Even for those of us who don't watch soccer — either men's or women's — it's impossible to avoid the media frenzy over the fact that the women's US Soccer team's World Cup victory.
This amazing performance from the women's team — we are told — highlights how absurd it is that the players on the women's team are not paid as much as the players on the men's team. Some fans and players even chanted "equal pay" in the wake of the World Cup victory.
When it comes to professional sports, however, how well a team plays is not what determines the pay of players. What matters is how much revenue the team earns from ticket sales, television deals, product licensing, and endorsement deals.
Revenues follow from the entertainment value of the play. When it comes to compensation, what matters is the ability of the players to entertain. Pro athletes, after all, are fundamentally just entertainers, no different from the buskers who do handstands on the street corner.
Some people may mistakenly believe that chasing a ball around constitutes some sort of highly-valuable enterprise in itself — but unless consumers are willing to pay to watch it, it has no large-scale economic value.
Thus, the question of whether or not the female athletes are "underpaid" comes down to how much revenue their performances generate.
So, do the women generate more revenue? Unless we're talking about just the last one or two years, the answer appears to be a clear "no." But even in recent years, as World Cup victories have piled up for the women, it looks like revenue have only just begun to equal that of the men's team.
At Forbes, Mike Ozanian note that generally speaking, men's soccer generates revenues at much higher levels:
The men's World Cup in Russia generated over $6 billion in revenue, with the participating teams sharing $400 million , less than 7% of revenue. Meanwhile, the Women's World Cup is expected to earn $131 million for the full four-year cycle 2019-22 and dole out $30 million to the participating teams.
But what about the US women's team specifically?
According to the Wall Street Journal:
From 2016 to 2018, women’s games generated about $50.8 million in revenue compared with $49.9 million for the men, according to U.S. soccer’s audited financial statements. In 2016, the year after the World Cup, the women generated $1.9 million more than the men. Game revenues are made up mostly of ticket sales. In the last two years, at least, the men’s tally includes appearance fees that opposing teams pay the U.S. for games.
So, very recently, women have begun to outpace the men in ticket sales. But, as the WSJ admits: "ticket sales are only one revenue stream that the national teams help generate."
And what about revenues from broadcasts? It seems that "TV ratings for U.S. men’s games tend to be higher than those for U.S. women’s games, according to data collected by U.S. Soccer."
Moreover, Politifact was unable to confirm that total revenue is, in fact, higher for the women in recent years:
During the three years following the 2015 Women’s World Cup, the women’s team brought in slightly more revenue from games than the men’s team did. While marketing and sponsorships are sold as a bundle, there are anecdotal signs that the women’s brand is surging in popularity.
However, it’s harder to say whether the women are ultimately paid less than the men, due to the lack of transparency and the complicated variables that feed into the compensation. Several experts said the reality may be murkier than a shouted catchphrase [i.e., "equal pay!"] can capture.
For the sake of argument, let's say the women do bring in more revenue. The fact this is such a recent development would help explain why the pay structure has yet to catch up with revenues. Moreover, if US Soccer is going to risk paying out-sized salaries and benefits, it's going to have to first be comfortable that the women's teams are a reliable and sustainable revenue source.
Ultimately, however, whether or not the women get "equal pay" depends not on the team owners, but on the consumers. If the women's team wants just as much pay, it will need to generate just as much revenue. That is, these things will need to happen:
1. The consumers are willing to pay at least as much ( in terms of ticket prices) to see women play as to see men play. They'll also need to watch broadcasts in numbers similar to men's broadcasts, thus driving up ad revenue for the women's team.
2. The women's teams will then generate more revenue.
3. Thus, female athletes will then produce more revenue than male athletes.
4. Female athletes are therefore paid more by the owners.
If the fans want the women to be paid more than the men, the consumers will have to spend more.
Even some of the players recognize this. Earlier this week, US women's team member Megan Rapinoe outlined how consumers can support a pay hike for the women's team : "Come to games ... buy players' jerseys ... become season ticket holders."
Rapinoe is right. When the consumers pay more to see the women. The women will be paid more to play.
Ryan McMaken (@ryanmcmaken) is a senior editor at the Mises Institute. Send him your article submissions for Mises Wire and The Austrian, but read article guidelines first. Ryan has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.
**This article was re-published from Mises.org (MisesWire)**