Tuesday, September 16, 2003

The Women’s United Soccer Association, plagued by minimal attendance and TV ratings since its formation, folded yesterday after three years of play and more than $100million in fiscal losses.

The announcement is not a complete surprise. Several investors, including Comcast Corp., privately indicated they wanted to reduce or cease their investment. And a major cost-cutting effort last winter, one that included substantial pay reductions for players and front-office employees, failed to improve the WUSA’s troubled fiscal outlook.

But the timing of the move, just five days before the start of the 2003 Women’s World Cup, came as a shock. Fifty-six current and former WUSA players, including league icons Mia Hamm and Brandi Chastain, are on national team rosters for the tournament. And just as the U.S. team’s dramatic triumph in the 1999 Cup on home soil gave rise to the WUSA, league officials hoped another thrilling tournament, again held in America, would further boost the league.

John Hendricks, WUSA founder, said in addition to the start-up losses, the eight-team league also was struggling under an annual revenue shortfall of about $20million. With average attendance dropping from 8,104 a game in 2001 to 6,667 this season and TV ratings flatlining at just one-tenth of 1 percent of homes with cable TV, greater pressure was put on corporate sponsorship.

Only two companies, Hyundai and Johnson & Johnson, purchased “charter” sponsorships of at least $2.5million a year. League officials said they needed at least eight such charter sponsors to keep going.

The unanimous vote to shut down came during a Board of Governors meeting yesterday afternoon in New York.

“There just wasn’t enough money to keep going,” said Hendricks, also the chairman of Silver Spring-based Discovery Communications. “We regret the timing of this, but we had to act today. It is a sad day for us.”

Technically, the WUSA suspended operations and Hendricks said “a glimmer of hope” exists to resurrect the league at some future point. Founding players such as Hamm, Chastain, Julie Foudy and others will now seek to find additional corporate support for the league. But league employees have been terminated, offices will be shuttered in a matter of weeks, and legal work has begun to dissolve the WUSA formally.

The timing of the announcement also was driven by a desire to avoid bankruptcy proceedings, as well as provide some severance pay to employees.

Hendricks also acknowledged the WUSA’s initial business plan overestimated potential corporate investment in the sport.

“I was intoxicated by what I witnessed in 1999, and I mistakenly believed that level of [corporate] support would flow over into the league,” he said.

Yesterday’s announcement resonated strongly in Washington. The Freedom and RFK Stadium played host to the WUSA’s debut game in 2001, a contest played before 34,000 on a bright April day. The Freedom, sparked by Hamm, went on to lead the league in attendance each of the three years of play and won this season’s WUSA championship in dramatic fashion.

“I’m so proud of what the players accomplished and our incredible fan base,” said Katy Button, Freedom general manager. “These players, however, did understand the challenges for them. We have players on the board. They certainly were aware. It’s a tough time economically. Everyone has been affected, certainly us included.”

The loss of the Freedom will mean a drop in annual lease revenue of between $250,000 and $350,000 to the D.C. Sports & Entertainment Commission, operators of RFK Stadium. It’s not a crippling sum, but the loss arrives just as the commission tries to pare expenses and end its own string of several years of operating losses.

“This is not about Washington. The fans were the best in the league,” said Bobby Goldwater, sports commission executive director. “But this is certainly an unfortunate development.”

In an effort to make itself more attractive to both potential sponsors and investors, the WUSA began to move from a single-entity model, in which the central league office controls all player contracts and most expenses, to a modified franchise model. The change would have provided teams more local control over marketing, ticket sales and sponsorship.

But the move clearly was too little, too late.

“Although we are disappointed by today’s action, we believe this decision has no impact on the future viability of the sport of soccer in the United States,” said Major League Soccer commissioner Don Garber.

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