[authors: Alan Marco and Paul Benson]
In May 2024, Caitlin Clark, the standout Iowa Hawkeyes point guard, joined the Indiana Fever. Her rookie debut coincided with an almost 200% increase in viewership for the WNBA—the so-called “Caitlin Clark Effect.”
Of course, Clark is not personally responsible for the spike. Other rookie players such as Angel Reese and Cameron Brink drew big audiences in college and brought those audiences to the WNBA. Furthermore, interest in women’s basketball—and women’s sports—has been trending upwards in recent years. Viewership of the NCAA women’s championship game has nearly doubled each year from 2022 to 2024, and 2024 was the first time in tournament history that the women’s championship game drew more viewers than the men’s championship game.
Still, the particular interest in Clark has put a microscope on the inner workings of the WNBA, league revenues, and player compensation. As an economist, my question is how much does Caitlin benefit from the Caitlin Clark Effect?
Not by her salary, she doesn’t. In Clark’s first year, she is anticipated to make just over $76,000 in salary, according to sportico.com, with rookie salaries fixed by the league. In comparison, the average NBA rookie will pocket $10 million in salary. Of course, differences in revenue between the NBA and WNBA drive much of the disparity in salaries, but not all of it. NBA revenue is about 50 times that of the WNBA, whereas the average NBA salary is about 100 times that of the WNBA average salary.Another significant difference is each league’s respective collective bargaining agreement and how income is shared with the players. In the NBA, 50% of the league’s basketball-related income is shared with the players, whereas in the WNBA a split only occurs if the league exceeds its revenue targets.
But, what about Clark’s ability to benefit from her Name, Image, and Likeness (NIL)? While professional athletes have always had the ability to profit from their NIL, in June 2021, the NCAA adopted a policy that allowed college athletes to profit from their NIL. This policy change allowed college athletes to profit from and begin building their “brand” while still in college. For example, while playing college basketball at Iowa, Clark pulled in over $3 million in endorsements. Now, she has signed deals with Nike, Wilson, State Farm, and others. The Nike deal alone is reportedly worth $28 million.
While her endorsement revenue allows her to benefit from her own notoriety, it does not enable her to profit from the Caitlin Clark Effect. Because she cannot appropriate that value through salary negotiation, the Effect accrues almost entirely to the Indiana Fever and the league itself, through increased ticket sales, viewership, and attendance. For example, when Clark plays, WNBA attendance is 105% higher than when she is not playing and when the Indiana Fever are on the road their opponent’s home attendance jumps 87%. Economists would call this an externality—an uncompensated spillover to the league due to Clark’s effect on increased viewership and league revenues.
In the long run, it is not clear that salary negotiations would want to incorporate the impact of one player on league revenues. But continued discussions and research about women’s sports salaries should reflect good economics. Commentators should not make the mistake of conflating endorsement revenues and salaries; we cannot ignore fairness in salaries because of the ability to get endorsements. They are not perfect substitutes. Each is a separate component of overall compensation related to performance, NIL, appropriation, and economic spillovers.
Associated Press “WNBA earns record TV ratings for 1st month, near-record attendance/“ 6/11/2024.
