Are WNBA Gamers Underpaid or Overpaid?

Claudia Goldin is a Harvard labor economist who received the 2023 economics Nobel, and he or she has a brand new mission in life: increase pay for the gamers within the Ladies’s Nationwide Basketball Affiliation (WNBA). In a latest op-ed within the New York Instances, she wrote that the pay disparity between WNBA gamers and their male counterparts within the NBA is “embarrassing.”

She writes:

Ladies’s basketball has quickly develop into one of many nation’s hottest spectator sports activities. The Indiana Fever, with its star Caitlin Clark, frequently sells out arenas. A number of W.N.B.A. video games final 12 months attracted greater than two million viewers. The 2024 N.C.A.A. ladies’s championship recreation drew a bigger tv viewers than the boys’s championship.

But gamers within the W.N.B.A. make far much less cash than many male athletes in much less fashionable sports activities leagues — and solely a sliver of what the common N.B.A. participant does. Nothing can justify this extraordinary pay hole.

She continues:

Throughout the American financial system, a lot of the gender pay hole not displays outright discrimination. It as an alternative displays the completely different occupations and industries that women and men select to enter, in addition to different components. However gender discrimination stays a serious downside, and there’s now a distinguished instance for everybody to see: skilled basketball.

For the previous 12 months, I’ve labored with the Ladies’s Nationwide Basketball Gamers Affiliation, the union for W.N.B.A. gamers, to think about the earnings of basketball gamers, and I’ve been stunned by what I discovered. The typical N.B.A. participant’s wage is round $10 million within the present season. That’s 80 instances what the common W.N.B.A. participant earned (about $127,000 in wage) within the 2024 season.

Nonetheless, as Goldin writes, she has formulation that “recommend that the common W.N.B.A. wage ought to be roughly one-quarter to one-third of the common N.B.A. wage to realize pay fairness.” Her declare is that the WNBA receives a couple of third of the viewership of the NBA, and that the pay constructions ought to mirror that scenario.

First, Goldin is making an orange-to-apples comparability in utilizing viewership, for the reason that promoting costs are greater for NBA video games than these of the WNBA. Second, the NBA is a worthwhile entity, whereas the WNBA shouldn’t be and has not made a revenue within the near-30 years of its existence.

That the WNBA is unprofitable (and will by no means flip an actual revenue beneath the present enterprise mannequin) is critical if one understands the basics of Austrian economics. From Carl Menger’s 1871 Rules of Economics, we be taught that the worth of the components of manufacturing (what Menger known as “items of upper order”) is set by the worth of the ultimate product, and within the case of the WNBA, the worth of the person gamers is set by the worth that WNBA prospects place upon the worth of the basketball video games themselves. In different phrases, the valuation course of runs backward from the worth of the ultimate product to the worth of the components (or higher-order items).

As a result of the WNBA faces losses yearly, the group in all probability ought to be categorized as a charity or non-profit, since particular person franchises, economically talking, would have a damaging worth. Moreover, as a result of ladies’s sports activities within the US are extremely politicized, due to their affiliation with Title IX of the Training Amendments of 1972, one can argue that the WNBA actually is a political versus an financial entity, which actually is what Goldin is arguing.

Her declare that WNBA gamers ought to be incomes greater than $2 million a 12 months on common shouldn’t be based mostly upon their financial worth to customers {of professional} ladies’s basketball, however reasonably is a political opinion tied to her summary view of the world. That doesn’t imply individuals don’t worth their companies—spectators pay to look at them—however reasonably persons are not prepared to pay on the similar degree that spectators pay to look at NBA video games.

There’s an exception, nonetheless, and that has been the entry of Caitlin Clark into the league. Her passionate and wide-open model of play crammed arenas and considerably raised the value of tickets when she was on the town. Nonetheless, as I famous final 12 months, Clark acquired a hostile reception from many of the gamers as a result of she is white and straight. I wrote:

Certainly, whereas basketball audiences and TV executives had been ecstatic about Clark’s entrance into skilled ladies’s basketball, fellow WNBA gamers and various media commentators had been downright offended and hostile, making it clear that Clark was not welcome. Although one economist estimated that Clark was liable for about 26.5 p.c of the income coming from ticket gross sales, merchandise, and tv, none of that mattered to most of the homeowners, coaches, and gamers within the league.

Not solely had been gamers outspoken in opposition to Clark’s entrance into the league, however she additionally was the sufferer of more durable (deliberate) fouls than every other WNBA participant. For instance, Chennedy Carter of the Chicago Sky is proven on this video screaming “B*tch” at Clark simply earlier than intentionally knocking her to the ground. The officers merely known as a typical foul earlier than the league, after listening to protests, upgraded it to a Degree One Flagrant Foul the following day, though Carter acquired no punishment for what she did.

Clark’s therapy this 12 months is even worse. Brittany Griner—who spent almost a 12 months in Russian jails for possession of cannabis oil earlier than being launched on a prisoner swap—was seen just lately calling Clark a racial slur, one thing the WNBA brass ignored. (When Angel Reese of the Chicago Sky claimed that followers of Clark’s crew—the Indiana Fever—used racial slurs in opposition to her, the league instantly “investigated.” Nonetheless, the WNBA later introduced its investigators discovered no proof to substantiate Reese’s declare).

There isn’t a denying Clark’s monetary influence on the WNBA. After she was injured this 12 months, lacking a number of weeks, tickets to her video games plummeted in value. But, many WNBA gamers nonetheless desire she not be taking part in in any respect. Whereas even Goldin acknowledges that Clark’s monetary affect is necessary, Goldin doesn’t tackle the hostility towards Clark and the financial harm that the league would undergo if these gamers had been profitable in driving her from the WNBA.

However Clark or not, there’s a cause that WNBA salaries are as little as they’re. As I wrote final 12 months:

As a result of the WNBA shouldn’t be a worthwhile entity, its survival owes extra to feminist and racial politics than the rest and the response of the league to Caitlin Clark drives house that time. A male star like Clark who’s so good that he’s altering the sport can be honored within the NBA. The WNBA, nonetheless, is trying an increasing number of like simply one other a part of the fashionable Grievance Trade. So long as the league is heavily-subsidized, don’t search for that half to vary.

Goldin can cite mathematical fashions if she needs however given the truth that the WNBA creates damaging wealth, the one true “fairness” can be salaries of zero if she goes to attraction to financial formulation. No matter pay the gamers obtain is an act of philanthropy, and there’s nothing fallacious with rich NBA gamers and WNBA homeowners opening their financial institution accounts to accommodate feminine basketball gamers. Simply don’t name in “fairness.”