Friday , October 18 2019
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Three Things I Think I Think – Soccer Edition

Summary:
“Woohoo, the Three Things we’ve all been waiting for – the soccer edition.” – Said no one ever.  1) Women’s Soccer and equal pay. The US Women’s National Team has been involved in a longstanding lawsuit against US Soccer over equal pay. Basically, the men’s team makes a lot more on average than the women do and the women argue that this is discrimination. Now, this is a tricky discussion because there are a lot of moving parts, but here’s where I stand on this.  You have to look at this based on financial performance because that’s the only thing that makes all of this viable. Although the US Soccer Federation is a 501C non-profit their viability is based primarily on the revenue they generate from their operations. For most of the last 100 years the men’s game has been the primary

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“Woohoo, the Three Things we’ve all been waiting for – the soccer edition.” – Said no one ever. 

1) Women’s Soccer and equal pay. The US Women’s National Team has been involved in a longstanding lawsuit against US Soccer over equal pay. Basically, the men’s team makes a lot more on average than the women do and the women argue that this is discrimination.

Now, this is a tricky discussion because there are a lot of moving parts, but here’s where I stand on this.  You have to look at this based on financial performance because that’s the only thing that makes all of this viable. Although the US Soccer Federation is a 501C non-profit their viability is based primarily on the revenue they generate from their operations. For most of the last 100 years the men’s game has been the primary driver of the 501’s revenue. This is starting to change though. Here’s a recent history of the revenue streams from the men’s and women’s games:

Three Things I Think I Think – Soccer Edition

The reason the men were justifiably earning more than the women was simple – they pull in a lot more money than the women. But the men’s game has stagnated in the last decade. They didn’t even qualify for the last World Cup and the women are the favorite to win the 2019 Women’s World Cup. And on an apples to apples basis the women’s revenue now matches that of the men. So I would argue that, while their case wasn’t that strong 5-10 years ago it has become much stronger in recent years.

The thing that throws this all off is the men’s World Cup. The men’s event is colossal with an estimated prize money of $440MM in 2022 vs $30MM for the women’s world cup in 2019. If the US men qualify for future World Cups they bring in several years worth of revenue from this one event. So there’s no clean way to quantify this. In short, I’d argue that the men, by virtue of being even tangentially associated with the Men’s World Cup, will have a nearly perpetual revenue advantage. But the women have closed that gap substantially when looking at their events outside of the World Cup.

According to US Soccer the top players earn relatively similar compensation, but the non-star pay differential is significant (as much as 10X). This does strike me as unfair given the convergence in revenues. Of course, I don’t know how to quantify this going forward. There’s no clean way of knowing how the two teams will perform, however, it appears clear that the women are either underpaid on average or the men are overpaid on average. US Soccer should resolve this one privately and fess up to having underpaid their women or having overpaid their men.

2) Did the US Women Celebrate Excessively? Okay, this is a little off topic, but it’s been a big topic this week. So, the US women beat Thailand 13-0 in the first game of the Women’s World Cup this week. And every time they scored they celebrated like they’d just won the entire tournament. Naturally, some people were outraged by this saying they celebrated excessively and humiliated Thailand. Hmm. I am not sure I agree.

When I was 15 I played on one of those traveling baseball teams playing in a tournament all over the East Coast. We were a good team. Really good. But we lost in the championship. It hurt. And as we shook hands with the other team they peeled off the line and went bonkers and celebrated right in front of us. We moped back to the dugout and our coach stopped us. He said “stop what you’re doing and get your asses up on the top step. I want you to watch them celebrate and let it sink it so that you remember what it feels like to be disappointed because your disappointments are going to be one of the main things in your lives that make you better.” I’ll never forget that moment. It is one of the main reasons I relish mistakes. They are opportunities to get better. And guess what? We won that same tournament the next year.

I love competitive sports. I mean real emotionally competitive. I enjoy bat flips, trash talk, ridiculous endzone dances and all the raw emotions that come out during sporting events. In my view, the only thing that warrants “excessive celebration” is physically hurting your opponent. Maybe I am too “old school” or I don’t have proper sportsmanship etiquette, but I’ve never seen a conflict between being emotional before and during an event and being respectful of your opponent after all is said and done. I think boxers generally do it the right way – they emotionally despise one another before and during an event and emotions run hot the whole time and then they shake hands and hug it out after the event is over. That’s the way emotions in sports should work in my view.

Back to women’s soccer though – first, goal differential matters in the World Cup so you need to pour it on when you can because everyone in their group will play Thailand and you don’t want to miss the second round because you took your foot off the gas after goal 5 while Sweden poured 20 on. Second, you’re in the World Cup on the biggest stage in soccer. I say celebrate. Let your emotions out. The Thai women are grown women. Their feelings aren’t going to be hurt by any of this and they’ll only find it “disrespectful” if they allow themselves to believe that they’re being disrespected (which they’re not). In fact, they might even find a lesson in their disappointment and come back next time so they can enjoy all the excessive emotions that are deserved from the spoils of victory.

3) If Trump loses the stock market will crash! I know this isn’t soccer related, but here’s a good tweet from Trump this morning:

Three Things I Think I Think – Soccer Edition

Oh no. I guess we better make Trump the permanent President or the stock market will collapse as soon as he leaves office! I kid of course, but sometimes I wonder if he realizes how ridiculous his stock market commentary is. I mean, even if this is true it implies that he’s built an unsustainable boom that will collapse as soon as he leaves office. In any case, as I’ve said on many occasions, the President doesn’t drive the stock market and the economy so any time anyone claims something like that you can happily ignore them.

NB – In other Twitter news, OJ Simpson has joined Twitter and says he has some “getting even to do”. So, I guess we’re all gonna be murdered now. Enjoy your weekend!

Cullen Roche
Former mail delivery boy turned multi-asset investment manager, author, Ironman & chicken farmer. Probably should have stayed with mail delivery....

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