The Storm is now in position to make its strongest push toward profitability.
They laugh about the memory all the time. It’s like a family joke that gets repeated every holiday.
Minutes before the January 2008 news conference to introduce the Storm’s new owners, a group mingled and burst with enthusiasm in a waiting room. Longtime Storm front office executive Karen Bryant was meeting her new bosses for the first time, but she couldn’t help expressing her earnest desire to build an organization the proper way. Though excited, Bryant interjected with several ideas about improvement and sobering reality.
“I just want you to know there are a lot of challenges ahead,” Bryant warned.
In almost any other business endeavor, the Storm ownership trio known as Force 10 Hoops would be anywhere from a safe bet to a sure thing. But as WNBA owners, they face a befuddling question: Why is it so hard to turn a profit in the WNBA?
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How can owners with so much passion and business savvy be considered underdogs?
The answer can be as simple as the league still isn’t established enough after 16 seasons, and it has a seemingly insurmountable task to gain better traction among male fans who have the greatest influence on perception and popularity in sports. But the issue is more complex than that.
The new owners’ initial thought after Bryant was so upfront: Party pooper. Their lasting impression: Wow, she was right.
“I had been waiting for that day for so long,” Bryant says now. “And here I had a captive audience with our new owners and probably just felt excited to get down to work.”
They forgave her eagerness. In fact, they rewarded it. Bryant has been the Storm’s CEO during the entire Force 10 Hoops ownership tenure.
After a transition that included the Sonics leaving sooner than the Storm expected and the departure of influential civic leader Anne Levinson from the ownership group, the Storm is now in position to make its strongest push toward profitability. Still, the organization will need to be even sharper and more strategic than it already has been.
“Not a day goes by when I haven’t been reminded of what a challenge we have and how important it is that we succeed,” Bryant said. “What we have now is a group that is capable of taking that challenge head on.”
Renowned sports economist Andrew Zimbalist puts the challenge of a WNBA owner in perspective.
“I think the league is still struggling,” said Zimbalist, the Robert A. Woods Professor of Economics at Smith College. “It’s structured to be an activity to fill arenas during a time of year when people don’t want to go to arenas. That’s a challenge, and I don’t think that’s insignificant. I think longterm viability is possible, but it’s clearly something that’s not going to happen overnight. Whoever invests is going to have to stay patient, and the good thing is that, so far, the NBA has been patient. But it has to grow and promote the game better.”
The Storm is good at the most important part — winning. They have a good product. They qualified for a record ninth straight postseason appearance this year. They open a playoff series against the defending champion Minnesota on Friday.
This was not the typical Storm season, however. Despite making the playoffs, they had a losing record (16-18), snapping a 10-year streak of finishing .500 or better. It has been a struggle, but stars Sue Bird and Lauren Jackson are still in their early 30s.
Off the court, there have been significant breakthroughs. In 2010, the franchise leveraged its Microsoft connections and signed a multiyear sponsorship deal with Bing that pays at least $1 million a year. In addition, during her time as a part-owner, Levinson led efforts to find office space in Interbay, create a practice facility by partnering with Seattle Pacific University and sign a favorable longterm lease at KeyArena.
In the lease, which runs through 2018, the city pays the Storm $300,000 a year to be the primary tenant at KeyArena. The franchise pays $100,000 in rent each season. Levinson, a former deputy mayor and municipal judge and longtime professional women’s basketball advocate, was able to get the city to agree to that $300,000 sum because she argued that, as the new primary tenant of KeyArena, the Storm deserved compensation for not being able to sell the naming rights of the arena. KeyBank’s contract with the arena expired at the end of 2010, however, and the city has been unable to sell the rights since then.
City officials agreed to this revenue-sharing deal because they estimated the Storm could generate $750,000 per season through ticket, business and occupation taxes.
Levinson considered the lease “central, fundamental to the business being able to break even.” The Storm used to operate under a year-to-year lease. Now, it has stability and a sweet deal that makes it easier to field the team.
The lease has received media attention lately because of Chris Hansen’s attempt to build a new arena in Sodo. Whether the Storm would move to Sodo if the new arena is built remains uncertain, but if it does decide to leave, the Storm would receive $5 million under the city’s deal with Hansen.
If the Storm achieves profitability, it will be partly because they have a fairly stable expense structure. A lot of their expenses are fixed, including player salaries. The WNBA has a hard team salary cap of $878,000 for 2012, and every team must spend at least $844,000.
Still, there are challenges. The Storm averaged 7,486 fans for 17 home dates this season, the lowest home attendance of Force 10’s five-season run. It was a significant drop from the 8,659 average in 2011. With a rebuilding team that started the season 1-7 and an Olympic break interrupting the WNBA season, it was impossible to create buzz.
“It’s been challenging,” Storm co-owner Ginny Gilder said of this season. “But we’re doing what it takes to help the franchise long term. I don’t like losing. You find somebody here who does.”
The owners are willing to be patient and focus on growth. Bryant says the franchise could slash its way to profitability, but over time, that would put the Storm in an even deeper hole.
Right now, the Storm remains in a growth period. After the Sonics left in 2008 and the franchise became a true independent, the owners made a major commitment to spend money properly, investing in marketing and promotions, advertising, broadcast and employees. When the Sonics were in town, the Storm had a shared services agreement. The Storm had a full NBA staff available to assist, but it didn’t have much staff dedicated solely to the Storm.
Now, the franchise has about 35 full-time employees, not counting the players and basketball operations staff. But it’s a high-turnover business and the owners have a demanding standard, and right now, it would be imprudent for them to adjust by paying top dollar for the staff. They’re growing, but retention is a concern.
The Storm owners are considered cutting-edge businesswomen in a league full of teams trying different things to make the WNBA work as a business. Only 3 of 12 teams reported making a profit in 2011. Half the league is still tied to NBA teams that subsidize them. The other half is independent.
Some are cutting costs. Some are trying to grow. Some are trying to maintain.
In Seattle, the hope is that passion will soon lead to profit. After a photo shoot for this series, Gilder, Dawn Trudeau and Lisa Brummel stood together in the upper concourse of KeyArena, laughing and holding up foam No. 1 fingers. Brummel joked about hot sales on merchandise. If the owners’ enthusiasm factored into profitability, the Storm would be worth $500 million.
Spirit doesn’t have a monetary value, of course, but it gives them the energy to endure.
They’re no sure thing. But they’re laughing despite the long odds.
Jerry Brewer: 206-464-2277 or email@example.com. On Twitter @JerryBrewer.