Seattle Storm Share Sale Values Team at WNBA Record $151 Million
WSJ, Rachel Bachman 2/8/23
The Seattle Storm have sold minority stakes in the team that value the Women’s National Basketball Association franchise at a record $151 million, the team’s owners said.
The sale of stakes to 15 investors will help finance a $64 million, 50,000-square-foot practice facility and business office for the Storm, which is set to break ground this month, team owners Ginny Gilder and Lisa Brummel said.
The Storm’s valuation is about 15 times the sale price of several WNBA teams sold previously, a jump that reflects the Storm’s success in particular and the increasing value of women’s sports properties in general. It isn’t clear whether other WNBA teams, some of which have struggled to build an audience, could achieve similar valuations.
“Investors don’t go off of anecdotes. They go off of [comparables],” Gilder said. “So hopefully, we’ve just set the floor. We’ve set a real-live floor. Not just the WNBA, but women’s soccer, women’s hockey, where women’s sports is going.”
The Storm will continue to be controlled by Force 10 Hoops LLC, composed of three Seattle businesswomen: Gilder, Brummel and Dawn Trudeau. A slightly larger version of the group bought the franchise in 2008 when the established price for a WNBA franchise was $10 million. The Storm’s owners actually paid $1 million, because the balance of funds were only to be paid if certain business targets were achieved, which they were not.
Gilder said the exercise of explaining the team’s vision for the new practice facility was challenging. In the past decade, a few other WNBA teams also sold for $10 million or less, so some people struggled to grasp the Storm’s ambitions and $151 million valuation, which is the sum of an outside firm’s analysis plus the funds from new investors.
Two decades ago, the Mohegan Tribal Gaming Authority paid $10 million as an expansion fee for the WNBA’s Connecticut Sun, according to an SEC filing. In 2021, Mark Davis bought the Las Vegas Aces—which won the WNBA title last season—for what was reported as a little more than $2 million.
Seattle has been one of the most successful WNBA teams on the court—it’s won four league titles—and off it, leading the league in attendance last season with more than 10,600 fans a game, according to the sports data site Across the Timeline. The Storm plays in the recently renovated Climate Change Arena and benefits from its location in a growing metro area with high income levels and a strong corporate base.
The WNBA’s TV ratings are on the rise, and a year ago the league raised $75 million from a group of investors that included Nike Inc., and businessman Michael Dell. WNBA commissioner Cathy Engelbert has signaled the league’s intent to expand beyond its current 12 teams in the next few years, which would be its first expansion since adding the Atlanta Dream in 2008.
The Storm’s investment in a purpose-built facility—similar to moves by the WNBA’s Las Vegas Aces and National Women’s Soccer League’s Kansas City Current—adds an asset to the franchise and a mark of permanence for both the team and league.
“This is not a hobby,” Brummel said. “This is something that we’ve built that will stay in perpetuity, that will make money and that will sell for a profit in the many years to come when we decide to do that.”
Gilder and Brummel declined to identify the outside investors because they hadn’t given permission to share their names.
Team valuations are rising across all sports—the NBA’s Phoenix Suns and WNBA’s Mercury recently sold for a total of $4 billion—but some of the biggest jumps, by percentage, have come in women’s sports, where team values have been low.
Expansion-franchise fees in the National Women’s Soccer League leapt from $2 million to $5 million in 2020 to about $50 million each for franchises set to be awarded to groups in Boston and the San Francisco Bay Area.
Women’s sports TV rights have long been bundled and sold with men’s rights—such as the NCAA women’s basketball tournament and soccer’s Women’s World Cup—which has obscured the value of the women’s events. As TV audiences splinter and migrate to on-demand content, broadcasters’ rising appetite for live sports is driving up their value. The WNBA’s broadcast-rights contracts are worth roughly $35 million a year and the league’s primary deal, with ESPN, expires in 2025.
Brummel said that following the Storm’s 2020 championship, she and Gilder realized the franchise needed “to have a place where players can go and build their team chemistry, care about their health and wellness, practice their skills.” She and Gilder increased their investments, but they also wanted to take out a bank loan to build the facility, which they aim to open by spring 2024. To substantiate the loan and sell equity in the team, they hired a firm to conduct an outside valuation.
The Storm’s news follows two key player departures. Point guard Sue Bird, who played two decades for the franchise, retired after last season. Forward Breanna Stewart, drafted No. 1 overall by the Storm in 2016, recently signed with the New York Liberty after twice being named MVP of the WNBA finals.