Fair Play: Leveling the Paying Field in Soccer — Business Today Online Journal

Source: Richard Heathcote from Getty Images in 2019

Following its world-stage success in 2019, the US Women’s National Soccer Team (USWNT) encountered a rare defeat in a crushing verdict delivered against its case-action lawsuit in May this year. Filed on the basis that its employer – the US Soccer Federation (USSF) - had violated the Equal Pay Act and Title VII of the Civil Rights Act, the USWNT claimed $67 million in backpay from 2016 to 2019. The crux of the case was dismissed by federal judge Klausner, who claimed that USWNT had been “paid more on cumulative and average per-game basis” than the US National Men’s Team (USMNT) in the given period.

Across the world, only a year earlier, Australia’s national women’s team – the Westfield Matildas – secured equal pay through a landmark deal with their national football federation (FFA). This was partially attributable to their 2015 strike: action that is illegal for the USWNT under their current collective bargaining agreement (CBA).

Both the US and Australian national women’s soccer teams have seen worldwide success, ranking 1st and 7th respectively, vis-à-vis their equivalent men’s teams (22nd and 40th respectively). What’s keeping the debate over pay discrepancy alive in the US, and why shouldn’t this one go through to the keeper?

Game On: Pay Structures in Australia vs the United States

Source: Football Federation Australia (FFA) depicting the Westfield Matildas

In contrast to the clash seen in US courts, Australia’s players’ union – Professional Footballers Australia (PFA) – struck a landmark deal in November 2019 with Football Federation Australia (FFA), equalising the earnings of top women and men’s team soccer players. Under the agreement, the Westfield Matildas are guaranteed an equal split of commercial revenues and total player revenue as the national men’s team, translating to a 50% increase in their salaries to $57,000 USD in 2020.

Meanwhile, the US Men and Women’s teams have separate CBAs and therefore, different pay structures. Contract players on the Women’s team earn modest performance-based bonuses - on the condition that they win - atop a base salary, whilst the Men’s team are contracted under a pay-to-play structure based exclusively on bonuses. The bonuses for the men are significantly higher than those of the women.

2017 saw a new agreement under which, in a 20-game scenario, players on the USWNT would earn 89% of the income received by a similarly performing men’s team, and the same amount if all of these games were lost: a marked improvement on the previous contract, but a significant gap, nonetheless. In 2018, the Women’s team - for the first time - earned more than the men. However, this was a result of the USWNT performing a greater amount of work: playing almost double the number of games and winning 90% of those, compared with the USMNT which won just 27%.

Opponents at Home: Economic Arguments Against Equal Pay

With sexist arguments such as those put forth by former USSF president Carlos Cordeiro quashed in backlash by sponsors and the court of public opinion, the enduring disagreement over equal pay is based largely in the economic arena.

The USSF contends that the pay differential is primarily a result of “differences in aggregate revenue generated” by the two teams. Yet, during the relevant period, the USWNT generated more profit and revenue than their counterpart. In the following two fiscal years, the women’s team posted total net revenue of $9 million, while from fiscal 2015 to 2016, the men’s team generated just $3.05 million. These achievements are also despite the fact that the Women’s team has been undermarketed and subject to lower set ticket prices compared to the men’s team. Consumer engagement with the USWNT compared to the USMNT has also been significantly higher; average attendance at games was 8% higher for the women than the men in 2019, and the Women’s World Cup Final in 2015 has endured as the most watched soccer game in the history of American television, having recorded 23 million viewers.

At this point, it is worth referring back to Judge Klausner’s rationale for dismissing the USWNT’s case for equal pay: the idea that during the period in question, the women’s team had earned “more on cumulative and average per-game basis” than the USNMT. Note that this was a direct result of their superior performance to the men’s team, as well as the fact that they had played a greater number of games.

Another prominent argument against equal pay is that the USWNT chose its current collective bargaining agreement (which guarantees a base salary) over the purely bonus-based pay structure adopted by the USNMT, and that retroactively rewriting the agreement impinges upon the law because the women “never took the higher risk” that the men did. However at the time, the USWNT were not granted the same level of financial security in their professional league as the men, receiving a minimum salary of $16,538 as opposed to $70,250 for the men’s league in 2019. Furthermore, the USSF had refused to offer the USWNT a CBA on par with the men, meaning that the best option for the women was to accept a differently structured CBA with at least the benefit of a guaranteed salary. Since the USSF is essentially a monopolist employer, and the pay received in the women’s professional league was so low, the USWNT had very little bargaining power in negotiating its contract.

The final sticking point is the role played by the international governing body of soccer (FIFA) and the tremendous discrepancy between the prize money they set for the Women and Men’s World Cups, which the USSF argues is a large component of unequal pay that is outside of their control. Whilst the 2019 Women’s World Cup saw a prize pool of $30 million, the 2018 men’s equivalent saw approximately $400 million, meaning that the US men’s team would have earned $3000 more for a loss than the women’s team would have for a win, had they played. According to the PFA, this discrepancy is arbitrary with “no reference to any economic KPIs”.

That final caveat - had they played – is important, firstly because it is an indication of the USWNT’s outperformance of the men’s team in qualifying for their respective World Cup. Secondly, it undermines the USSF’s justification that the USWNT earned more than the men’s team during the period in question, since this was a result of better performance.

The Economic Play-off: Cost vs Benefits of Change

One solution that has been supported by both national teams is the adoption of a revenue-sharing model that would “test the USSF’s ‘market realities’ theory”. Players would be compensated in direct proportion to the amount of revenue derived from their respective team’s activities, meaning the USNWT and USWMT would share in the same risk and reward of economic success. Despite countries such as Australia having adopted the model and both the US men’s and women’s teams supporting it, the USSF has rejected it on numerous occasions.

The reasons for this are unclear, although it would likely cost the USSF more to pay the USWNT under the revenue-sharing model than the current one, assuming men continue to be paid the same amount. However, from an economic perspective, performance-based pay should attract more talent, bolstering the popularity of soccer in the US, and generating more money to be distributed to players and the federation.

Moving from Offside to the Right Side of History

Although in principle, the $67 million backpay would help acknowledge the unfair grounds of negotiation faced by the USWNT in its CBA, it is also a substantial sum that could be channelled into investments such as grassroots development programs for young female players. Perhaps, a portion of the money could be re-invested into female soccer development in the names of the players, as is done as part of the CBA for the Matildas and Socceroos in Australia.

Source: FIFA, depicting USWNT’s Megan Rapinoe in 2019 after winning adidas Golden Ball as best player and adidas Golden Boot as top scorer for her performance in the FIFA Women’s World Cup France 2019.

Currently, the move towards equal pay in the US is being spearheaded by major sponsors such as Nike, VISA, and Procter & Gamble, which have exerted pressure on the USSF through new contract demands, marketing, and donations to USWNT players. This in turn has been the result of pressure from consumers, who are increasingly insisting on companies taking a stronger stance on societal issues.

Higher level change must be instigated by FIFA, starting with equalising the prize pool of the Women and Men’s World Cups, however, this sentiment must be shared by national soccer federations across the world. Although Klausner’s recent court ruling maintained the USWNT’s claims regarding unequal treatment in areas including travel, accommodation, and operational/coaching investment, if significant movement towards gender equality is to be achieved, the leader in women’s soccer should get behind the ball with Australia.