In recent years, one of the most popular new sports leagues has been the Women's National Basketball Association. I had a chance to sit down recently with Kathy Engelberg, who's the commissioner of the WNBA, to ask her how she's helped to transform the WNBA into a very popular sport. Let's talk about the WNBA as a business and make sure I understand how many teams are there.
So starting the season, there'll be thirteen teams. We had twelve for a long time. Thirteen teams on our way to sixteen or more.
Who's the new team?
The new team is in the Bay Area, the Golden State Valkyries, and they're going to kill it this year off the court for sure, and on the court they'll be They had an expansion draft, so it'll be interesting to see.
Hey, so you have thirteen teams. Are you planning to expand to more now?
Yeah? So we've announced team fourteen and fifteen in Toronto and Portland, and we have a process right now for additional teams where we have a lot of demand and a lot of ownership groups around the country interested.
Each team has how many players?
Twelve twelve players?
You've got one hundred and forty four professional players.
Yeah, one, fifty six this year fifty six.
Okay, So today the league is well known for having some stars like Caitlyn Clark among others Angel Rees as well. Is that kind of competition between Angel Rees and Caitlin Clark helping your TV ratings? And is that worked out well for you to have Caitlin Clark in the league.
You know, when I came into the league. People watch sports for three basic reasons, for rivalries, for games of consequence, and for household names if you know the players, and we didn't have a lot of household names, even though we had amazing players back then and have amazing players beyond Caitlin and Angel. So rivalries are generally good for sports and women's sports. Sometimes it's complicated by the social media vitriol, which we did announce. It's terrible what some
of these players have to endure. And so the hatred, the vitriol, the misogyny, the homophobia, the racism, there's no place for it in sport, and we like to be known in sport as a big uniter. So that's the negative part of that. But the positive certainly has been that people are watching. I mean we brought tens of millions of new people into our sport last year because this rivalry came out of college.
Okay, well, take Caitlyn Clark. She was very famous at the University of Iowa, and she came into the league and she had more attention probably than anybody who came in as a rookie, Rookie of the Year, and so forth. But it seemed as if she was getting beaten up a little bit or being treated relatively roughly. Why would the other players who would see that she's making the league more visible and more profitable, why were they kind of giving her a rough time.
Yeah, I think that that narrative became the narrative. But I think, you know, we have a really exciting, fast paced, physical game. The physicality I think surprised a lot of the new fans that came in games pretty physical in college. But then when you come to WNBA and it's all the great players from the best colleges in one place, one hundred and forty four of them last year with our twelve teams, we're expanding now, so I think it was very physical at first for a lot of new
eyes on the game. I think there were unfortunately some inappropriate plays that happened. But over the course of the whole season, I think Caitlin really adjusted well, so did Angel because Angel was very physical for her at first two. And I think all of our rookies or Kia Jackson and Cameron Brink got heart early in the season. But you know, they all adjusted to the physicality of our game, and I think our fans didn't adjust as quickly, and then that narrative kind of got away from us.
Now, recently, Adam Silver, the head of the commissioner of the NBA, negotiated on behalf of the NBA and the w NBA a contract, a TV contract for many years that was said to be worth roughly seventy six billion dollars over some period of time, and you get part of that as I understand it. So were you happy with that arrangement.
Yes, we actually negotiated our own deal, but along when you partner and what I call go to market with the NBA. The NBA and WMBA are the only two major professional sports in the US that have essentially opposite seasons.
Were made to October. They're October to June, but April is the end of their regular season, so we could provide think about the disruption and the media landscape from linear to streaming to subscription models, and we together with the NBA can provide over three hundred and twenty plus days of programming, So we hit all twelve months for programming for a streamer, even if it's NBC and Peacock
er Amazon, So it was a huge advantage. We're much more valuable going to market with them on this deal with NBC and ABC, ESPN, Disney as well as Amazon, So that was a huge positive for us and we had a great deal. It's historic for women's sports.
How long is the contract fork.
So that contract's eleven years?
Eleven years and you get two to three billion of that something like that.
Yes, exactly. But after three years we have an option to renegotiate around the price of that if we keep growing, because we've grown the league enormously just in a couple of year period, so we after three years have an option. We also have the option to enter an additional media rights deals. I call them our Trench two deals, and we're in the process of negotiating those.
So you have an option after two or three years to negotiate presumably a higher price. Yes, did they have an option to negotiate a lower price? No?
I think it's an option to take a look at the growth of the league, and if we continue on the growth trajectory, it's to provide more value, especially because ultimately that value goes to the players.
So today, how are your TV ratings compared to the NBA or your assume a fraction of it, but how do you compare or do you get ten percent of what they get?
Twenty last year we had an unbelievably historic year. Our average was at one point two million, huge increase over prior years.
Two million people watching watching.
Average average some games TV linear. We would peak in the US, a US only number, that's not a global number. We have a lot of global fans too, and that's an untapped area of growth for US. But we continue to look at a huge increase in that viewership. I mean even our draft at peak last year, over three million people watch the WNBA Draft. Last year our All Star Game over two million people. These were all time records. And remember we don't necessarily compare ourselves with the NBA
or other men's sports. They've been around the NBAS in their seventy eighth year. NFL, NHL, and MLB are all over one hundred years old. We're going into our twenty ninth season this year, so these comparisons to men's league are tough, but certainly where we are today, I never thought we'd have as high viewership as we had last year.
It's often the case that these players have to fly commercial historically. Now, as a result of your new arrangement, you can afford to have and every team can afford to have a kind of a special.
Jet or a charter program.
Is that part of the deal.
Now, Yes, It's something we've been working on since I came into the league. We've been chipping away at it. We offered it during certain games previously years ago, chipping away at it for full playoffs two years ago, and then last year because I knew where we were tracking for the media rights. But we needed to build an economic model to fundness. It wasn't just like you wave a wand and you can give a twenty to thirty
million dollar benefit to someone through charter travel. So I felt very confident, our owners felt confident that we had been building an economic model to sustain it over the long term. Because it also can't be you just offer it for a year or two. We need to think about it for decades. That we were able to afford it, and so I felt good about that and we did it outside of collective bargaining cycle.
Now, the NBA has something called a salary cap, and I guess a salary floor. Do you have a salary cap?
Yes, we do. We have a hard cap under the current CBA. Obviously that CBA will be up after this year and we'll be negotiating a new deal.
You've done quite well, But there's any team profitable at this point by normal profitability standards.
Yeah, I think our teams are making enormous progress towards profitability. They're just growing. But what they're doing, which we love, is because they have so much confidence in the growth trajectory either turning around and anything, they might be making their investing back. We have at least six teams who
are now have built, are building new practice facilities. They're working on a lot of different things to invest in the player experience because our free agency has become such an important part of building a roster to win a championship. So they're all taking the upswing in attendance gate for them, corporate partnership money for them, and they're investing it back in the business today.
How many owners of w NBA teams are women?
Well, again, we have NBA affiliated owners, independent owners, We have an all women ownership group, three women up in Seattle. We have diverse ownership at the minority investor level. Obviously all the NBA teams are primarily owned by men, but we're making some progress there with diverse ownership groups. And again, as we look at expansion, we look for the diversification of that group.
So in college basketball, the average game or the game is how long in terms of length of time?
So again in women's they have four quarters forty minutes. We played four quarters forty minutes in professional or in professional then yeah, if you pay four quarters forty minutes forty minutes total each quarter is ten minutes.
Yes, okay? And today is that likely to change or the rules going to change any way shape or form that you know?
Yeah, I don't think, you know. One of the things when I came in I assessed kind of the strategy and the quality of the game, and the importance of the brand. And the one thing that when I looked at the game. There's not much to tweak about the game. I mean, pure shooting, pick and rolls, great rebounding, great play. People who we've brought in those tens of millions and new fans love the game. So I don't think there's
much to tweak in the game. And we use more technology, can officiating you know, advance and evolve, yes, But the game itself, I think the quality of the game was something. You know, it's probably the only thing we didn't need to actually pick up a stone and totally change.
Let's talk about your own background for a moment. Where are you from.
I'm from Philadelphia and you were born there. Yeah, born in Philadelphia, grew up in right across the bridge in southern New Jersey and one of eight kids. I have my brothers.
I'm an only child, so I don't know what that's like. What is it like to have seven siblings.
Yeah, it's crazy, especially five brothers three older, so I was their fourth and everything from whiffleball to soccer, to hockey, street hockey to basketball. Grew up very athletic family, very competitive, like my sister and I would compeach you and I are only thirteen months apart, compete for everything, including food, and we'd hide food in our rooms because the brothers would steal all the food. So it was a fun upbringing. Continues to be very close knit family.
Oh what did your father do to support a family of eight children?
So my father worked for RCA and was an IT guy and early like we used to have the punch cards, he'd bring punch cards home, an early it kind of manager. Unfortunately died young in nineteen eighty seven. But my mom worked for sixty two years for the same place for a pediatrician as their office manager as that business grew. So you know, both my parents worked, and my mom, though, you know, was able to balance it all and raise eight children on the way.
You were an athlete in high school? Yes, and what sports did you play?
So? I actually played tennis, basketball on lacrosse in high school, and I was recruited for lacrosse in college. I was a walk on for basketball. Back in the mid eighties, you could play two sports in college at a D one level. Today you can't do that, But back then I played both lacrosse and basketball.
So you were the captain of both teams. Yes, you're playing two sports and eventually you have to graduate. So you graduate, and you said, I want to be in sports or I want to be going to Deloitte.
Well, actually it all dates back to sophomore year when I was a computer science major and I had to take a programming course in Fortran and I said, I have no idea what that professor's talking about. Someone said, there's this thing called the Business School, Cathy, you should transfer to it. And there's something called accounting and it's
the language of business, and you'll get a job. Because it was the big eight accounting firms back then, so I didn't know who said it was the language of business. I found out later that was Warren Buffett, and you'll get a job. I got a job pretty easily back then and started with Deloitte.
In those days, I can't imagine that women were being seen as potential CEOs of big accounting firms. So as you imagine when you started you would be the CEO.
No, because I think at the partner ranks when I started, it was probably five percent women partners, so it was pretty new, you know, as far as the trajectory for women. Never thought that I would be the CEO. Never aspired to be the CEO quite frankly, but your specialty was what? So my specialty back then was I worked in a variety of clients, growing up manufacturing snls back during the SNL crisis. Bank I settled more once I had my kids,
in the pharmaceutical sector as well as consumer products. But I was a derivative financial instrument specialist at the firm, which gave me tons of tons of valuation expertise.
You were the CEO of Deloitte, which is one of the largest service providers in the United States and accounting, an audit firm, among other services, and you did that quite well for quite a while, and all of a sudden you're approached by the WNBA about being the commissioner. What made you think you would want to do that and what made them think that you could do that?
Well, it's an interesting question. So it didn't seem to make a lot of sense to a lot of people unless you had come to my office at Deloitte and saw basketballs all behind me. So I played college basketball for now Naysmith Hall of Fame coach Muffett mcgahol, who went on too great success at Notre Dame. I went to Little Lehigh University and my father was actually drafted into the NBA in nineteen fifty seven by the Detroit Pistons. So we had a lot of basketball DNA in the family.
And so when I was my term was ending at Deloitt, I really said, you know, what do I want to do next? I want to do something different, something with the broad women's leadership platform and something I had a passion for, thinking maybe it would take me to a college or university. And then someone coach me about the WNBA commissioner job, and I said, definitely is something different, broad women's leadership platform and certainly a game. I have a huge passion for the game.
How long had you been the CEO of Deloitte?
So I'd been at delott for over three decades, thirty three years, and I'd been the CEO for a little over four year terms four years. I took over a little earlier than usual and then your terms up and it's time to move on. And could have stayed at Deloitte senior partner, but really wanted to do something in kind of a second act and this was it.
And did you stay connected to sports by playing on weekends or anything? Like that, or you didn't have time.
For that, not really raising two kids, you know, having a career. I did coach my daughter's travel basketball team from middle school during middle school. I stay connected that way, but just a big fan of sports.
So now, how many years have you been the commissioner?
Five and a half so almost six now.
Any regrets about taking the job.
No regrets at all. This was a really good fit for me personally, professionally, and just enjoy the game so much. I could go to a game every day and it's just been a total transformation of a league that was just surviving five six years ago and now thriving.
So what do you do outside of the job you have now? Are you any corporate boards or this is what you're doing full time?
Or no? I am on corporate boards. That was one of the things that was important to me, given my long history at Deloyd. So I'm on the board of McDonald's. And one of the reasons I wanted McDonald's was not necessarily because I love Hamburgers, although I do. I want to be consumer brand because now I'm running a consumer brand called the WNBA, and it's been helpful to see their digital their consumer base their globalization and everything. And then I'm on the board of Royalty Farmer, which is
a public company as well, and then I play. My passion now is golf.
So I don't play golf because it's too humiliating to me.
It's a hard game. I took it up when I became the CEO of Deloitte. So I was fifty when I took it up. And it was because I would be in CEO's offices and they would be talking golf or they'd have golf decorations in their office. I'd ask them about it. Do you play? I played a little bit and then started playing a lot and got pretty good at it and got invited to the at and T Pebble Beach Pro Am and the American Express. And now I just love being in that environment with all
my former CEO colleagues. And it's a lot of fun now, but it isn't great. And I tell a lot of women take up golf, you know. It's a great way to build relationships in the corporate world.
Recently, in spring training, I went into a batting cage and they found the picture who could throw the ball between three and four miles an hour as slow as possible, and I actually hit a couple of ground balls to everybody's amazement. Do you ever go on the court and say, well, look, I played at Lee High. I was a star there. Let's have a little shoot around.
You ever do that all the time? I passed by in the practice facilities or as I'm walking in arena the rack of basketballs, and I'm like, and I'll usually have heels on, so it's a little challenging, but I'll always take a ball and shoot a few, and the players, I think it does give you a little credit that you played the game, not at the level they're playing at, but playing for Muffett McGraw and Nasmith Hall of famer. My dad played for Jack Ramsey, doctor Jack, who was
a Naismith Hall of Famer. So just having a little bit of that basketball DNA is helpful.
In the NBA, many of the stars, now not all, but many of the stars come from Europe or other places outside the United States. Do you have many players coming from outside the United States.
We've got players from Germany, Canada, Australia, France, Spain, Africa. Yeah, so we're starting to globalize our ranks. But they're not quite where the NBA has been, again the NBA being fifty plus years older than US, but it's starting to increase. And I think the US's dominance in the Olympics. The women just won their eighth consecutive gold medal in basketball in the Paris Olympics, and I think that dominance has helped lift other programs around the world, such as France
almost the only lost by two to the US. So a lot of these programs around the world have invested in their grassroots and youth football such that they're getting really good.
And today, when you were trying to get sponsors, is it much different for the teams to get sponsored much easier than it used to be, or the the league negotiate sponsor deals, or each team does its own sponsor deal.
Both. We have national league sponsor deals, we have global deals, and then there's local deals for teams to negotiate as long as it doesn't block a category at the national level. And so one of the things that's so interesting to me when I came in the league, and I didn't know this because I was off at Deloitte in a very different industry, is that someone told me my first day on the job that less than one percent of all corporate partnership money spent on sports is women's sports.
And my first question David, as a good prior accountant, was what's the denominator? Because if we were to move that a couple hundred basis points, how much do we have to move the numerator? And I would say we've moved that significantly up probably to ten percent or so. But the denominator's huge. Obviously, it's multiple, multiple tens of billion.
Women's sports are the two biggest known or best known women's sports, I would guess in the United States in terms of professional leagues are soccer or what was called football outside of the United States, and basketball. Yes, is there a third that's coming up as softball?
Yeah, well certainly the WMBA. We're the longest tenured women's professional sports league at twenty nine years now, double any other so, and part of that's due to our big brother of the NBA and everything they've done for us. And then it's soccer, and then the PWHL is a new hockey league that has emerged and they've had a lot the hockey's had a lot of fits and starts, has had soccer. We're blessed to have had continuity over
twenty nine years. But I think there's some emerging sports like volleyball, but they're the problem is there's four professional volleyball leagues, so they probably need some consolidation.
If you look back on what you achieved today, what are you most proud of having achieved today?
Definitely the growth, you know, the you know, getting through the pandemic. I mean if it was pretty existential for us during the pandemic, we hadn't started our season yet because remember pandemic was March when Adam Silver shut down the sports world by shutting down the NBA play then the NCAA's shut down. So getting through that pandemic year I'm probably most proud of. It was like working on an IPO for a couple of weeks. Because I had just come in the league. I didn't have a lot
of relationships. We had to convince the players to play that we would keep them safe. We were at a time of racial crisis in America with the George Floyd situation.
We got thrown in the middle of the political battle in the state of Georgia with one of our owners, so there was so much going on in that twenty twenty years, so I think I'm proud of the way we emerged from that, such that just a year later, in February of twenty two, we were the first women's sports property to raise capital at scale seventy five million dollars. We probably could have raised more.
What do you consider the biggest single challenge for the WNBA going forward?
I would say, you know, we have several challenges and several opportunities. One of our biggest challenges is certainly how do we globalize this game. There's a lot of opportunity outside the United States to build fandom, to build viewership, to make our players global stars. We continue to be challenged by being a women's league and therefore and a diverse one. So therefore we continue to be challenged around the vitriol in social media against our players and the league.
So we're working on a four prong strategy on that, around a technology solution to help with the social media side, monitoring physical safety, and mental health. So that's another challenge, but enormous opportunity as well in the league around so many areas. Expansion would be one of those. A lot of capital inflows coming into the league finding places to invest that.
So if somebody said to me, you have a chance to invest in a women's NBA team, w NBA team new One, should I take that chance or should it to still a risky investment?
Now, I think as you look at our new media deal, you look at the growth, You look at the quality of the game, the strength of the brand, what it represents. Would I wish three four years ago I had invested in it, but obviously I couldn't as the commissioner. But yes, that's why we raised that capital three four years ago. Those people who invested in us back then were believers in the future, and I think, you know, they're all going to be pretty happy, So yes, I would invest.
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