WNBA raises $75 million for digital transformation
The Women's National Basketball Association on Thursday announced the first outside investment in its 25-year history.
Why it matters: Even though fan interest and TV ratings are on the rise, the economics of women's pro basketball remains challenging.
- The total investment was $75 million, from longtime partner Nike and a group of more than two dozen individuals.
- Notable participants include Condoleezza Rice, Michael Dell, Laurene Powell Jobs and Joe Tsai.
What they're saying: Proceeds will be used to transform existing marketing efforts, particularly via digital platforms.
- "Our research has shown that fans of women's sports are the most digitally savvy, because they've traditionally had to work so hard to find content," WNBA investor Angela Ruggiero, a former Olympian who now leads the Sports Innovation Lab, said.
- "This investment will help the W continue to move toward where those fans are, and also to better connect with an existing market that's still untapped."
- Nike said its investment is separate from its WNBA sponsorship, and it likely will give the apparel maker greater control over how the league connects with consumers — something Nike excels at.
The big picture: NBA commissioner Adam Silver said in 2018 that the WNBA was unprofitable, with his league subsidizing the WNBA's $10 million average annual loss.
- More recent data hasn't been made publicly available, except that the WNBA hasn't reached financial thresholds that would trigger revenue sharing with players.
- The WNBA launched with eight teams and eventually expanded to 16, but is currently at 12. There have been some calls for new teams to be added, including because that could generate new franchise fees for the league.
The bottom line: Sports has become a trendy place for investors to park big dollars, particularly as streaming and digital content have created new avenues for growth.