OPINION
12/04/2018 09:00 am ET

Mark Cuban Is Wrong About Why WNBA Pay Is So Low

Dallas Mavericks owner Mark Cuban at an Oct. 17 game against the Phoenix Suns.
Matt York/ASSOCIATED PRESS
Dallas Mavericks owner Mark Cuban at an Oct. 17 game against the Phoenix Suns.

Across the past few months, a number of WNBA players have argued the league should increase its player salaries. A partial list of those making this argument would include A’ja WilsonSeimone AugustusKia NurseLiz Cambage, Brittney Griner, Layshia Clarendon, Skylar Diggins-Smith and Elena Delle Donne.

The average salary in the NBA is reported to be $7.4 million, while average pay in the WNBA is reported to be less than $80,000. However, as Kelsey Plum notes, these numbers alone are not the issue:

“I’m tired of people thinking that us players are asking for the same type of money as NBA players. We are asking for the same percentage of revenue shared within our CBA. NBA players receive around 50 percent of shared revenue within their league, whereas we receive around 20 percent.”

The 20 percent figure Plum mentions was originally noted in an article I wrote for Forbes. Although many players think this percentage illustrates how men and women are treated differently by professional basketball, Mark Cuban, owner of the Dallas Mavericks, recently argued that the pay difference between the NBA and WNBA is not about gender:

“The difference is the total amount of revenue,” he said. “It’s not a gender issue. It’s just like we paid a lower percentage to the men until the revenues went up. And when our revenues went up, we were able to pay a higher percentage.”

This argument may sound reasonable on the surface. However, data from sports history make it clear that Cuban is incorrect about the link between league revenue and how much the leagues pay their players.

Player pay in a sports league isn’t about how much revenue the league is earning. What matters is the choices made by the leagues.

To see this, let’s start with some baseball history. According to data collected by economist Rodney Fort, the average Major League Baseball team in 1953 had $2.1 million in revenue. Fifteen of these 16 teams reported player payroll data. On average, these teams paid $426,154 in salaries. That means that in 1953, the average team paid about 20.7 percent of its revenue to its players. 

In other words, baseball in 1953 paid about as well as the WNBA today.

Now let’s turn to the NBA. Fort also reports data from the Seattle Supersonics in 1968-69 season. At the time, the Supersonics reported that they earned $992,000 in revenue. Fort does not report average salaries from that season.

But for the 1970-71 season, Fort reports that the average salary on the Sonics was $45,000. With 14 players on the team that season, the Sonics paid out $630,000 in salaries. If we assume revenue in 1970-71 was similar to revenue just two years earlier, then the Sonics in 1970-71 were paying 63.5 percent of their revenue in player salaries.

That year, the NBA was in its 25th season, about as old as the WNBA is today. Still, the Sonics appear to have paid a much higher percentage of its revenue to its players than the WNBA is currently paying theirs.

Twelve years later in 1982-83, an article by David DuPree in The Washington Post indicated that the NBA paid out about 59 percent of its revenue in player salaries (64 percent if you include Dupree’s estimate of player benefits and insurance).

NBA teams in 1983 had lower revenue in real terms (i.e. today’s dollars) than a baseball team 30 years earlier. But just like we saw with the Sonics, the percentage of revenue paid out in salaries was still much higher.

So why did baseball pay so little (in percentage terms) in 1953 and the NBA was paying so much more a few decades later? The issue is the bargaining power of the workers and the choices this power allowed teams to make.

In 1953, each baseball player’s contract included the reserve clause. This clause stated that when a player’s contract expired, a team had the right to renew the contract for one year under terms the team would determine. This clause ― as it was interpreted by baseball teams ― tied a player to a specific team for as long as the team wished to employ the player. That means players in 1953 had very little bargaining power. Consequently, baseball teams chose to pay its players relatively little.

The NBA in the late 1960s faced a very different labor market. In 1967, the American Basketball Association (ABA) began operations. That meant professional basketball players in the late 1960s could work for either the NBA or the ABA. With more than one team bidding for a player’s services, bargaining power for players increased and so too did the player’s compensation.

In other words, NBA teams had to choose to pay players relatively more in order to keep them in the league.

Skylar Diggins-Smith has argued the WNBA should increase the salaries paid to its players.
Jessica Hill/ASSOCIATED PRESS
Skylar Diggins-Smith has argued the WNBA should increase the salaries paid to its players.

After 1976, the ABA ceased operations. But that same year, the NBA also settled a suit filed in 1970 by the Players Association, then led by Oscar Robertson, that gave NBA players the ability to continue to elicit offers from multiple teams. Such bargaining power allowed NBA salaries to keep rising.

In 1983, NBA players agreed to a cap on payrolls (i.e. the salary cap) that guaranteed the players at least 53 percent of league revenue. In other words, players appear to have taken a pay cut. The agreement in 2005 was better for the players, giving them 57 percent of league revenue. However, after the 2011 lockout, the percentage guaranteed the players was reduced so that now players receive between 49 percent and 51 percent.

This recent history of the NBA’s salary cap tells us again that Cuban’s story isn’t quite right. According to Forbes, the NBA’s total revenue in 2010-11 was $3.96 billion. For the 2016-17 season, Forbes reported, NBA revenue was $7.4 billion. And this next year, revenue is expected to eclipse $9 billion. Despite this rapid increase in revenue, the percentage paid to players ― contrary to Cuban’s story ― has declined.

In the end, player pay in a sports league isn’t about how much revenue the league is earning. What matters is the choices made by the leagues.

The WNBA shouldn’t think of an increase in pay as a cost. Perhaps it would be better to think of this as an investment.

When baseball had the reserve clause and players had very little bargaining power, teams chose to pay very little to their players. When the NBA faced competition from the ABA, the league chose to pay a much bigger share of its revenue to its players.

So, what does this mean for the WNBA? The WNBA players recently opted out of the league’s collective bargaining agreement. It would not take much for the WNBA ― and their NBA partner ― to close the gender-wage gap.  

Currently, it is estimated the WNBA has about $60 million in revenue with about $12 million of this going to the players. To give the WNBA players 50 percent of league revenue would require league payrolls to increase by $18 million.

In other words, for what the New York Knicks are paying Joakim Noah not to play basketball this year (Noah is being paid $18.53 million), the gender-wage gap between WNBA and NBA players could be closed.

For the NBA, this is a very small amount. However, if other costs couldn’t be lowered, paying more could make it more costly to operate the WNBA. But perhaps the WNBA shouldn’t think of this increase in pay as a cost. Perhaps it would be better to think of this as an investment.  

As HuffPost columnist Jessica Luther writes, many WNBA players spend their off-season playing ― and risking injury ― in leagues around the world. By increasing the pay to players, WNBA players would have an incentive to focus all their attention on the WNBA. Choosing to pay a small amount more today would protect the primary asset of the WNBA (i.e. the players) and also encourage these players to promote the league throughout the year.

In the end, player pay all comes down to the choices the WNBA and its NBA partner make. As sports history tells us, the percentage of revenue paid to the players is not about how much revenue a league is earning. It’s about power, and it’s about the share of revenue that owners like Cuban can keep for themselves.

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