Today we’re excited to share big news about big money for the league we love! The WNBA has announced the largest-ever capital raise for a women’s sports property: $75 million. This was the first time that the WNBA raised money from investors in its history. And it was funded by selling equity in the WNBA.
The funding includes investments from more than two dozen investors in a play to revamp the league’s business model as players call for expansion, higher salaries, and stronger benefits. Investors include Nike, Secretary Condoleezza Rice, Laurene Powell Jobs, Michael Dell and his wife Susa, Pau Gasol, Swin Cash, N.B.A. and W.N.B.A. team owners such as Monumental Sports & Entertainment’s Ted Leonsis, and other sports and business figures.
“We felt if we had this capital, we could have increased marketing and advertising,” WNBA Commissioner Cathy Engelbert said. “Which in this cluttered social media world you have to very strategic and innovative about. I think there is interest in everything the league stands for and everything the players are doing, both on court and socially and community minded. We looked for investors who shared the values of the WNBA. And who believe women’s sports are on the way up and want to get in.”
“It’s really important that the players know this is investment in them. Even though it’s in the league and not a specific team or just specific players. It’s to help grow our revenue streams and produce sustainable long-term growth.”
The league is open to ideas from the players’ union about how to use the new money. The WNBA’s new backing could pave the way for any number of investments, from sports betting to online virtual experiences, Cathy said. But at the top of the list of priorities is getting more fans and better understanding consumer behavior. Today’s fan base skews young and female. However the league’s digital strategy to connect with that group has been underfunded.
It plans to prioritize marketing, globalization, and improving its digital products. Specifically they’ll focus on its website, app and League Pass, which allows fans to watch games that are out of market and not on national television. They’ll also look to optimize human capital and operations, as part of an overall effort to address some of the league’s obstacles to growth and generating new revenue.
Cathy also called out a pain point fans are all too common with as something she plans to address: “And our merchandise strategy — obviously, we’ve had no capital to evolve a merchandising strategy.”
Revenue from these efforts could then be used to fund key requests from players, such as chartered flights, and increased player salaries Cathy said. The average player salary for the 2022 season is $108,085. While the minimum player salary for the 2022 season is $60,471, and the maximum is $228,094.
“If we can move faster on transforming the economics of the league and our 12 teams, then we’ll feel comfortable that we have the right model to bring in new teams to thrive and not just survive,” Cathy said. “That’ll definitely open up opportunities for us to move to the next step on expansion.”
“There was a lot of discussion of: Could we continue to get an economic model to support all the commitments that were being made by the league and the owners in collective bargaining agreement? Or should we go and try to see if we could raise outside capital?” Cathy told The Athletic. “There’s a lot of capital sitting on the sidelines. Interest rates are very low. People are looking at equity investments, people that share our values and want to invest in women’s sports.”
The league used an innovative strategy for the raise, which was run by Allen and Company as financial advisor for the transaction. While other leagues, such as Major League Soccer, have expanded with expansion fees serving as usable capital, or taking high-profile investors into teams, the WNBA’s investors bought into the league itself. Previously it had been owned 50% by the NBA, and 50% divided by each of the 12 WNBA owners.
Cathy said that the new investments would not overly complicate who owned how much. She noted that in many cases, NBA/WNBA overlapping owners already had shares of the WNBA reflecting both of these holdings, reported Howard Megdal for Forbes.
The process of raising money took two years. The league began to raise money in January 2020. Right after it signed a new collective bargaining agreement with its players. Though the close was sidelined by the coronavirus pandemic.
As part of its ongoing commitment to empowering women athletes and women’s sports, NIKE, Inc., made a significant equity investment in the WNBA, in addition to already being a premier partner and inaugural WNBA Changemaker. “Women’s sport is one of the best investments, with great potential to impact and grow the next era of basketball,” said Sonja Henning, VP, North America League Partnerships, NIKE, Inc. “Nike has always been more than a sponsor with the WNBA – we’re a strategic partner. And we’re proud to be part of a movement to redefine the future of sport for a new generation – for WNBA players, fans and girls.”
Nike is joined by a number of prominent investors from the sports and business ecosystems:
Today, “There’s huge momentum for women’s sports, and particularly the WNBA leading it.” Cathy said. Indeed, WNBA viewership is on the rise. The league capped off its historic 25th regular season by delivering its most-watched season since 2008.
“Susan and I are excited about the growth opportunity in women’s sports and specifically the WNBA,” said Michael Dell, CEO, Dell Technologies and minority investor, San Antonio Spurs. “We also are proud to support a league that is committed to empowerment. And we look forward to supporting Cathy and all the accomplished and diverse women of the WNBA to make a positive impact in the world.”
Both the WNBA and NBA Board of Governors have approved the transaction. Which means all systems are a go on league growth — and we can’t wait to watch!
Learn more about WNBA betting, which is driving new interest in the league, too.
