The WNBA made history this month when it announced that it has raised $75 million in capital to invest in the league. This was the first time that the league used investors to raise money and the $75 million sum marks the largest investment for any women’s sports property. But who is behind the investment, why is the WNBA doing this now, and what does it mean for the future of the league? Let’s take a closer look at some of these questions.
Why Raise Capital Like This?
As mentioned, raising capital through private investors is a somewhat unusual move for a major sports league and this is the first time the WNBA has done so. However, a quarter-century into its history, the WNBA is yet to approach the success of the NBA. Obviously, the NBA has set the bar particularly high and the ongoing pandemic hasn’t helped matters. But it’s not a stretch to say that the impact the WNBA has made in the sporting landscape is a little disappointing for a league that’s been around for 25 seasons. Therefore, the time seemed right for a new strategy.
At the same time, the WNBA has made progress in recent years, which is why the league was such an appealing investment opportunity. Otherwise, the league may not have been able to raise $75 million in capital. Television viewership received a significant 49% increase last season with help from ESPN, which broadcast the entire postseason. At the same time, the league and its players agreed on a new collective bargaining agreement in 2020 that will last eight years and raised the base salary to $215,000, an increase of nearly $100,000. That increase also made it plausible to pursue financial investment.
Who’s Investing?
While exact details of where the $75 million is coming from weren’t released, there is a long list of prominent names who are contributing to that $75 million sum. The list includes current and former WNBA players such as Swin Cash, as well as Ginny Gilder, the co-owner of the Seattle Storm. Former NBA players like Pau Gasol and Baron Davis have also invested. Many prominent business owners with a connection to the WNBA have invested, including Eric Holoman, Mark Walter, and Ted Leonsis. Finally, former Secretary of State Condoleezza Rice is also an investor. And on the corporate side, Nike has also made an equity investment, in addition to their overall partnership.
What Happens Now?
Naturally, the $75 million question is what will happen with the money that’s been raised. A large sum of the money is expected to be used to improve the WNBA’s brand and marketing, drawing more attention to the league’s teams and most prominent stars. These are areas where most would agree the WNBA has been lacking
“Our strategy is to deploy this capital to continue to drive the league’s brand as a bold, progressive entertainment and media property that embodies diversity, promotes equity, advocates for social justice, and stands for the power of women,” explains WNBA Commissioner Cathy Engelbert.
Since taking over as Commissioner in 2019, Engelbert has made marketing and innovation two of his biggest priorities. The ultimate goal is to showcase more of what the league offers on more platforms throughout the world. With more marketing and advertising opportunities for players, the league can hopefully reach a greater audience and grow its revenue streams that will make the WNBA a more stable and successful league for years to come.
