On the Economics of Renumeration in Womens' Soccer in the USA

I took an interest in the women's world cup (or, as the USA won it, I suppose we have to call it the World Series of Soccer Playoffs.

And I noted the complaint by the USA team that they are not paid as much the men's team despite winning the World Cup 4 times in total, a 50% win record and with back to back to back winsin 2015 and 2019.

I am entirely in favour of equal pay for equal, or equivalent work. it's both fair and economically efficient - making it a moral imperative in my view. People should be paid the same for doing the same job.

There's one exception I make and that's for performers. I think it becomes difficult to pin down exactly what the job is and exactly what function the remuneration package takes.  Specifically, where you are providing units of entertainment rather than units of labour or units of tightly defined output and in effect have a partnership share in the revenue or profit from that entertainment.

So I wanted to do a bit of digging in to the state of the men's and women's soccer game in the USA. There are some notes below

Major League Soccer

24 teams (rising to 27)

Average attendance 20,000 - third after NFL and baseball

MetroStars sold in 2006 for $100m

Average salary $373k, lower than the average salary in England's Championship.

Salary cap at $3.845m per team ($92.25m overall but NB Designated Player rule allows the cap to be set aside for 3 players per team (David Beckham on $6.5m per annum)

3 players on say $7m a year per team is $500m plus $100m from the Salary Capped Players is $600m on players' wages.

Average valuation of a franchise $240m

TV revenue is about $40m per annum

20,000 tickets per game at $20 a ticket is $400k in ticket revenue per game (tickets for LA Galaxy in a range between $15 and $200 and I have been told that the worst seats for an Ohio  State American Football game sell for $120.)

Average ticket price for Cincinattie is $19 rising to $25

https://www.wcpo.com/news/insider/taking-a-look-at-what-major-league-soccer-teams-charge-for-tickets

Each team plays 34 games (so 24 times 34 divided by 2 is 408 games per season plus play-off - $1.6bn in ticket revenue. Say overall revenue of $2bn

Players wages making up $600m / $2,000m or 30% of revenues. (I think that's low compared to European soccer or the NFL - suggests I've made an error somewhere.)

National  Women's Soccer League

9 teams playing 24 games each. (3 games against each team) is 108 games plus playoff

Minimum roster is 20 players, minimum salary is $17k, max salary is $46k plus allocated national team players from US and Canadian national teams. So, say an average salary of $36k. 20 players in 9 teams is $6.5m in salary costs.

There doesn't appear to be a TV deal.

Average attendance is 6,000. Tickets between $15-$30, say $20 average, gives revenue of $120k per game, over 100 games is about $120m overall ticket revenue, say total revenues of $200m or 10% of my estimate for total revenue for the men's game.

NB salary as a % of revenue here is about 3.25% - a factor of ten less than the % of the men's game that players take home. Quick check against fixed costs. Assume women take home 30% of the revenues after fixed cost. Implies surplus over fixed costs in the women's game is $22m and fixed costs are $178m. Not sure that really flies. Looks like women are taking home proportionally less then men. They are probably due an order of magnitude pay increase at some point soon.

 

https://www.forbes.com/sites/billconerly/2019/06/10/earnings-parity-in-womens-soccer-a-long-kick-away/#757b95c276bb

Women in the national team tend to make more of their salary from their place in the national squad than men.They are often on a national team retainer. Lots of women in soccer are on part-time contracts. Men are mostly paid for by their clubs and released to the national team.

 

Which makes it a bit difficult to pay the women's national team the same as the men's national team as it looks like the USian public value the women's game at about 1/10th the value of the men's game despite their significantly better performance on the international pitch. What is the job that is being done here? Accurately kicking a ball in concert with other people in order to place it in a net or providing an emotional and entertainment response from spectators?

Which is not to suggest that the difference in value in the two games isn't based on gender discrimination. Women's sport, and women in sport are consistently treated as less valueable, less interesting and less important than men's sport. That assumption that women's sport is lesser than men's sport rolls through all aspects of the economics of sports. Men do valuable sports. Sports that men do are valuable. Men in sport are valuable. Not so much for women. It is a salutory statistic that for a long time the highest earner in women's tennis had never made the quarter-finals of a major tournament and made most of her money selling lingerie and such like services.

I don't know how to undo that sexist dynamic. I'm not sure there is a policy lever that can be pulled that solves the issue over a time period of years. I think we're looking at a generational shift in how women's sport and women in sport are valued.

For sure there is a significant difference in quality between men's football and women's football. However, that's not entirely the point. These people aren't being paid for being brilliant at football. They aren't brain surgeon's where the quality of the inputs is material. They provide units of entertainment. Even in those sports where the gap in quality is narrower there is a still disparity in income. Units of entertainment in sport is a bit of a slipperly concept. It's slippery enough when applied to things like music or acting. I couldn't exactly tell you why I prefer watching Tom Hanks to watching Tom Cruise, or Nicole Kidman to Tom Cruise or paint dry to Tom Cruise but I do. A lot. There's a lot of subjectivity and matters of personal taste. That's true of sport. I prefer rugby to soccer. I prefer tennis to golf. I can't watch basketball.  I prefer watching Tottenham  play than what my mum calls "cloggers up the back park". I prefer Aberdeen to win ugly than Rangers to win pretty. I think I'll enjoy taking the Captain to watch Edinburgh City FC in a top of the table promotion clash with local rivals Berwick Rangers more than I enjoyed taking him to watch Liverpool play Napoli in a friendly. Unit of entertainment are slippery and ill-defined.

So, I'm not really sure where that leaves the salaries of the US women's national team. There is some good evidence that they are under paid as a proportion of revenue compared to men.  They are very good at their job (depending on how you define their job). That is obvious when they are compared to other women doing the same job. Perhaps less obvious when compared to men doing the same job (again this depends on the definition of their job.)  The economics suggest that their industry (women's soccer in the US) isn't providing the same number of units of entertainment as the men's game. They are effectively equity holders in the game rather than purely employees, so it's right that they capture a share of the profit but it's true that the profit is smaller then the men's game generates.

I hope that the interest generated by the recent Women's World Series of Women's Soccer for Women translates in to more interest in the game generally and that this translates in to more money going in to the game therefore in to the pockets of the players but I'm not sure it's as simple as the US women's team have won more than the men's team, they should be paid the same.