US Soccer decided to settle a suit by the Women's national team in order to split the prize money equally between men and woman, but is it fair?
Last week, women’s Association Football was on the headlines. In Europe, Olympique Lyonnais Féminin won its record-extending 8th UEFA Women’s Champions League. In the United States, US Soccer settled a lawsuit by the US Women’s National Team in the case that has been framed as “equal pay”, which sounds straightforward except it is not.

For those unfamiliar with football, it sounds obvious and intuitive that men and women should be paid the same if they are doing the same job. In the end, the rules are similar, they both have a World Cup, and they both have to train very hard. In general, men and women should be paid the same for the same jobs.

Except that Association Football is within the entertainment industry. This means that unlike another industry such as manufacture, where a physical product is the output, in this case the output is the entertainment value, which then is assessed by the fans and sponsors. With more attention, usually that means that the leagues and teams have better revenue and are able to pay more.

This case, however, is not even about the leagues. The men’s clubs will continue to pay more than the women’s clubs insofar as they generate more revenue and are able to do so, meaning the highest paid men footballers will be paid more than the highest paid women. What will happen here is that the Men’s National team will subsidize the earnings of the women’s national side with the prize money they earn.

The lawsuit by the US Women’s team was dismissed last year insofar as it was found that the women’s national team actually earned more than the men’s, considering the fixed salary as well as the benefits they would receive, which men mostly already receive from their own clubs.

It had been the women’s team that opted for this arrangement instead of one with no base salary but a “pay for play” scheme where players are paid for each match they take part of and the prize money earned.

Although it was dismissed, the women’s time appealed for a third time, this time utilizing the resources of media and politics, prompting outsiders such as then-Presidential candidate Joe Biden, to lambast against US Soccer without knowing much about the case.

Eventually, US Soccer has decided to settle instead of continuing the case. This might be a sound business decision: they are taking the politically correct stance that might be popular among fans, and that might avoid backlash from the Government and sponsors.

What the settlement entails is that the payment will remain the same, meaning the women’s team will remain with the better pay overall, but will also receive the benefits of the other potential arrangement they had, meaning they will also receive the benefits of a structure that is based on prize money.

In the end, what will happen is that the Men’s and Women’s teams will join their prize money -which is significantly greater for the men’s side- together, and split it equally. In essence, the men’s team will be subsidizing the women’s side, with their World Cup participation.

The prize money is distributed to the national federations by FIFA. It is significantly higher for men insofar as the Men’s World Cup is the largest single-sport tournament in the world, in terms of audience and revenue.

Since this is entertainment, this is similar as if the stars of the biggest movie or theater production would subsidize the actors of a smaller film or production, except without a say.

It is fair to say that the men’s players will not suddenly hit financial trouble because of this subsidy to the women’s side -and it is also fair to say that any business is on its rights to subsidize a business unit with low or no profit with a non-profitable one for reasons such as future expectations, or stakeholder interest.

This was a decision that was taken not because it is he most fair -it might be, but it is not straightforward- but it was mostly to appease the crowds, aided by politicians capitalizing on this issue. As such, it should not be expected that this will happen in other countries, unless similar conditions of outside pressure exist.