Commentary

U.S. women's economist proves it's all about the World Cup bonuses

Economists have a spotty track record when it comes to sticking their noses into the soccer world, most notably in the MLS players' lawsuit.

Along those lines, truth has been the first casualty of the war between the U.S. women’s soccer team and U.S. Soccer. Myths have been allowed to propagate through the players’ legal filings, public statements and drive-by pundits who fret about women’s national team pay but couldn’t spell “NWSL” if you spotted them the first three letters. The “38 cents on the dollar” report is taken as an actual accounting rather than a far-fetched hypothetical, and Norway and Australia’s “equal pay” deals are hailed as breakthroughs even though they’re quite far from what the U.S. women would consider “equal.”

So when I received the court filing called “Expert Economic Damages Report of Finnie B. Cook, Ph.D.” that would explain how the women’s soccer team could possibly justify entering the figure $66 million (or $67 million, depending on how you round it) into our collective consciousness, it’s fair to say I had low expectations.

I was pleasantly surprised. It doesn’t mean the court should immediately hand $66 million to the 75 people who have any sort of claim to that money, but it’s a refreshing dose of facts and logic in a case that has been dominated by sloganeering.

And though it doesn’t say so explicitly, it squarely puts the focus on the underlying question of this case: What responsibility does a domestic organization (U.S. Soccer) have for passing along prize money awarded by a foreign organization (FIFA)? Should U.S. Soccer be expected to pay nearly $48 million in World Cup bonuses against incoming prize money of $6 million?

Let’s back up and go through Cook’s document first. She has a couple of confusing statements and what appears to be a miscalculation in defining a class of eligible athletes that dates back to April 6, 2014 but does not include Rachel (Buehler) van Hollebeke, Stephanie Cox or Jill Loyden, all of whom played on or after that date. Including those three players would bring that close up from 72 to 75 players -- probably not a significant mistake in overall calculations but possibly something the three players in question would want corrected.

The most befuddling statement, even to someone who is used to reading academic-ese and legal-ese, is this: “49. Because the USMNT CBA does not provide for compensation to a player who does not appear on a roster, is injured, or on parental leave, the methodology described above for calculating their compensation under the USMNT CBA does not provide for any compensation to the USWNT class member in these situations. As a result, there is no need to include any additional offset for these benefits, as they are already accounted for in the calculations using my methodology.”

Dr. Cook also makes one assumption here that seems out of bounds -- the group stage of Women’s World Cup qualifying would be paid at the same rate as the first round of men’s qualifying, and the playoff games would be paid at the same rate as the Hexagonal. Equating a cakewalk against Costa Rica or Mexico (the WNT’s 2010 loss at that stage notwithstanding) with the gauntlet of home-and-away games with countries that take men’s soccer far more seriously than they take women’s soccer isn’t going to sit well with men’s soccer fans or USSF lawyers.

And another calculation will make U.S. Soccer lawyers howl. She computes women’s bonuses for the various minor women’s tournaments (Algarve Cup, SheBelieves Cup, Tournament of Nations, etc.) at the same rate as the men’s Gold Cup, Copa America or Confederations Cup. Comparing an ad hoc collection of friendlies to a continental or intercontinental championship is, of course, absurd.

But she proceeds to acknowledge that argument and present an alternate calculation, and the numbers are surprisingly close to her first scenario. Even the high pay for World Cup qualifiers doesn’t have too much impact on things.

The rest of her document is similarly fair. She addresses and then dispenses with many issues such as per diem disparities, noting that U.S. Soccer has retroactively made up the difference. (That may not stop WNT lawyers from using that difference as historical indifference on the Federation’s part, but if I’m a U.S. Soccer lawyer, I blame that issue on since-departed administrators and move on.) She basically punts on image rights for technical reasons.

Her attention to detail is exceptional. She accounts for every dollar that is left on the table by players who decline pay to maintain college eligibility. And she meticulously calculates interest, something I didn’t attempt in my back-pay calculations.

Perhaps we’re talking about clearing a low bar here, given the alternative facts that have surrounded the women’s pay issue. But it’s not easy to poke meaningful holes in Cook’s filing. The women have chosen an economist who gets the details, and most of them result in a trivial difference in pay.

So we’re left with the elephant in the room.

The prize money.

Perhaps U.S. Soccer backed itself into a corner by being so generous with the men. For the 2014 World Cup, the available prize money was:

$175,000 for each point in the group stage
$3.6 million for advancing to the knockout stage
$4 million for advancing to the quarterfinals
$4.5 million for advancing to the semifinals
$7.5 million for winning it all

Those bonuses are cumulative. Apply them to the 2015 World Cup, when the U.S. women got seven points in the group stage, and that’s $21 million, or 1,050% of the $2 million prize money FIFA awarded.

For the 2018 World Cup, the men got a raise:

$218,750 for each point in the group stage
$4.5 million for advancing to the knockout stage
$5 million for advancing to the quarterfinals
$5.625 million for advancing to the semifinals
$9.375 million for winning it all.

Apply that to 2019, when the U.S. women took all nine group-stage points, and you get $26,687,500, or 667% of the $4 million prize money FIFA awarded. If the men had swept through the 2018 World Cup, they would have received 70% of the $38 million prize money.

For sake of comparison: Australia’s “equal pay” deal would award either the men or the women 50% of the World Cup prize money. Norway would award 25%. The men wouldn’t take that deal; the women would laugh.

The actual pay the U.S. women received in 2015: $1,725,000 for winning the 2015 World Cup ($75,000 to each of 23 players), plus a $1,800,000 bonus for the Victory Tour that is paid on top of the regular game bonuses. That’s a nice 176% of the FIFA prize money.

In 2019, the women earned $2,523,000 for winning the Cup, plus $1,400,000 for the Victory Tour. That’s just under 100%.

The women also can play in the Olympics. Cook, based on a comment from U.S. Soccer executive Tom King about what the men would get if a new tournament was added, uses an average of the Gold Cup, Copa America and Confederations Cup bonuses to calculate a fair number for Olympic pay. But with the women crashing out of the 2016 Olympics, they would only have received game bonuses and perhaps a $225,000 bonus for advancing past the group stage, all against incoming prize money of $0.

Under the new women’s CBA, if they win the 2020 Olympics, they’ll be due $1.8 million for winning and $1.2 million for the Victory Tour. The most recent prize money figure from the USOPC would be $37,500 per medalist, so an 18-woman roster would bring in $675,000.

So all of this math makes it perfectly clear. The Federation and the women’s team have to hash out what’s fair on these bonuses. Everything else is pocket change -- a hypothetical I ran last summer in which I gave the women 100% of their FIFA prize money and evened out everything results in a change of less than $1.2 million a year over their current CBA.

The numbers make us wonder why it’s really necessary to have these volumes of legal documents and depositions, along with misinformation and misguided anger in the media and social media. Why is anyone asking Carli Lloyd whether the women could beat the men? Why are alleged women’s soccer advocates cherry-picking ratings and attendance numbers that only started to swing in the women’s direction after they filed the 2016 complaint with the Equal Employment Opportunity Commission that started us down this road?

To paraphrase Shakespeare, let’s fire all the lawyers. Then maybe focus on the one question that matters. Until that’s resolved, the rest is sound and fury, signifying nothing.

Photo: Gwendoline Le Goff/Panoramic/Icon Sportswire

5 comments about "U.S. women's economist proves it's all about the World Cup bonuses".
  1. R2 Dad, February 29, 2020 at 12:32 p.m.

    Interesting how Shakespeare's take has not changed over the centuries. If USSF made the math that simple, we wouldn't need esquires to make things complicated/combative/expensive.

  2. Ric Fonseca replied, February 29, 2020 at 2:14 p.m.

    Huh???   I know Shakespeare, but...

    Who is Beau Dure???

  3. R2 Dad replied, March 1, 2020 at 12:25 a.m.

    Er, rather, lawyer's reputations have not improved in hundreds of years. Shakespeare's take is as relevant now as it was then.

    https://duresport.com 

  4. Bob Ashpole, February 29, 2020 at 6:43 p.m.

    Calculating money damages in matters involving wages is never complicated. It is just a pretty routine accounting exercise.

    The real issues are on liability, on both claims. The serious remedy question is on the 2nd claim of gender discrimination if plaintiff prevails.

  5. Bob Ashpole, March 4, 2020 at 11:42 a.m.

    Beau, the next filings should be in a week or two: a plaintiff response to USSF's motion to dismiss, and USSF's response to plaintiff's motion for summary judgment. 

    I for one would be interested in an article providing information about the responses. The motion to dismiss response will be less interesting to readers than the USSF response to the motion for summary judgment. It should identify what factual issues remain for trial in May. 

    There was also an article in the Harvard Business Review on 9-25-19 about the lessons to be learned by employees and management from the lawsuit. You may find it interesting.

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