How WNBA Commissioner Cathy Engelbert is Seizing Soaring Momentum

0:00Tuesday on NBC, Jimmy Fallon and Bozma St John host the highly anticipated new competition show. I hired 10 creatives from all walks of life. They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea. This is not play play. We're spending millions of dollars. I'm so excited to embark on this adventure with all of you. Make the best idea win! On Brand with Jimmy Fallon. Series premiere Tuesday on NBC. Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, emerge from your hot dog coma with a special interview episode from MBD.

0:39You'll hear from the head of one of the fastest growing businesses in the world, WNBA Commissioner Kathy Engelbert. It's Friday, July 5th. Let's ride.

0:53The WNBA is on a roll. Now in its 28th season, the league reported its highest attended opening month since the 90s and had its most watched start of the season across TV networks. It's clear that Kaitlyn Clark and the rest of a star-studded rookie class is drawing a lot more eyeballs to the WNBA. So how do you capitalize on that momentum? There's no better person to ask than the commissioner self, Kathy Engelbert. She joined Morning Brew Daily to talk the Kaitlyn Clark effect, how she plans on fixing low pay for players, and career advice from her 33 years at Deloitte, where she rose to the ranks to become CEO.

1:28It was a fascinating conversation about a business that finds itself at the center of so many emerging trends and how a leader thinks about navigating them. You're gonna enjoy the heck out of it. But first, a word from our sponsor, Meta AI. No one likes a know-it-all, but sometimes a know-it-all can be helpful. Yeah, we go to Trivia every Wednesday and it would be very helpful to have a know-it-all around, actually. You kinda are my know-it-all, Neil, but when you're not around, I use Meta AI. Even though we spend a lot of time together, I spend more time with my phone and accessing Meta AI is as easy as opening Instagram or WhatsApp and just asking it a question.

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3:06You should not receive a live vaccine when treated with EPCLIS. Before starting EPCLIS, tell your doctor if you have a parasitic infection. Searching for real relief? Ask your doctor about EPCLIS and visit ebclus.lily.com or call 1-800-LILY-RX or 1-800-545-5979. Kathy, thank you so much for jumping on Morning Brew Daily. It's great to have you. Great to be here. So the league has had this incredible amount of momentum right now, setting viewership, attendance records left and right. We liken you to Zoom in 2020. And I'm sure the number one thing on your mind right now is how do we capitalize this?

3:42How do we keep it going? So strategically, how do you approach seizing this momentum and turning it into sustainable growth for the league for years and then decades to come? Yeah, it's actually, you just hit one of my talking points around, We're trying to set this league up for decades, not just for this moment. And quite frankly, we've been preparing for this since I came into the league and we raised capital in February of 22, first women's sports property to do that. And I just felt this big responsibility as the longest tenured women's professional sports league in the U.S. by double any other now in our 28th season to really capitalize on this.

4:19we're really hitting the confluence of all these positive elements, generational players coming into the league with big brands. And that's been the positive of the NIL in college is a lot of followership coming from college into the WNBA. And we're so blessed. It's not just this year's amazing rookie class, but the next three to four years that we can see are amazing. And they're going to have amazing brands coming in. So to continue to look at a decade out is exactly how we're looking at it. But women's sports has been underinvested in for too long. I think we're going to capitalize on that.

4:53We're seeing that in expansion. We're seeing that in all the calls we're getting for private equity and individuals who want to either own a WNBA team or part of the WNBA. So it's kind of an interesting time to capitalize on all this momentum. But I will tell you, having a long career in business before I got here, 33 years before I got here, sports is It's literally not that different. It's a big business and we have to invest in it. We have to market it and marketing. I'm a big studier of history. You know, is this, you know, Angel, Caitlin moment, our bird magic moment. And I watched the NBA draft the other night.

5:28And it's just like, as you see these in this next generation of talent coming into the league, it's it's great to see all the new fans we're bringing in to the league. And they're realizing like the level of play is really good and they're staying. So that's a good part of it. Yeah, right now. I mean, it seems like college basketball is maybe bigger than the WNBA in terms of viewership and attendance and interest around it. So what are you looking at college basketball doing something right that you would love to port over to the WNBA? Well, you need three things in sports, in my view, to get people to watch, especially women's sports.

6:04You need household names. You need rivalries and you need games of consequence. And what you see during that three-week March Madness and why those numbers are so big, one, great level of play, rivalries, household names. In the women's game, they're not one and done. They're staying for four years. So, therefore, people get to know them. And also, I mean, huge games of consequence. Survive and advance, right, in the March Madness tournament. So every game is a game of consequence. And we play a 40-game season. And obviously, we're not going to pull that number, but we've been pulling incredible numbers.

6:36I mean, to be three million over Pete last Sunday for a fever Chicago game shows the beauty of a rivalry that spawned out of college into the WNBA. And we're able to sustain that, you know, larger than any regular season NHL or MLS game, by the way, for a regular season game. So although that's that was just a regular season game, we're proving that rivalries and marketing around those rivalries will get people to watch. and the human interest stories and what these players represent on and off the court is all playing well. And kind of the WNBA, it's been interesting, sits at this intersection of sports, culture, society.

7:14There are women in the workforce, just like I am, but people don't view professional athletes that way. And so we're just a microcosm of broader society from that perspective. Yeah, that is a great segue into my next question, because for the first time this season, the WNBA is a part of the national conversation. I mean, you turn on ESPN, Stephen A. Smith is talking about the league. You open the newspaper, it's on the front page. But often, like you said, the chatter's not really been about basketball and it's more focused on topics like race and gender. With the WNBA being used as this political weapon, do you worry about these controversies overshadowing the product on the court?

7:51Yeah, I don't because we know, you know, when I came in the league, we set a strategy to be player first, stakeholder success, that includes our owners, the media, everybody around us, and then fan engagement, make it easier to be a fan. So I don't worry because that sits on the foundation called the game, and the game has never been better. I mean, we only play 40 minutes, not 48. With a 24-second shot clock, that's 17 % less. And our players are putting double-doubles and sometimes triple-doubles up every night and putting 90 points up, sometimes 100. So, I mean, in 40 minutes, that's pretty Herculean.

8:24So I'm not worried about the quality of the game. It speaks for itself. I think these players do our role models in the communities in which they live and work. I mean, we just got off our Commissioner Cup championship where we made donations to civic engagement, especially in an election year. That was important to our players. And I think they understand that they represent these role models in in their communities. And they do a ton of work with youth basketball because the one thing we know and I certainly know because I was a Title IX kid growing up when Title IX was first passed, is that, you know, if you play organized youth sports, at least, you know, through middle school into high school, you're going to be a better leader in the future.

8:59And we need more women leaders. So I think our players are happy to take on that off the court stances that they take sometimes edgy, but you know, women's sports has arrived. And as one of my owner calls us a growth stock. And I love that from my prior life. I love being called a growth stock and, you know, we're no longer looked at. I think when I came in the league, some people were like, are you guys a charity. No, no, no. We're a growth stock now. We're a legitimate sports media and entertainment property. So you've already mentioned Magic and Bird a little bit. To what extent do you look at the NBA as a role model for growth and how close would your ideal relationship be with the NBA?

9:36In other words, are you trying to be the women's version of the NBA or are you trying to build this more distinct version of yourself as a distinct league? Yeah, we're definitely, we benefit hugely from having that big brother. It was the NBA and David Stern and Adam Silver who launched the WNBA off the 96th Olympic gold medal for their women, which by the way, this year in Paris, that streak has continued. They're going for their eighth consecutive gold medal, the USA Women's Senior National Team. So we're hugely benefit by being associated. And there's a reason why we're the longest tenured women's professional sports league in the country and is because of our big brother NBA.

10:12So I do study and admire what they're doing. They've done, I think a beautiful job globalizing their game, doing their global games. We're trying to globalize our game. We have a lot of upside outside the U.S. We have a lot of fans outside the U.S. Our player brands need to grow. They need to be global, not just national, because even when you look at our corporate media partners, they're global companies. So they want a league with a global platform. So that's one thing where certainly I'd like to be a fast follower of the NBA and really just their fans. I mean, there's people who watch the NBA or college basketball who may not yet be fans of the WNBA.

10:51And, you know, we did a whole digital transformation to try to figure out who are our fans, what's the demographic, how do we bring new fans into the funnel and keep them, you know, are our fans, you know, today we have a rabid and avid fan base, But we need fans who are there for big sports moments. And I think we're now in the conversation, as you mentioned, in big sports moments like the NBA finals, like other things. And then we have a group of casual sports fans who are lifestyle viewers, which is why we pull such big numbers on the ABCs and CBSs, because our fans are watching those networks and we need to continue to drive fandom.

11:31So really using the benefit of being associated with the NBA, but not wanting to be exactly them. Like we did the commissioner's cup, our in-season tournament four years ago, we launched that as an opportunity to say, let's give the first half of the season a little more relevance and let's do an in-season tournament. And then the NBA did that. But there's plenty of things that we benefit from their model. And, you know, they're really obviously successful in the cultural conversation. And so are we. I want to go back to the springtime a little bit. And the number that was kind of dominating conversation around the league was$76 ,535, which was Caitlin Clark's starting salary in the league.

12:10And fans of the league know that a lot of players actually go overseas in the offseason to supplement their income. How do you get to a world where that doesn't have to happen, where your best players don't have to go overseas to kind of augment their salary that they're getting within the league itself? Yeah. So I think, first of all, we want our players to do what they want in the offseason. We're not going to tell them do this or don't do this. But we're providing more and more opportunities. And I think all the things we've done with corporate partners, lead marketing deals, putting players in front of corporate partners who then endorse them and give them things to do in the offseason, as well as allowing them to train.

12:49Because the one thing I learned about the players, they want to continue to train and get better in the offseason. And some of our players, if you think the 10, 11, 12 player on a team, they don't get a ton of playing time during the WNBA season. Our season's only five months or so. So they need to go play somewhere in the offseason to get better, to make a roster the next year, especially with all this rookie talent coming in over the next few years. So we're not going to tell them what to do and what not to do. As far as salaries, this is because this ecosystem is underinvested in women's sports for so long.

13:20We're changing that dynamic. When I came in the league, the first stat I heard was less than 1 % of all corporate partnership spend on sports was women's sports. And less than 5 % of all media coverage covered women's sports. And so those are pretty daunting statistics. And being a finance person, I ask, what's the denominator in those? Like, how much would it be to change this a couple hundred basis points? The denominators are huge. But we're literally changing it in a much shorter time than I thought because we raised that capital, deployed that. So we're going to be able to provide better salaries.

13:52We're already providing a half million dollar prize pool for the Commissioner's Cup. We're spending well over a million dollars on league marketing agreements to pay players in the offseason to stay here in the U.S. and continue to market their team and league. Teams are investing. So we're providing more opportunities rather than they're just their base salary. And I think you'll see as we're negotiating our next round of media rights and we're talking to corporate partners, given all this momentum, that we'll be able to provide much higher even salaries in the next collective bargaining agreement, which will come pretty quickly here.

14:24We'll start negotiating that next year in advance of the 2026 season. So a lot to unpack there, I know. But, you know, we're going to do something historic here in the next year or two with our players and provide them more opportunities for more wage earning. But having said that, I think some of these top players coming out of college are getting huge endorsement opportunities because I say a lot of people who aren't familiar with NIL say, well, NIL goes away after college. No, no, no. You look at Aaliyah Boston, look at Caitlin Clark, Angel Reese, Camila Cardoza. They have more opportunities for what we call the pros endorsements with partners and with big brands like Nike, like Gatorade, State Farm, Mercedes, all the partners that are stepping up to support women athletes and especially the diverse women athletes of the WNBA.

15:14That wasn't happening, guys, five years ago. It just wasn't. And now marketing, marketing, marketing of these players is yielding a lot of returns. I mean, if you watch any sports over the last month or two, there wasn't a commercial break that probably didn't have a WNBA player in it in an ad spot for a brand, which is a great sign and signal for the future that the players will have a lot more wage earning opportunities in addition to their WNBA salaries. And they don't get that opportunity without playing professionally post-college. So I'm proud of what we're accomplishing, but we have a lot more work to do and we're going to be setting these players up for decades.

15:53Toby, I haven't watched any sports for the past two months. Have you seen those? Just kidding. I've watched literally five hours of sports every single day. But going back to that media rights deal, so currently you are getting paid$60 million annually and it expires next year. Obviously, these are very high-stakes negotiations. It's the league's number one revenue driver is getting on TV. Do you have a dollar target in mind for the next round of deals? Yeah, we have a range, of course. But, you know, our media rights deal is we've been working on this, not just because now our right steel current rights deals are up in 2025.

16:27We've been working on this for three years since coming off the pandemic and what I call our existential season called 2020, where we, you know, we're able to just survive. And now we're getting into our thrive mode. But yeah, so we've got a range. obviously this year is really helping the future players coming into this league from college, like a Juju Watkins, a Kiki Rice, Hannah Hidalgo, Paige Beckers. Those are all playing into kind of a view that we're pitching around the next decade plus of generational great players. In addition to the Asia Wilsons and Brianna Stewart's and Alyssa Thomas's who are in mid-career level.

17:05And then, you know, obviously we've had some, some great players retire with Sylvie and Sue and then Diana, obviously still playing at the top of her game. So I think we're very attractive to a lot of media partners. And I mean, the one thing I did not understand when I came in is why when even our old viewership, let alone our, our exponential new viewership, you know, we're averaging over a million viewers for regular season games on all four of our big networks, ABC, CBS, ESPN, and ESPN too. That's pretty Herculean. And that's well in excess of other major men's sports leagues who are looking at rights fees 10 to 15 times ours.

17:46We need to fix that. We have a tremendous opportunity to change the whole dynamic here, especially as we bring new fans, expand the league, more teams, being in more markets. I can't tell you how important it is to have announced expansion in both the Bay Area and Toronto, because the more markets you're in, the more fandom you have and more viewers you get and the more merch you sell. And so it's all this economic model. So for, you know, obviously your listeners, I mean, this is this is going to be a textbook business case of taking a small business, growing it and ultimately doing things well in advance of the big revenue drivers like media markets and and corporate partnerships.

18:28And the other thing is, you guys know the media landscape's changing so rapidly. Obviously, even when we put out the most viewed game ever on ESPN, well, think about 10 years ago, how many people were using TVs and didn't cut the cord. And a lot of times our numbers don't include the streaming component of a game. And so we're literally on the cusp of something big here. And hopefully we'll change the dynamic of this undervaluation in this next media rights to. Speaking of attention and kind of changing media dynamics, a lot of what's driving attention among younger people are these TikTok edits of Caitlin Clark, of Angel Reese, of Kate Martin.

19:07They are all over my For You page. I know that these edits are usually set to music. There's usually some sort of hype aspect to it. Have you seen these? Do you know how much that they are dominating kind of youth culture, especially on TikTok? Are you on TikTok? doc? Yeah. So I have two kids in their twenties and I kind of live vicariously through the way they consume their content. And it's actually only a sample too, but it's really instructive to a couple of years ago. You know, my son might be, you know, on his laptop doing work, you know, he was in school then and I'm watching a game on linear TV and he's watching just a clip of what an angel research, Caitlin Clark will do.

19:48And I'm watching the whole game and he's seeing a highlight and he's engaging that way. So one of the things we did three years ago is we took some of that capital and did a digital transformation. Cause I'm like, if our.com and our, um, our, uh, social pages aren't, uh, on, you know, producing great content that the younger generation is going to want to consume and showing the great play on the court in a six second soundbite or whatever it is, we're going to be left behind because when I came in, our digital footprint was not impressive. And now we I'm so glad we it was a good it was a great allocation of capital to do that digital transformation, because now, as you say, this younger generation and we're seeing in our fan demographic when we're seeing huge increase in our fans viewing, watching, attending.

20:35It's a lot of younger fans. And that's what we want, because they're the next generation of fans that our corporate partners and our media partners are interested in tapping into as a consumer, because they're going to be the next wage earners when they get into the workforce. So yes, we're very cognizant of that. We've hired a lot of young people. The other thing raising that capital allowed us to do, I'd say it's great to have financial capital, but you have to hire human capital to grow a business. So we've been able to hire a lot of young people who are on the pulse of exactly what you're talking about.

21:05And yes, I am on Tik TOK. Um, but, um, you know, I'm primarily Instagram, but I'm on Kate Martin, Tik TOK. I don't know when it happened. I must've liked the video, but I see so much Kate Martin content. So it's a great side of Tik TOK to be on though. Oh, what a great story. Kate Martin, not on the draft board originally comes to the draft to support, um, Caitlin Clark and then gets drafted number 15 by the back to back champions aces makes the team and now it's getting real playing time. So it's a great story. We'll be back with Kathy right after this. I'm Christian McCaffrey, pro running back, and Abercrombie is an official fashion partner of the NFL.

21:46I'm not kidding when I say NFL by Abercrombie broke the internet last year, and I think this season's lineup is even cooler. And so does my wife, who keeps stealing all my hoodies. Stay fit for the season and Abercrombie's newest arrivals. Shop NFL by Abercrombie in the app online and in store.

22:12When did making plans get this complicated? It's time to streamline with WhatsApp, the secure messaging app that brings the whole group together. Use polls to settle dinner plans. Send event invites and pin messages so no one forgets mom's 60th. And never miss a meme or milestone. All protected with end-to-end encryption. It's time for WhatsApp. Message privately with everyone. Learn more at whatsapp.com. You must talk shop with other sports commissioners a lot. What topic do you find yourself discussing the most with them? Like, what is the common theme that you're all dealing with across sports that has emerged recently?

22:52Yeah, media disruption, games of consequence, When you have, you know, if you talk to baseball, 162 game season, you know, obviously my counterpart, Adam's 82 game season. How do you give the front end of your season significance? Obviously, NBA launched the NBA Cup last year. We have our Commissioner's Cup, you know, so things like that. But it's mostly about the media landscape and how it's changing and how live sports is actually one of the great remaining properties for linear TV, as well as obviously streaming. You see Netflix now in the live sports, obviously Amazon in a big way, Apple too.

23:32So as you look at, I'm so fascinated. We have this one slide that on the left side has traditional media companies, their market cap, their cash on hand, and then kind of the new media, the FAANGs, Facebook, Apple, Amazon, Netflix, Google, and their market cap and their cash on hand. And this is more the way I process it, just the transition. And then now all the traditional media companies having their own streaming platforms like Peacock and Paramount Plus and how that's a subscription model. And that's why it's great to be associated with the NBA, because we with the NBA can provide almost year round live content because we're made October.