GROW
BUSINESSTOOLS
Economy Central presented by
ECONOMY CENTRAL
Who’s Calling the Shots? Businesses can learn about shifting power dynamics by looking at the WNBA. By King Banaian and Lynn MacDonald
W
e all aim for success in life and in business. Yet the journey, and even success itself, often brings persistent challenges. Consider the following example: you hire a few workers to build up your existing line of business and you are barely getting by for a while. Then, unexpectedly, you get a large group of new customers and rapidly increase revenues. Your workers now ask to share in these unexpected gains. Over the past two years, the Women’s National Basketball Association (WNBA) has faced this exact scenario. The WNBA and the players’ union have been engaged in contentious contract negotiations. This contention
spilled over last fall when the Minnesota Lynx star player and Union Officer Napheesa Collier publicly criticized the WNBA’s commissioner over the lack of progress on players’ issues, calling out the WNBA for having the “worst leadership in the world.” To understand the problem, go back to January 2020, when the previous collective bargaining agreement (CBA) was signed. At the time, it was seen as a large step forward for women’s professional basketball, with maximum salaries nearly doubling and a 35 percent increase in the total payroll each team was allotted. Two unexpected, but positive, events turned what seemed like a good
deal for the players into a bad one. First, when the COVID-19 pandemic hit in March 2020, most summer leagues were closed and sports networks were desperate for programming. The WNBA and NBA both continued to play games “in the bubble.” These games were played in a strictly-controlled environment that allowed TV and journalists to be present, but otherwise arenas were empty. This national coverage brought new fans. Attendance subsequently increased, along with media coverage and franchise valuations. Second, when the previous CBA was signed, Caitlin Clark was still a high school senior. Four years later, she enters the league and immediately rockets to the top of its recognizable all-stars. Fan interest soared, revenues for the league skyrocketed, and the players asked to receive their share. The league expanded and continues to do so, bringing in expansion fees for existing owners, new sponsorships, and new TV/media contracts that will deliver millions more. While this was happening, Caitlin Clark’s, and other 2024 rookie contracts, paid approximately $76,000. By January 2026, negotiations over a new CBA had stalled, halting free-agent signings and the expansion draft, and leaving the season in limbo. Business leaders can see this in their own relationships
Contributors ________ King Banaian, Ph.D., is director of the Center for Policy Research and Community Engagement and professor of economics at SCSU. Lynn MacDonald, Ph.D., is co-director of the Center for Economic Education and associate professor of economics at SCSU.
22
BusinessCentral Magazine.com // M A R C H / A P R I L 2 0 2 6
with employees and with other businesses. The WNBA, like other businesses, has a salary structure that rewards seniority. Using seniority-based pay makes it harder to reset compensation when demand surges, particularly when the local labor market is tight. Shifting power dynamics are at play here. We see evidence of the role of changing power dynamics in a variety of ways. In real estate, it is common to hear “location, location, location.” Having the right location can create potential windfalls. New property development sometimes increases property values around it. Recognizing the potential windfall, one property owner delays the development of others to try to capture additional profits. This also happens between businesses, like a mall developer who attracts an anchor tenant and builds improvements for that tenant. When the lease is up, the tenant says, “We know you need us for this mall to work, so reduce our rent.” Or, a franchisee invests heavily in her store, only to have the franchisor raise fees, taking advantage of her commitment to the brand. Leadership is just as often how you deal with unexpected success as unexpected loss. Learning to recognize shifting power dynamics early, proactively engaging in steps toward meeting business goals, and recognizing the human element, may help reduce contentious situations and challenges on the path to success.