Does revenue explain the USWNT's World Cup bonus shortfall?

https://www.theguardian.com/football/2019/jul/24/usa-women-soccer-equal-pay-bonus-questions

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When the Guardian reported the exclusive details of how small the World Cup bonuses for the US women’s national team are compared to their male counterparts, many of the responses to that article centered around one topic: revenue.

Revenue, some argue, must explain the difference in bonuses, whether they come from US Soccer or via Fifa. If, the argument goes, women’s soccer generates less money than men’s then it is natural the bonuses are smaller. Here is a look at whether that argument holds true and everything else you need to know about revenue as it relates to the topic of equal pay.

Does it matter whether the men’s or women’s team brings in more revenue?

Before getting into the revenue arguments, it’s worth considering whether revenue should matter at all.

Both US Soccer and Fifa are not-for-profit organizations with stated missions to grow soccer in the US and globally, respectively. Their benchmarks of success are not profits. Rather, they aim to get more people playing, watching and caring about the sport. That requires a lot of investment, which is the opposite of chasing short-term profits.

Without investment (or, in other words, losing money), there’s no way for women’s soccer to grow. After all, men’s soccer has at least a hundred-year head start on the women’s version of the game. Women’s soccer was banned in England, the country that invented the modern game, until 1971. Other countries also banned it, including Brazil until 1981 and Germany until 1970. The question is whether non-profit organizations should ignore their mission of growing the women’s game because it doesn’t have as robust of a foundation as men’s soccer.

Fifa, by the way, has cash reserves of $2.8bn. US Soccer reportedly has a surplus of $150m.

What is the pay disparity between the men’s and women’s versions of the World Cup?

The total prize money Fifa offered for the men’s World Cup last year was $400m, with the top team earning around $38m. For this summer’s Women’s World Cup, a total of $30m was available, including $4m for the winning team. The total men’s pot is about 13 times larger than the women’s pot.

Is there a reason for this disparity? Does the men’s World Cup bring in more revenue than the women’s?

It’s impossible to know. Fifa does not divide its largest sources of revenue for its various World Cup events: broadcast rights and sponsorships. Instead, it sells both these categories as bundles for all editions of the World Cup, including youth versions. For instance, when Fox Sports bid $200m for Fifa’s US broadcast rights, it wasn’t just bidding to air the men’s World Cup, but the women’s tournament as well. David Neal, the head of Fox Sports’ World Cup coverage, admitted the broadcaster hadn’t assigned a specific value to each tournament. But he admitted the Women’s World Cup was highly valuable to Fox: “I don’t know how you quantify that,” he said. “But right now the shining star of US Soccer is the US women’s national team.”

Tatjana Haenni, the former head of women’s soccer at Fifa, has said the organization has never even attempted to figure out the value of the Women’s World Cup. “That’s something never really analyzed,” she said. “What is the potential value of the Women’s World Cup? Nobody knows the Women’s World Cup commercial value because it’s not sold separately. This is something that should at least be discussed.”

The men’s World Cup does generate more money from ticket sales, and the men’s event also has more games than the women’s event. But when Fifa claims they earned $6bn in revenue from the men’s World Cup in Russia, it appears they are including the value of bundles they sell for both the men’s and women’s tournaments. In other words, money that is actually being paid for both the men’s and women’s tournaments has apparently been interpreted by Fifa as being revenue generated by only the men’s event, regardless of whether that’s true or not.

There must be another reason for Fifa to make men’s prize money so much higher …

Apparently not. Fifa hasn’t come out and stated specifically how it determines prize money. When Fifa doubled the prize money for the Women’s World Cup from $15m in 2015 to $30m in 2019, that sounded like progress – except Fifa also increased the men’s prize money at the same time and the gap between the two tournaments actually got larger, not smaller. Critics of Fifa have said prize money is decided arbitrarily.

Some Fifa defenders argue that the men’s World Cup television ratings are higher than the women’s, and that is the basis of the difference in prize money. We won’t have Fifa’s final viewership audit of the 2019 Women’s World Cup until later this year. But if we go back to the previous cycle, Fifa’s own analysis says the 2015 Women’s World Cup was watched by 764m people while the 2014 men’s World Cup was watched by 3.2bn. In other words, the men’s World Cup was watched by about four times as many people as the women’s World Cup – yet the men’s prize money is about 13 times higher.

What about the US Soccer Federation – what is the pay disparity there?

This is much more complicated than the issue of prize money offered by Fifa, but bonuses are a good place to start. An exclusive analysis by the Guardian found that US women’s national team players could only earn a maximum of around $261,000 each for winning the World Cup in France while their male counterparts could earn around $1.1m or more if they had won last year in Russia (which they didn’t even qualify for). US Soccer said that disparity is based on the prize money from Fifa. But friendly bonuses are similar: the women can earn a maximum friendly bonus of $8,500 per game while the men can earn up to $17,625 per game.

US Soccer pay salaries to the US women, something they don’t do for the men. Most players on the USWNT earn salaries of around $100,000, plus as much as $67,500 for competing in the US Soccer-backed NWSL. The men have to earn all their compensation from bonuses only. But the women argue in their lawsuit against US Soccer that more money is made available to the men overall.

It’s hard to parse out exactly today how the different contracts have translated into actual compensation for each team. That’s because the lawsuit filed by the US women’s national team uses data ending in 2016, and since then the women have gone on to negotiate a better contract while the men failed to qualify for the 2018 World Cup. But according to figures from US Soccer, the top five male players in compensation from 2008 to 2015 earned more than the top five women. After that, the women earned more when comparing the top-paid sixth through 20th players for each team. But after that, the men earned far more than the women for the rest of the list: the 25th highest-paid male player earned double the 25th highest-paid woman. That data is outdated by now, and the women figure to be closer to the men, but it is the basis of the lawsuit the women filed earlier this year.

So does the US men’s national team bring in more revenue for US Soccer?

The short answer: no, not in recent years. Again, US Soccer bundles its broadcast and sponsorship deals in the same way that Fifa does, making it impossible to determine which team drives the higher value in those deals. And those two categories of TV rights and sponsorships make up most of the revenue that US Soccer brings in.

But another large slice of revenue comes from ticket sales, and the US women’s team have been out-selling the men for the past three years. Since winning the Women’s World Cup in 2015, USWNT games have brought in more revenue than those featuring the men – $51m compared to $50m. These numbers come from US Soccer’s own financial audits, which are published on the federation’s website.

From US Soccer’s standpoint, the men have a higher ceiling of revenue-earning potential, especially if and when the men start playing well. That’s because having the US men’s team allows US Soccer to host tournaments like the Copa América, which the federation did in 2016 and generated $50m. The men can also command higher fees to play friendlies against other teams around the world, but those fees haven’t been disclosed in US Soccer’s financial statements. When comparing ticket sales, however, the women have been generating more revenue.

Is revenue the only factor courts take into account for pay equality?

No. Courts have upheld disparities in compensation for men and women in sports due to perceived higher pressure and demands in men’s sports. One particular case in California, which is where the USWNT’s lawsuit will be heard, sets a precedent. It was decided the men’s basketball coach at the University of Southern California could be paid more than the women’s coach because he had more promotional duties and faced more pressure to win.

Having said that, it can be argued the US women are under more pressure than their male counterparts. After all, the USWNT play more games in a calendar year than the men’s team, drive more ticket revenue, and faces higher expectations to win major tournaments. If the legal precedent exists for offering more money in men’s sports due to pressure, it may apply to the women’s team in this case.

But didn’t the women agree to be paid less by US Soccer through their collective bargaining agreement?

The players have said they asked for a revenue-sharing model in contract negotiations but US Soccer rejected it, which left the players having to negotiate in another direction.

“It is not an effective defense to a discrimination claim to argue that the employees agreed to it,” the players’ lawyer, Jeffrey Kessler, said in a statement to the Guardian. “In most cases, employees have no choice but to agree. This certainly applies to this case, and also applies historically in cases of race discrimination or minimum wage. No matter what they can force employees to agree to, the employer must comply with the law. The players repeatedly asked for equal pay and bonuses in the CBA negotiations and the USSF flatly said no. That was illegal and the very reason this class action had to be filed.”

After the USWNT filed their wage discrimination lawsuit, US Soccer president Carlos Cordeiro said he was surprised by the filing because the players “at no point” had “raised concerns about the CBA itself”. The players and their representatives deny this and say they’ve consistently raised concerns.

The lawsuit is now headed toward mediation, and while the resolution will probably involve a large payout from US Soccer, it’s a good bet that the CBA will be tweaked too.