Rapid Response: Caitlin Clark and the new WNBA, w/Commissioner Cathy Engelbert

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1:32I start out every meeting with my team with, the bold will win, everything must change, because we can't think about the WNBA of the past. We have to think about the WNBA of the future. That's Kathy Engelbert, Commissioner of the WNBA. Women's basketball is seeing an unprecedented boom, thanks to recent college phenoms like Caitlin Clark and Angel Reese. With the start of the WNBA season tipping off a week from today, I wanted to talk to Kathy about how she plans to capitalize on the buzz. If there's ever been a time for the business of women's sports to reach a new level of scale, it's now. The former CEO of consulting firm Deloitte, Kathy, shares her expansive strategy for this moment, plus how NIL deals have redefined the financial power of young stars, how she's dealt with crises like the pandemic bubble and the detainment of Brittany Griner, and more.

2:25Let's dive in. This is Rapid Response.

2:42I'm Bob Safian, and I'm here with WNBA Commissioner Kathy Engelbert. Kathy, thanks for joining us. Bob, it's great to be here. So the WNBA is clearly having a moment where a week before the start of the season, lots of excitement and expectations. I saw a report that 2 million people watched a fan's live stream of a preseason game, which is kind of crazy. How do you think about this moment and how you capitalize on it as a league, as a business, as a sport? I mean, it really is the confluence of a lot of positive elements on both the business and basketball side. Obviously, a huge rise of women's sports, but we've been saying that for four years and we haven't quite figured out how to capitalize on it.

3:31And now with generational talent, with big followings because of social media, increased media coverage, increased asset valuations, whether it's a patch on the uniform, a placement on the court, an ad buy, a media write fee, an evaluation of our teams, and then capital inflows. I think that's what's different. We brought in capital in February of 22. That's allowed us to work on expansion, increasingly a global platform. Marketing. We expanded by 20 times the number of marketers we have at the league since I joined. And the one thing I know, Bob, is that you need household names, you need gains of consequence, and you need rivalries because that's why people watch.

4:10And as you think about what happened off the NCAA excitement, March Madness, they had all three of those. You look back at the numbers for the WNBA and there was like a high watermark several years back and then it kind of receded, your audience numbers. So this moment is as much about the resources that you have around it as it is the talent. Or is this really like, this is Kaitlin Clark's moment. And, you know, that sort of sparked all this obsession. Yeah, I think coming off of last year's NCAA championship where a rivalry was created, right? Angel Reese and Kaitlin Clark, LSU and Iowa. And this year, I mean, the Elite Eight is a rematch of last year's national championship game with both those players and more.

4:55And then leading into UConn, Iowa, where UConn, you know, with Paige Beckers is a great rivalry building. And then Sunday was undefeated South Carolina and Camila Cardoso really emerging as a star who now went number three in the WNBA draft. So I think it's all these generational players with big followings, with great stories. And it's been, as you said, quite a moment, but it is something that we have to capitalize on, bring that fan in, that big sports moment fan, that fan that once we get them in, we know they're going to stay because our data shows that the quality of our game is so good.

5:31And now all the rookies coming in in this generational class. So it's great to have so many storylines to tell, not just one or two. the WNBA draft, which took place in Brooklyn, right near where I live. And getting tickets was like nearly impossible. It was like the Oscars, but with an orange carpet instead of a red one. Like, how do you think about the off-court cultural events as a way to drive attention? What was it like to be at that draft for you? Well, first for me, the room I am doing this podcast in is the room I did my first draft in my living room with my two kids as my stagehands. And to walk out on that stage and to read a pic and have fans cheering was extraordinary.

6:13And then just the merch sales coming off of that draft. I think Caitlin's jersey at the time was the most sold jersey of anyone in history on their draft night. And then Caleb Williams outdid that a couple of weeks later in the NFL draft. But look, a rising tide lifts all boats and we're happy to be leading here. There's been a lot of discussion from the draft and onward about the vast disparity in pay between the WNBA and the NBA. So how do you think about changing the economics of the business so that there's more parity there? Like how patient do you, do the players have to be? Yeah, I think, you know, we try to do business of basketball sessions with the players every year to talk about how sports works from a revenue perspective and expense perspective.

6:59And this is my old life coming into handy. I'm a CPA licensed in three states. And, you know, it's hard for players and the media and everybody to understand what we're building here and that we had to raise that capital to deploy it against things like marketing and expanding the league and working with our broadcast partners and globalization and bringing more fans into the funnel and a digital transformation. So it's hard for them to understand on the face of it why we are where we are. But we're also only going into our 20th season. You know, the men's sports leagues, most of three, three of the big four are over 100 years old in the NBA, obviously, in their 77th year.

7:42So they have a big head start on us. But we're trying to build something big here. We're trying to drive an economic model that's sustainable and that we're viewed as a legitimate sports media and entertainment growth property. And ultimately, we're building a revenue model to sustain this league for many years. When I joined the league, it was, I've been saying, we were like just surviving. And now we went from survive to thrive mode. Some of the complaints about WNBA struggles is in part because of the TV schedule that some people say is the worst TV schedule, the dates and times that other leagues don't want.

8:15How much do you think about that? How much is the sort of plan about improving that? Or do you think that's just like excuse when people talk about that? No, it's important. So again, I think in the last few years since I've been here, ESPN Disney has really stepped up, given us better and great windows, given us more ABC windows because we find when we're on ABC because we attract a more lifestyle viewer who may not be watching ESPN all day that we draw much better and the viewership is much higher. And I think they saw that, too, because they put, I think, for the first time last year and then repeated this year, the women's final game on ABC on a Sunday afternoon in a decent window at three o 'clock Eastern.

8:53So, yeah, we work all the time with our broadcast partners, but still work to do because we compete in an environment in the summer with other sports as well. Right now, we're competing with both NBA and NHL playoffs right now and the start of the MLB season. So you're always going to be competing with other sports properties. But again, when I joined the league, I was told less than 5 % of all media coverage of sports is covers women's sports. I mean, if people can't find you, therefore you're at a disadvantage. So I think I heard this statistic the other day is 15%. So we've been helpful in moving that from 5 to 15, which is a pretty Herculean move, given the denominator of these percentages is so large.

9:34You know, the whole media landscape's being so disrupted. And you think about a digital native fan. I was like struck by, I was watching the NCAA on traditional linear. I haven't cut the cord. And my son was in the other room and he came in at one point, my mom, did you just see what Angel Reese did. And he's just watching, you know, an eight second clip of that. And I'm watching the whole game. So we need to meet our fans and digital and social and obviously linear and streaming. And we have to be very multidimensional in the way we think about meeting our fan where they are, because we want to draw in that younger fan, you know, make sure that they're seeing our game too and our players.

10:14As you're drawing in the lifestyle viewer, it makes me think of the way Taylor Swift has worked for the NFL about, you know, drawing in a different kind of fan. Are you looking at sort of Caitlin Clark as like your Taylor Swift? People are lining up for fever tickets, whether they're home or away, moving to new arenas to be able to get more fans to go watch her? Yeah, I think that's an important move by some of our owners to move some of their games to bigger arenas. This is the moment to make sure that you can sell as many tickets, premium as many fans, and then keep them. And a couple of our teams have already sold out their season ticket holder allotment.

10:57Individual tickets are now going on sale and they're selling really well. And again, we have to think differently. So one of the things I'm proud of our owners thinking differently about how to approach this season. And Dallas just announced, for instance, they're moving from UT Arlington, where they play their games in a few years to downtown Dallas to accommodate more fans. It'll have more seating capacity. And I start out every meeting with my team with the bold will win. Everything must change because we can't think about the WNBA of the past. We have to think about the WNBA of the future.

11:30Just as Caitlin Clark has to raise her level of play game after game, especially now that she's a professional, Cathy has to get the whole WNBA league to keep raising its game. It's a challenge every business has to embrace that what got you here won't get you there. After the break, Kathy takes us through several crises she's had to navigate from Brittany Griner's arrest in Russia to the pandemic shutdown, plus her lessons in making the leap from Deloitte to the WNBA. Stay with us.

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13:38So if you're scaling, make it simple with Deal. Go to deel.com slash mos and get up to three months free. Before the break, WNBA Commissioner Kathy Engelbert explained how she's trying to capitalize on a moment of opportunity for the league. Now she shares lessons on managing crises from Brittany Griner's jailing in Russia to pandemic shutdown, plus the impact of college NIL deals and the pipeline of opportunities she sees ahead. Let's jump back in. You mentioned that you sat down with players to help them understand the economics of the business. A lot of them had to or chosen to play overseas in the offseason to be able to generate incremental revenue.

14:27How do you talk to the players about that piece of it? How did the Brittany Griner crisis impact you, which was because she was playing overseas? Is that something you had to leave to the U.S. government or do you get involved in any of that? Oh, we were hugely involved with the State Department, the Special Presidential Envoy of Hostage Affairs. I always tell people when you're managing in a crisis, the lessons you learn in that, you'll be talking about for a decade. And that was the case in the financial crisis when I was at Deloitte. That certainly was the case during the pandemic and certainly in the Brittany situation.

15:02So you just never know where these roles are going to take you and who you're going to be talking to. And we would get off the phone with the State Department where we had a call once a week. And, you know, there's certainly that narrative out there around why Brittany was there. Now, we're never going to tell our players what they can do or not do in the offseason. So certainly it's their prerogative to play. And many of our players who may not get a lot of playing time in the W during the season want to develop and they want to make a roster the next year and they know they need to improve. But for stars like Brittany, you know, it did provide an opportunity for her.

15:36I think the tide is changing given NIL and the college ranks and what players are able to do with building a big following and getting corporate partners before they even come into the professional ranks. So that's changing a little bit, but we're never going to tell players they can't do something in the offseason. We do have the opportunity now and have taken advantage of that to pay players in the offseason marketing dollars from the league. It was collectively bargained back in 2020. We have players like Enrique Angumbuale and Jewel Lloyd under those agreements. They're getting a lot of exposure to our corporate partners.

16:10You see them in commercial ad spots, whether it's for AT &T or State Farm. So really excited about what's happening with our players getting a lot more endorsements. The new NIL rules, the name, image, and likeness rules, it means that some college athletes can make as much as professionals or even more given that the size of the TV audience and live fans for the games are so enormous. Do you have to think about that differently? Like you're competing with it or there may be players who are sort of earning less when they're becoming professionals than when they played in college? Or is that not necessarily happening?

16:50Yeah, that's not happening because nobody ever looks at just a base salary and a proxy of a CEO. You look at base plus bonus plus stock compensation plus other. And the endorsements, all NIL is in the pros at endorsements. And Aaliyah Boston has said this. I think Caitlin and Angel and Cameron Brink, who were big NIL wage earners, are seeing more opportunities when they come into the professional ranks. Because again, they have a more national and global footprint than they even had before. And without playing professionally, they don't carry those into their professionals. So I know you probably know that Caitlin just signed the reported deal with Nike.

17:30She already had State Farm, which was signed last year during her last year at Iowa. And I always wondered why our players didn't have a lot of endorsements when I first joined the league. And I think the marketing angle of a WNBA player is very powerful, especially if 80 % of every household consumer purchasing decision in the United States is made or influenced by a woman. Why wouldn't you want an endorsement with a woman and a professional athlete who is a great role model for both boys and girls. I mean, watching the NBA and NHL playoffs, you look at the ad buys by these brands, a lot of WNBA players are showing up.

18:05You took on the WNBA commissioner role coming over from Deloitte. That transition, I imagine, was fun, exciting, complicated. How has the journey been what you expected? How did you go about making that transition? Yeah, it's a really interesting question. And I've been very reflective of what I walked into, where we are today, going from running a firm of 100 ,000 people where I had all the resources I could ever want in capital, human and financial, coming into a league of 144 with very little human capital and financial capital was a little bit of a shock to the system. However, I will say sports is big business.

18:47Big business is about relationships. So the business side of this, building a business, a revenue model, a sustainable economic model is not that different. The difference is the stakeholder groups are different. There's a players association. And then we have owners now 13 with Golden State, media fans, officials. So the stakeholder groups are very, very different, but the business side is not that different. So So it is different, though, again, hitting the pandemic right after I started, then George Floyd, a racial crisis in this country. Then we got thrown in the middle of a political battle in Georgia with one of our owners, then Brittany Greiner.

19:25And now it's like now it's basketball. It's basketball. It's the players' personalities. It's the storytelling. And I'm thrilled with where we've come from. When you go through that list of crises over the last few years, are there things that you learned that were different than what you had learned in your time running Deloitte? Or were you applying the things that you learned at Deloitte? Yeah, really good add there, Bob, because I think one of the main things is in a crisis, all your weaknesses get amplified. But it's also a time to fix them because everybody else typically is dealing with their version of whatever crisis is.

20:08But you definitely learn things. You learn that it might be a time to invest. It might be a time to do things that are counterintuitive. And I was so blessed to have a 33-year career at Deloitte and learn how to scenario plan. I'll never forget when the pandemic hit, my team's like, well, we can't have a season. I go, oh, no, we're going to put five different scenarios together. We're going to present it to the players, the owners. Obviously, it was existential for us to have a season that year because we don't have a season and we're out of the sports landscape for 20 months. We may not be, I may not be the commissioner right now.

20:39We may not be around at all. And there's nowhere for Caitlin and Angel and Cameron and Rikia to play. So yeah, in the middle of this crisis, you draw on everything you ever learned. I always said those first couple months right after the NBA shut the sports world down, I never worked so hard in my life. I was working so hard. you know, you pull all nighters when you do an IPO or some kind of big transaction with your clients when you're at Deloitte. Yeah, this was like that, but for two straight months and not a hugely emotional person, but pretty emotional about what's going on in women's basketball today as a result of now giving these players a professional sports platform here in the U.S.

21:20And look, it comes a great responsibility to be the longest tenured women's professional Sports League in the United States, the WNBA, double any other entering our 28th season. So yeah, I didn't really process it at the time, but yeah, that was pretty big. And when you talk about like the existential threat, you know, it almost sounds like you're a startup, even though you're around for 28 years. And I know that that was a pandemic moment, but in general, do you think about the business of the WNBA being like on that cusp that you always have to, you know, think about survival that you can't necessarily take anything for granted?

22:01Oh, I still do. My team knows I'm never satisfied. You know, we'll have a great financial year, great business and basketball year. But I'm like, oh, no, let's keep going. Let's stretch. Let's make sure we're not resting on anything. Because when I joined the women's sports, someone said to me, Kathy, this is like pushing a big boulder up the hill. And you're to inch and inch and inch, and you're going to feel like you never get it to the top of the hill. Well, we're pushing it to the top of the hill, and hopefully we're going to experience, I think, over the next decade, kind of the golden age of the WNBA.

22:33And by the way, it's not just Caitlin Angel in this class. Think about next year we have Paige in her class, then Kiki Rice of UCLA in her class, and then Juju Watkins and Hannah Hidalgo and whoever else emerges over the next three years who were freshmen this year, breaking records at their respective universities. So I'm so blessed to be in women's basketball, to see this pipeline, because I do see the next decade being, you know, a total moment for this league to continue that momentum and to continue to bring in more fans, both here in the U.S. And we have a lot of low-hanging fruit globally, too, especially for young girls to see role models like WNBA players playing professionally is a really important thing because we know the one thing I know that, you know, I played two sports in college, lacrosse.

23:20I was recruited for lacrosse. I was a walk-on for basketball that, you know, girls who play sports end up being leaders. I think there's a stat out there that 90 % of the Fortune 500 female CEOs played organized sports, at least through high school. It builds your agility. It builds your ability to team. You know, it builds leadership skills. And mostly, because now I see this 38 years into my career, it builds confidence in young women to, again, compete in an otherwise very male-dominated world. Well, Kathy, this has been so great. Thank you so much for doing this. Thank you, Bob. Tip-off's coming up, May 14th.

24:00I'm really rooting for the WNBA. It's amazing how far the league has come, but also how fragile it still is. Every business, every brand can struggle with making the most of an opportunity, can find themselves reliant on a handful of key talent. But those moments of liftoff are also often the most exciting. I'm sure going to watch a lot more WNBA this year, and we'll see what happens. I'm Bob Safian. Thanks for listening.

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26:17Thank you.