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Case Study Raise the Cap? (Case Study Sample)

Case Study Raise the Cap? [] Introduction Women athletes and organizations in every American sporting arena have traditionally been underpaid, undervalued, and under resourced -- so much so that women athletes often approach their domestic careers like a part-time gig, supplementing their income by playing overseas. In the WNBA, even star players make more in foreign countries during the off-season than with their domestic franchises. However, this drive to compensate for disparity in pay with their domestic teams can have far-reaching and unintended consequences for players and their families. In the process of travelling back to the US after playing in a Russian Women’s basketball league, WNBA star and Olympic gold medalist Britney Griner was sentenced in August 2022 to nine years in a Russian prison after pleading guilty to possessing less than a gram of cannabis oil in June. There are multiple layers to consider in this situation: is Russia using an American celebrity as a political pawn? What circumstances led Griner to seek off-season employment in Russia? While the Brittany Griner situation deserves its own ethical unpacking, it is important that we look beneath the surface and examine the causes and viable solutions for the financial inequities in Women’s sports. Events such as Griner's arrest highlight the far-reaching consequences of pay disparity in women’s sports, with consequences for human freedoms and geo-politics. Would Brittany Griner even be in Russia if there wasn’t such a low salary cap in the WNBA? Could situations like this one happen again to other players? Are players sufficiently protected? If not, what will the stakeholders involved do about it? In particular, what responsibility does the current WNBA commissioner have to balance the fiscal realities of the league with the increasing calls for parity in pay for women players? Background As women began to demand more out of the world, they were met with frustrations and hardships until Title IX was passed into law on June 23, 1972, by President Richard M. Nixon. Title IX broke barriers for women, especially in women's sports. In 1972, according to an article written on the History networks web page, updated in 2021, "In 1972, just over 300,000 women and girls played college and high school sports in the United States. Female athletes received two percent of college athletic budgets, while athletic scholarships for women were virtually nonexistent."[] By 2012, the 40th anniversary of Title IX's passage, the number of girls participating in high school sports nationwide had risen to more than 3 million. More than 190,000 women competed in intercollegiate sports—six times as many as in 1972. By 2016, one in every five girls in the United States played sports, according to the Women's Sports Foundation. Before the passage of Title IX, that number had been one in 27.[] The past four decades have seen enormous growth in women's sports and increased advocacy regarding the importance of these sports' role in the development of building confidence in young girls. However, as those young girls grow into women who want to use their athletic talents as careers to build wealth for themselves and their families, we find ourselves at a crossroads, and there are increasing demands for equitable pay for women players. In recent years, there have been multiple instances of women fighting to earn fractions of what men make in various sports. The most globally known settlement case in the fight for equal rights in Women's sports stemmed from the recent Women's U.S. soccer team's discrimination lawsuit led by many of their most influential players. The players came together with evidence that proved their case and led to winning their case for equal pay. According to a New York Times article, "under the terms of the agreement, the athletes will receive $24 million and a pledge from the soccer federation to equalize pay for the men's and women's national teams." This was a monumental victory for the Women's soccer league and sent a clear message to the U.S. about taking Women's sports seriously. However, it wasn't a strong enough siren to decision makers across all sports; gaps in pay persisted, particularly in the WNBA.[] The WNBA was founded relatively recently, in 1996. Looking at the present state of the league, marketing and equal pay in the sport are lacking at best. The gap in pay between NBA and WNBA players is well-known and has been depicted in many forms across social media through memes. The most well-known meme is the comparison between Sue Bird and LeBron James, which caused quite a conversation for those who had not seen the stats and realized that they are similar in career accomplishments. Comparing Sue Bird and LeBron James, both talented athletes, leads us to more extensive questions about not only how we got here and why we got here, but also the path forward.[] The current situation Cathy Engelbert, the current commissioner of the WNBA, is an accomplished American businesswoman by any standard. Before taking on what she calls her “second act” as commissioner of the WNBA, Cathy had a distinguished 33-year career at Deloitte, including serving as the first female CEO from 2015-2019,. Cathy is taking the helm of the WNBA at a time when franchise values are not increasing, game attendance is down, and media rights fees are stagnant. Beyond the business fundamentals, the WNBA has become a core stakeholder, through player activism, in the fight for racial and gender equity. While committed to addressing the questions around equity, Cathy sees the WNBA as a growing business that she can transform and catapult to the next level. In her own words, "It's not going to be easy, I have a plan, and I'm already working on it."[] [] [] The rules of how the WNBA functions can be found in the WNBA collective bargaining agreement. The collective bargaining agreement is an agreement between the WNBA and the WNBA Players Association; it covers topics including how the league deals with and administers compensation, salary caps and disciplinary actions. In the WNBA the salary cap represents the total amount of money a team is allowed to cover the salary of all players on a team. Unlike many other sports franchises, the WNBA salary cap is fixed and there is very little wiggle room. For 2022, the team salary cap is $1,379,200. For individual players, there is a maximum base salary that counts towards the salary cap. There are two types of maximum base salaries, a standard maximum and a higher maximum, often referred to as the super-max. For 2022, these are $196,267 and $228,094 respectively. In contrast, for the 2022-2023 NBA season, the salary cap is set at just over $123 million, with some exceptions. Of course, the NBA has been around much longer than the WNBA, has several highly profitable franchises, media rights contracts and an arguably larger viewing audience and fan base. In fact, the NBA and WNBA have few things in common besides the actual game of basketball.[] [] [] [] A fundamental question to be asked when the increase of a salary cap is being recommended is whether it is fiscally possible to institute such a policy. In the case of the WNBA, if the question of profitability is raised, the answer would be that the league is not profitable. The WNBA generates about $60 million in revenue per season, but operating costs total approximately $70 million. The WNBA has lost money every year since it was founded. To cover the deficit, the WNBA is actively subsidized by the NBA. This has a direct impact on how much the league can pay its players. For example, about 20% of the revenue generated in each WNBA season goes to cover players' salaries. This is in contrast to the NBA, where about 50% of the revenues pay for players’ salaries. Of course, the NBA with annual revenues of $8 billion and solid profitability, has a lot more money with which to work. The WNBA has taken some steps to improve the players' bottom line. In the 2020 collective bargaining agreement, a revenue-sharing mechanism was announced and was considered one of the bets Cathy was making on increasing the value of the league. This is expected to improve the amount that players can take home, with one agent suggesting a top player could take home upwards of $1 million between salaries, bonuses, marketing agreements and money from the revenue sharing scheme. Another point to consider when it comes to equity is the ratio of players to coaches' salary. In the NBA, top players usually make multiples of the head coaches whereas in the WNBA coaches make multiples of the top players.[] [] [] [
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