyi.

Mark Davis believes the WNBA should have called the investigation into the Aces “This is great”.

These are the stakes for the 2024 Chicago Sky.

Erica Wheeler is the model for veteran teammate.

As we look for markers to illustrate the WNBA’s bigger profile, you could do worse than “Ellie The Elephant Is In Vogue”.

Five at The IX: Chandler McCabe, Robert Morris head coach

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