Introduction to Sport Finance CHAPTER 1 31 The Growth of a League CASE ANALYSIS For many years, women's professional basketball struggled for folded prior to the 2009 season. The sixth independently owned consistency in the United States. Since 1978, when the Women's team was the expansion team Atlanta Dream, which began play in Professional Basketball League (WBL) was formed, leagues have had 2008 (WNBA Expands," 2007). The Tulsa Shock became indepen- difficulty surviving beyond a few seasons. The WBL lasted for only dently owned, as well, when they relocated from Detroit three seasons, and it was ten years before a second professional The league also began to move toward profitability. Its first lengue, the Liberty Basketball Association (LBA), was launched. The television agreement under which it would receive a rights foe was LBA folded after only one exhibition game. A year later, another an eight-year agreement (2009-2016) signed with ABC, ESPN, and league was created the Women's World Basketball Association. ESPN2. Teams including the Phoenix Mercury and Los Angeles Sparks Although this league was more successful than the LBA, it too folded sold sponsorship rights to their uniforms, with LifeLock appearing on shortly into its first season. Finally, 1996 saw the launch of the Phoenix's uniform and Farmers Insurance on the Sparks' uniform. American Basketball League, and the Women's National Basketball In 2008, as the league continued to move away from its single- Association launched a year later. The ABL lasted for two and a half entity status and closer to profitability, the third CA was signed. Seasons Jenkins, 2009). The WNBA entered its 19th season in 2015. This st-year agreement set the WNBA salary cap at $803,000 per The WNBA began as a single-entity league in 1996, with its team in 2009 and increased it to $900,000 by 2013. For players first season starting in June 1997. It was formed by the NBA Board with three-plus years of WNBA experience, the minimum salary was of Governors and owned by the league. Since its founding, the $51,000. The maximum salary for a player with six or more years number of franchises and the franchise locations have fluctuated was $99.500. Rookies received a minimum of $35,190 (Women's The league's first 16 players were dispersed to the inaugural eight National, 2008). After the 2009 season, the Sacramento Monarchs teams, and the rest of the players were selected by the teams folded, and the league has played with 12 teams since then. Seven via a draft ("History of the WNBA. 2015). The Women's National of the 12 are owned by entities outside the NBA Basketball Players Association (WNBPA) was formed soon thereafter The fourth CBA was signed in 2014 and continues through and negotiated its first collective bargaining agreement (CBA) with 2021. This CBA added a 12th roster spot to each team. Maximum the WNBA in 1999. This was the first CBA in women's professional salary was set at $107.000 in 2014 and increases during the form sports. Under this CBA, rookie minimum salary increased by 75%, of the CBA. The minimum salary was set at $37.950, with veterans and veteran minimum salary doubled. Year-round health coverage with over three years' experience receiving a minimum of $50,000. and a retirement plan were provided. Contracts became guaranteed A soft salary cap of $750,000 per team was set. Teams can exceed and players earned a collective share of league licensing income the cap by 4% (WNBA salaries 2015, 2015). About the WNBPA, 2015) The league's viability is still a subject of concern. The Sparks The WNBA introduced a draft lottery in 2001, and in 2003 the lost money each year after the team was purchased from the league in 2006. The team was scheduled to lose more than $1 million in league and the WNBPA signed a new CBA. This CBA created the first tree agency system in women's sports ("About the WNBPA"). 2014, when it was put up for sale. Magic Johnson purchased the The most significant change during this time frame, however, was team after it had been on the market for two months (D'Hippolito, the NBA Board of Governors' vote to allow individual team owner- 2014). After the 2014 season, the WNBA expected six teams to be profitable. Ship, moving the league from a single-entity model to a distributed club ownership model. Further, teams could be owned by non-NBA case questions owners and could be located in non-NBA markets. On January 28, 2003, the Mohegan Tribe, located in Connecticut, became the first 1. Why was the WNBA structured as a single-entity league when it was founded? What advantages and disadvantages did the non-NBA owner in league history when it was awarded the Orlando structure provide to the league? Miracle franchise (WNBA's Greatest Moments. 2015). 2. What impact did the fest CBA have on the WNBA, and how did In 2005, the Chicago Sky became the second WNBA franchise each of the CBAs affect the league's profitability? to be owned and run by a non-NBA entity (the team's first season 3. What factors have caused the WNBA to move away from the was 2008), and the Washington Mystics were transferred from single entity structure? Wizards owner Abe Poitin to Lincoln Hokings, LLC (WNBA's Greatest Moments"), Sheka Johnson then became the first female owner in 4. For now leagues, why is the single-entity structure appealing? the league, The Los Angeles Sparks became independently owned At some point, do start-up leagues have to move away from this structure? Why or why not? In 2008, as and the Houston Cornets in 2007, although the Comets Introduction to Sport Finance CHAPTER 1 31 The Growth of a League CASE ANALYSIS For many years, women's professional basketball struggled for folded prior to the 2009 season. The sixth independently owned consistency in the United States. Since 1978, when the Women's team was the expansion team Atlanta Dream, which began play in Professional Basketball League (WBL) was formed, leagues have had 2008 (WNBA Expands," 2007). The Tulsa Shock became indepen- difficulty surviving beyond a few seasons. The WBL lasted for only dently owned, as well, when they relocated from Detroit three seasons, and it was ten years before a second professional The league also began to move toward profitability. Its first lengue, the Liberty Basketball Association (LBA), was launched. The television agreement under which it would receive a rights foe was LBA folded after only one exhibition game. A year later, another an eight-year agreement (2009-2016) signed with ABC, ESPN, and league was created the Women's World Basketball Association. ESPN2. Teams including the Phoenix Mercury and Los Angeles Sparks Although this league was more successful than the LBA, it too folded sold sponsorship rights to their uniforms, with LifeLock appearing on shortly into its first season. Finally, 1996 saw the launch of the Phoenix's uniform and Farmers Insurance on the Sparks' uniform. American Basketball League, and the Women's National Basketball In 2008, as the league continued to move away from its single- Association launched a year later. The ABL lasted for two and a half entity status and closer to profitability, the third CA was signed. Seasons Jenkins, 2009). The WNBA entered its 19th season in 2015. This st-year agreement set the WNBA salary cap at $803,000 per The WNBA began as a single-entity league in 1996, with its team in 2009 and increased it to $900,000 by 2013. For players first season starting in June 1997. It was formed by the NBA Board with three-plus years of WNBA experience, the minimum salary was of Governors and owned by the league. Since its founding, the $51,000. The maximum salary for a player with six or more years number of franchises and the franchise locations have fluctuated was $99.500. Rookies received a minimum of $35,190 (Women's The league's first 16 players were dispersed to the inaugural eight National, 2008). After the 2009 season, the Sacramento Monarchs teams, and the rest of the players were selected by the teams folded, and the league has played with 12 teams since then. Seven via a draft ("History of the WNBA. 2015). The Women's National of the 12 are owned by entities outside the NBA Basketball Players Association (WNBPA) was formed soon thereafter The fourth CBA was signed in 2014 and continues through and negotiated its first collective bargaining agreement (CBA) with 2021. This CBA added a 12th roster spot to each team. Maximum the WNBA in 1999. This was the first CBA in women's professional salary was set at $107.000 in 2014 and increases during the form sports. Under this CBA, rookie minimum salary increased by 75%, of the CBA. The minimum salary was set at $37.950, with veterans and veteran minimum salary doubled. Year-round health coverage with over three years' experience receiving a minimum of $50,000. and a retirement plan were provided. Contracts became guaranteed A soft salary cap of $750,000 per team was set. Teams can exceed and players earned a collective share of league licensing income the cap by 4% (WNBA salaries 2015, 2015). About the WNBPA, 2015) The league's viability is still a subject of concern. The Sparks The WNBA introduced a draft lottery in 2001, and in 2003 the lost money each year after the team was purchased from the league in 2006. The team was scheduled to lose more than $1 million in league and the WNBPA signed a new CBA. This CBA created the first tree agency system in women's sports ("About the WNBPA"). 2014, when it was put up for sale. Magic Johnson purchased the The most significant change during this time frame, however, was team after it had been on the market for two months (D'Hippolito, the NBA Board of Governors' vote to allow individual team owner- 2014). After the 2014 season, the WNBA expected six teams to be profitable. Ship, moving the league from a single-entity model to a distributed club ownership model. Further, teams could be owned by non-NBA case questions owners and could be located in non-NBA markets. On January 28, 2003, the Mohegan Tribe, located in Connecticut, became the first 1. Why was the WNBA structured as a single-entity league when it was founded? What advantages and disadvantages did the non-NBA owner in league history when it was awarded the Orlando structure provide to the league? Miracle franchise (WNBA's Greatest Moments. 2015). 2. What impact did the fest CBA have on the WNBA, and how did In 2005, the Chicago Sky became the second WNBA franchise each of the CBAs affect the league's profitability? to be owned and run by a non-NBA entity (the team's first season 3. What factors have caused the WNBA to move away from the was 2008), and the Washington Mystics were transferred from single entity structure? Wizards owner Abe Poitin to Lincoln Hokings, LLC (WNBA's Greatest Moments"), Sheka Johnson then became the first female owner in 4. For now leagues, why is the single-entity structure appealing? the league, The Los Angeles Sparks became independently owned At some point, do start-up leagues have to move away from this structure? Why or why not? In 2008, as and the Houston Cornets in 2007, although the Comets