Equal Pay For Equal Work?
The U.S. Soccer Federation (USSF) and the U.S. Women’s National Team (USWNT) have been battling over compensation for the last year. In some ways, the dispute is just another chapter in the timeless battle between labor and management. Labor wants to get paid more while management wants to keep costs and expenses down. The battle-lines are blurred because the USSF is a non-profit charged with developing and managing soccer in the United States. More money for labor means less money for other USSF responsibilities, such as player development, not less money for the suits (shareholders). In other words, my predisposition to side with labor isn’t necessarily triggered here.
The long-running dispute received little attention till yesterday, when several leading members of the USWNT announced on the Today show that they were filing a complaint with the Equal Employment Opportunity Commission (EEOC) alleging gender discrimination. The complaint alleges that the women get paid less than the men for doing the same work, playing soccer. And documents made public by the U.S. women suggest that this is true. Unfair? Maybe. The USWNT wins, the USMNT shows up. The USWNT brings home trophies. The USMNT brings home newly naturalized Germans to represent the Red White and Blue. And of course more people watched the US Women take home the 2015 World Cup than any other televised U.S. soccer match (men or women) in the United States.
Case closed? Not quite. Winning, it turns out, is not everything. FIFA paid the USSF $12.5 million for the men’s participation in the 2014 World Cup and reaching the round of 16. FIFA doled out a paltry $3 million to the USSF for the women winning the tournament. Men’s soccer, traditionally, has generated far more revenue than women’s soccer. That’s true in the United States, even with the comparative success of the USWNT: The figures for the last several years certainly back that up:
Further, the side-by-side comparison between the bonus structure for men and women (what the media has focused on), isn’t exactly fair. For the men, playing on the national team is not how they make their living. Most have six and seven figure deals with their club teams. The women, on the other hand, rely heavily on income from playing for the national team. Professional club opportunities for women are inconsistent at best, and most do not pay much. Appearance bonuses for the women may be lower, but the women in the national program earn a salary from the USSF. In certain years, despite the purported discrimination, the highest paid players in the national program were women, not men. For instance, in 2012, Alex Morgan and Rebecca Sauerbrunn out-earned any of their male counterparts.
Further, the USWNT players and USMNT players negotiate compensation packages (a collective bargaining agreement or CBA) separately. Given the very different needs of the player pool, this makes complete sense. The CBA for the men (which expires in 2018) emphasizes bonuses for appearances and winning, while the CBA for the women emphasizes base income over bonus incentives. The women’s CBA expired in 2012. Following its termination, the USWNT entered into a new agreement with the USSF comprised of the old CBA, with several amendments made through a document referred to as a memorandum of understanding or MOU (CBA/MOU). The CBA/MOU improved the economics for the USWNT and is set to terminate at the end of 2016. The MOU contemplated the parties entering a formal agreement, essentially updating the old CBA to incorporate the new terms contained in the MOU, but that never happened.
The USWNT didn’t want to wait till the end of 2016 to negotiate a new deal. The Women’s World Cup and the Olympics represent the two flagship events for women’s soccer. The USWNT won the World Cup last summer and the Rio Olympics are just around the corner. Interest in Women’s soccer is at an all time high. And the USWNT is projected to generate more income then the men’s national team in fiscal years 2016 ($27 million vs. $21 million) and 2017 ($17 million vs. $9 million); that is if you don’t count the revenue generated by hosting the Copa America for the men ($15 million) and do count the speculative 10-game post Olympic gold medal victory tour for the women ($8,000,000). The USSF likely views these two years as an anomaly and considers the revenue generating potential of the men to be quite a bit higher. But you get the point, the economics look as good for the women this year as they probably ever will.
And the USWNT will never have more leverage over the USSF than they do now, following the World Cup victory and with the Olympics just around the corner. Despite the favorable conditions (or perhaps because of them), the USWNT was not happy with the way the negotiations were going. Labor’s primary weapon in any dispute with management is to go on strike. But the CBA/MOU, which contained a no strike clause, took that threat off the table. So the USWNT terminated the CBA/MOU early, claiming it wasn’t a formal agreement and was terminable at will. Now the USWNT could go on strike. That would be an absolute nightmare for the USSF. To take the strike threat off the table, the USSF filed a lawsuit in Federal Court in Illinois seeking a declaratory judgment that the termination of the CBA/MOU was improper. This is an extremely aggressive move (as was the CBA/MOU termination) and indicates that the parties are not playing nice.
Like the termination of the CBA/MOU, the EEOC complaint is best seen as another attempt by the USWNT to shake up the status quo. The complaint itself seems odd, as do some of the examples of purported discrimination. For instance, there is a huge disparity in the World Cup bonuses paid to members of the men’s and women’s national team. This of course has nothing to do with gender discrimination. FIFA pays millions more to federations for advancement and participation in the men’s World Cup then the women’s. As noted above, the USSF received $12.5 million for the men reaching the round of 16 in Brazil while the USSF received $3 million for the women winning the tournament (Germany received about $35 million for winning the men’s World Cup). The USSF bonus structure, which was negotiated independently by both the men and the women in their respective CBAs, is surely predicated upon the FIFA money.
The complaint isn’t so much about winning equal pay. The complaint is about framing the dispute and bringing the weight of public opinion to bear against the USSF. By pounding the drumbeat of equality, the USWNT believes that the USSF is more likely to accede to their demands by re-negotiating the CBA on favorable terms prior to the Olympics.
And despite the dubious nature of the discrimination claims, the strategy appears to be working. The complaint was announced by leading lights on the U.S. national team on the Today show. They played up the success of the women’s program versus the mediocrity of the men’s. They talked about how they just want to get treated fairly, equal pay for equal work. And the media largely bought the act hook line and sinker. Every media outlet posted an article about the bonus disparity, the tremendous success of the USWNT and discrimination. There was almost no critical examination of the backdrop of the dispute, the different compensation structure negotiated by the men and women, the disingenuous CBA/MOU termination, and the tremendous historical disparity in revenue generation between the men’s and women’s programs. The USSF is on the defensive. And their defense is really boring.
The USSF is paying players on the USWNT exactly what the USWNT agreed to get paid through the collective bargaining process. They now want more. And based on the projected revenue generation for this year and next, the women should be able to procure a substantial increase to those payments in their new CBA. Pay in professional sports is about merit not charity. The idea behind equal pay for equal work is that the value of work to an employer is the same whether it is done by a man or by a women. That isn’t true in professional sports. The USWNT should get paid more because their ability to generate revenue has increased dramatically in the last year or two and merits more pay, not because the EEOC says a woman and a man must get paid the same amount of money to play a sport under Federal law, regardless of merit. That would certainly throw a wrench into the salary structure of the NBA and WNBA.
I have no doubt that when the USSF and the USWNT finally do agree on a new compensation package, the economics will look much better for the women. And despite the side-by-side comparisons of the bonus structure for men and women (a bonus structure portrayed by the USWNT and media as discriminatory), the compensation package negotiated by the women won’t look anything like the men’s because the U.S. women have inherently different financial needs than the men. Regardless, the USWNT can look forward to a big raise. For at least the next CBA cycle, the USWNT certainly earned it.