Why The National Women’s Soccer League Is Poised For Explosive Growth
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Why The National Women’s Soccer League Is Poised For Explosive Growth
Huddle Up is a 3x weekly newsletter that breaks down the business and money behind sports. If you are not already a subscriber, sign up and join 100,000+ others who receive it directly in their inbox each week.
Today At A Glance:
The National Women’s Soccer League is having its best year ever as a league and is growing fast. The NWSL has made a ton of big moves lately, including the addition of two new expansion teams by 2026, record-breaking attendance, and an impending new TV deal. This newsletter will examine the business and money behind the NWSL.
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Friends,
When FIFA released its 2022 annual report, one thing stood out above everything else.
Soccer’s global governing body talked about the upcoming World Cup cycle. They detailed how the business is looking to grow annual revenue and even walked people through potential leadership changes that may be on the horizon.
But FIFA’s annual report also specifically pointed out the growth of women’s soccer.
"Woman's football is on a growth trajectory unlike any other sport in this world,” said FIFA’s chief women’s football officer Sarai Bareman. “It's the biggest growth opportunity that FIFA as an organization have today but more importantly, our sport, football, has today. It's the biggest growth opportunity there is. And you don't have to look too far back to see the indicators of that growth.”
And the data backs it up. A friendly between the United States and England at Wembley attracted nearly 78,000 fans and sold out within 24 hours. A UEFA Champions League quarterfinal match set the all-time women’s sporting event attendance record with 91,000 fans at Camp Nou. And FIFA surveyed nearly 300 clubs, discovering that broadcast and commercial revenue was up 22% and 33%, respectively.
The best example of the growth of women’s soccer is the National Women’s Soccer League (NWSL).
The NWSL is one of the world’s most competitive women’s soccer leagues. The US-based competition kicked off in 2013, and there are currently twelve teams. Each team plays 22 games from March to October/November, including a 6-team playoff and a midseason tournament where all NWSL teams compete for a $1 million prize pool.
But the most impressive part about the NWSL is the league’s recent growth.
Take attendance, for instance. The NWSL still has four weeks of play left in its season, but the league has already broken its attendance record with 1,060,978 fans through Week 18. Additionally, the NWSL has had 11 regular season matches with 20,000+ fans.
This is especially important because ticket sales account for ~50% of NWSL revenue.
The average NWSL team also has 37 sponsorship deals, and the league says 2022 sponsorship revenue was up +87% compared to 2021. And viewership is also improving, with 915,000 people watching the 2022 NWSL championship game on CBS.
“When we were given CBS as the stage, we either competed with - matched or even outperformed - the MLS. Facts over feelings. When we're put on that stage, the fans show up,” Reddit co-founder and Angel City FC owner Alexis Ohanian told Reuters.
2022 NWSL TV Viewership
2022 NWSL championship game (Portland Thorns vs. KC Current): 915,000 average viewers on CBS in primetime (+71% increase YOY)
2022 NWSL regular season viewership on CBS: 349,000 to 461,000 viewers
The NWSL also recently signed its first-ever collective bargaining agreement with the NWSL Players Association. The deal increased the salary cap from $1.1 million to $1.375 million (+25%) — Trinity Rodman is the NWSL’s highest-paid player with a 4-year, $1.1 million deal ($281,000 annually) — and it increased average compensation for players by 30% to $54,000 in 2022.
The introduction of player free agency
Four weeks of severance pay along with one month of housing and health insurance for waived players
Increase of minimum salary by 60% from $22,000 to $35,000 with 4% annual increases
Revenue sharing for players that includes 10% of net broadcast revenues IF the NWSL is profitable in the third, fourth, and fifth years of the CBA
Up to $300,000 per year for group license image rights
Six months of paid mental health leave
42 days of vacation and a 7-day summer break during the regular season
Eight weeks of guaranteed leave for birth or adoption with access to nursing facilities
Prohibition of games being played on fields that need "substantial conversion to the dimensions of a soccer field” (e.g., a converted baseball field)
These tailwinds have many people believing that the NWSL will soon drastically increase its media rights revenue — the league is currently in a 3-year, $4.5 million deal with CBS ($1.5 million per year — and franchise valuations are saying it too.
The average NWSL team still only does $3 million to $4 million in annual revenue and is not profitable. But Bay FC recently paid a $53 million expansion fee, and Angel City FC has seen its valuation increase from $5 million to $100 million in just three years.
NWSL Team Valuations
Angel City FC: $100 million
Bay FC: $53 million
Gotham FC: $40 million
Chicago Red Stars: $35.5 million
Washington Spirit: $35 million
Now, many people would say these valuations don’t make any sense. Most professional sports teams across the NFL, NBA, MLB, and NHL would trade at a 4-8x revenue multiple (i.e., you multiply annual revenue by 4-8x to get your valuation).
This number is higher for high-growth leagues like the NFL and NBA and lower for slower-growing leagues like the MLB or NHL.
But revenue multiples don’t work for the NWSL. That’s because the league is too small and too new to approach in a formulaic manner. These owners know there will eventually be a cap on supply (# of teams), and the potential media rights growth within the world’s most lucrative sports market (United States) presents solid upside.
So be on the lookout for women’s soccer. The distribution of women’s sports in general has picked up over the last few years, and I think the NWSL is in a perfect position to capitalize on an increase in interest over the next decade.
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I hope everyone has a great day. We’ll talk on Friday.
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Huddle Up is a 3x weekly newsletter that breaks down the business and money behind sports. If you are not already a subscriber, sign up and join 100,000+ others who receive it directly in their inbox each week.