Today’s Headlines: US Women's Soccer Team Battles Wage Discrimination

Economic News you can Use

Today’s Headlines: US Women's Soccer Team Battles Wage Discrimination
April 5, 2016

Wage Discrimination on the Soccer Pitch

Gender inequity in pay is nothing new. According to the Bureau of Labor Statistics (BLS), women earned less than 60 cents on average for every dollar that a man earned throughout most of the 1960s and 1970s. The pay gap has decreased since then, but has stalled since 2001 at around 77 cents in women's income for every dollar that men earn.

The battle for equal pay took an interesting new turn last Thursday. The highly successful US Women's Soccer Team filed a complaint with the Equal Employment Opportunity Commission (EEOC), alleging wage discrimination by the United States Soccer Federation (USSF).

All parties agree that there is pervasive wage discrepancy in the sport. Women on the US National Team make approximately 40% of the salary of the men's team. In the US pro leagues, the problem is worse, as the National Women's Soccer League (NWSL) caps annual pay at $37,800 per player while men of Major League Soccer (MLS) earn an average salary of over $300,000

At the world level, the pay gap is also yawning. The US Women’s team brought home $2 million in winnings from FIFA for their 2015 World Cup Championship, while the US men were awarded $9 million for their 11th place finish in 2014. The championship men's team from Germany earned $35 million. Bonuses and appearance fees follow a similar pattern.

The underlying question is whether this discrepancy can be justified by differences in revenue generation. It's reasonable that a sport generating less revenue would provide correspondingly lower pay to its players. Worldwide, the men's game is significantly more popular and draws better crowds than the women's game. However, the US women present a clear and uncomfortable exception to this rule.

Higher Profitability but Lower Pay

To Jeffery Kessler, attorney for the US Women’s team, this is a straightforward case. He explained his position on ESPN radio’s "Mike and Mike" morning show on Friday. US law and recent economics, he said, both dictate that the women's salary should be comparable to the men's. Yet the women's soccer team netted $16 million in profit, while the men's team lost $2 million.

This information is not easily deduced from the USSF financial statement for fiscal 2015. The revenues are not broken out between the men's and women's game in the statement, but the USSFs collective revenue is listed at almost $101.8 million, with $34 million of that coming from the game revenues of the two national teams and $37 million coming from "sponsorship, television, licensing, and royalties."

However, the expenses are allocated separately in the notes. The men's team had expenses of just over $31.1 million and the women's team had approximately $10.3 million, presumably with salaries as the major component. (Combined expenses such as equipment and supplies, event management, player development, and youth national teams racked up another $28 million.)

Critics argue that the women's team agreed to the lower pay terms as part of their collective bargaining agreement with the USSF, and therefore they have no reason to complain. The ladies have a right to strike to meet their goals, or choose a different profession. Kessler countered by noting that gender discrimination cannot be written into a collective bargaining agreement in the first place. Other matters of inequity surface in the collective bargaining agreement such as differences in accommodations and the quality of fields for games.

A Broader View

The USSF counters with evidence of their support of the women's game, including $1.4 million in support of the NWSL, which is struggling to avoid the fate of two previous leagues. They also claim that the women's broader conclusions are based on a period of time that is a fiscal outlier. According to a USSF spokesperson, the men's team revenues over a multi-year period were approximately double that of the women.

According to the Wall Street Journal, the USSF expects the women's national team to generate $17.6 million over 27 matches of "event-based revenue" in fiscal 2016, compared to $9 million for 12 matches for the men. Given that the average event attendance for the men's national team was 29,871 compared to 16,229 from the women (averaged from 2011 to 2015), it does take more events for the women to generate the same revenue.

Collective USSF profit for 2016 is expected to be $17.7 million. The trend of the women's superior profitability is expected to continue in 2017 with the women's team producing $5 million in profit that counteracts a projected $1 million loss by the men's team.

TV rights are lumped together in the finances, but, for comparison, a 30-second ad for the women's final in 2015 cost around 45% of a spot in the men's final in 2014, in which the US did not participate.

The USSF does have a point in that from the 2015 World Cup through the upcoming 2016 Olympics is a peak revenue-producing period for the women's team. Revenues are likely to fall in the years between the 2016 Olympics and the 2019 women's World Cup, while the men will take center stage in the 2018 World Cup. Still, the degree of discrepancy seems to far outweigh the percentage of revenue generated — depending on how one untangles the financial reports.

The Takeaway

It would be wrong to call the EEOC case a slam-dunk for the US Women's Soccer team, and not just for mixing sports metaphors. Agencies can be unpredictable in their actions. Even so, the US Women's Soccer Team has a seemingly strong case, given that they have a clear pattern of sustained success in world competition and are now outperforming the men in profitability. The long-term revenue picture is still arguable.

An EEOC ruling in favor of the women's soccer team is unlikely to have repercussions for the NWSL, or other women's sports like the WNBA, because those leagues legitimately bring in less revenue and are less popular with consumers and sponsors compared to their male counterparts. In those cases, the battle is to gain the popularity that brings in large TV contracts, more ticket revenues, and greater corporate sponsorships.

The women's soccer team may be a high-profile case, but it is only one of many areas in which gender pay inequity for the same job exists. Perhaps this will spur further actions, and the momentum toward equal pay that stalled in the 2000s can be revived as we approach the 2020s — especially with the very real prospect of the first female American President taking the oath next January.

Photo gettyimages/VictorDecolongon

  Conversation   |   11 Comments

Add a Comment

By submitting you agree to our Terms of Service
Erin | 04.06.16 @ 18:01
This is really disappointing, but not at all surprising. This kind of discrimination seems to be occurring everywhere, and I don't think it will be changing anytime soon.
Steffanie | 04.06.16 @ 18:02
Women being paid less is such the 'norm' in society. I hope they are able to win and get money they deserve.
STOKES | 04.06.16 @ 18:03
It's ridiculous that the women's team is basically subsidizing the men's team and makes a fraction of the salary.
Jonathan | 04.06.16 @ 18:03
As sad as it is its obviously evident.
Sarah | 04.06.16 @ 18:03
I've been keeping slight tabs on this. it's sad but not unexpected. though, even what the women make seems a little extreme to me... they are just playing a game....
Carla | 04.06.16 @ 18:04
With the womens teams proffitting more than the mens by that much, I'm very surprised by the gap in pay. It is time that we are equal.
trish | 04.06.16 @ 18:05
I have never understood how and why the salaries are different for the same sports. The difference in pay is astounding. and disappointing. We need to change this.
Bobbie | 04.06.16 @ 18:05
I understand less pay if the games are not as popular and bringing in as much money, but if the games are bringing in as much money as the men, then yes, they should get equal pay.
Ron | 04.06.16 @ 18:09
The worse part is the Women's team has won the World Cup and consistently outperforms their male counterparts and they still get paid almost a tenth of what the men make and that is IF they win.
Heather | 04.06.16 @ 18:10
There is a huge pay discrimination withvme and women. Women's soccer has been more sucessful than men's and yet they are paid much less. Its time for equal pay!
Brittany | 04.06.16 @ 18:11
That is actually really sad but at the same time, not surprising
$commenter.renderDisplayableName() | 10.22.20 @ 03:15