How Joe and Clara Wu Tsai turned Liberty into a WNBA contender and a New York institution

In 2019, the New York Liberty was a real eye-catcher. James Dolan, unable to shake off the loss-making WNBA franchise for more than a year, had moved the team, led by Isiah Thomas, from Madison Square Garden, where it had hosted four WNBA Finals, to Westchester County Center , a 90th anniversary – old, barrel-vaulted, antique venue in White Plains. Attendance, once the linchpin of WNBA attendance, had fallen to a league-low 2,200 per game, exacerbating the league's overall financial woes. His record is a miserable 7-27.

Enter Joe and Clara Wu Tsai, then 49% owners of the Brooklyn Nets but on their way to control. Clara Wu Tsai, who had previously said in a slap at Dolan that she didn't understand why the owners had stopped investing, told Athletic last week: “Nobody wanted to touch it.” If the W didn't take it to the basketball capital of the world could do it, were his days numbered?

Ultimately, it became a fire sale, but as Wu Tsai told The Athletic's Mike Vorkunov and Ben Pickman and ESPN's Michael Voepel, she and her husband saw an opportunity and believed in the New York media market.

“We recognized the business potential of a professional women’s basketball team, especially one in New York City,” she told Voepel for a Liberty story published earlier this week. “There has been a passionate Liberty fan base since the beginning of the league. We believed we could build a championship caliber team that would bring back the original fans and attract new, passionate fans.”

Seeing what Dolan and Thomas couldn't do, they put down some money, but not much. As The Athletic also reported in June 2022:

According to league sources, the Liberty were sold without much new money changing hands, and new owner Joe Tsai financed the transaction primarily by taking on debt as well as providing MSG Sports with fresh capital when the Liberty met certain revenue thresholds reached. The deal only came about after the NBA asked several league owners to take over the franchise as it had been stagnant on the market for more than 14 months, sources said.

CNBC reported that same year that somewhere between $10 million and $14 million changed hands.

They then moved the team back to the city and set up their office next to the Nets at their other major location: the Barclays Center. After the purchase but before the move, Tsai came to New York to promise his skeptical players that things would get better.

Then COVID intervened and the league faced another crisis. It was strapped for cash and in danger of going bankrupt for 20 months if they didn't finish the 2020 season. It was a close decision, as Vorkunov and Pickman write.

The league introduced the “Wubble” which helped the league greatly and in some ways caused people to think more seriously about a number of issues affecting the future of the league, from finances to the need for better player facilities, starting with charter flights.

In early 2021, the Tsais showed leadership in the financial aspect of league growth, as the Athletic writers report.

In early 2021, the WNBA released a pitch deck for investors. The process was driven in part by the Liberty ownership group, which also includes the Brooklyn Nets and Blue Pool Capital, a private equity firm. “At that time, we really needed this capital injection,” Wu Tsai said.

The league needed the money for the most basic elements of growth: workforce, marketing, brand building, digital innovation.

They got more than they bargained for, with Michael Dell and Nike raising the bulk of the $75 million capital raise. The Tsais also took part. In the end, the new investors owned 16% of the league's shares, with the governors of the WNBA and NBA sharing the rest. (That gave the Tsais three votes in the W future. They are the only governors to own their own WNBA team, an NBA team and part of the new investment vehicle.)

Their aggressiveness sometimes got them into trouble with the league's weaker ownership groups. In 2021, when the Liberty quietly violated league policies banning charter travel and booked their own flights, the league was thrown into turmoil. Other owners saw that the Tsais were trying to gain a competitive advantage and fined them $500,000 (after considering even more draconian measures, such as expulsion from the league).

The $500,000 fine became a high-profile investment, as more than one NBA and WNBA executive has noted. If the Liberty owners were willing to take such a big financial hit to ensure player comfort, the free agents said, then count me in! The Liberty started building slowly, signing Sabrina Ionescu in 2020, considered a transformative player, then signing two former MVPs in Breanna Stewart and Jonquel Jones, as well as Courtney Vandersloot, the W's leader in assists and finding diamonds in the rough, Leonie Feibich and Benijah Laney-Hamilton and investing in a proven head coach, Sandy Brondello.

Wu Tsai even flew to Istanbul two summers ago to woo Stewart, a North Syracuse native.

And as we noted in 2019, the Liberty's biggest move may have been hiring Jonathan Kolb as GM. Kolb, who worked at WNBA headquarters, is considered a systems person with an eye for analysis, which isn't quite as popular in the women's league.

As Vorkunov and Pickman wrote:

By reaching the Finals, New York has been re-energized and is viewed across the league as one of the franchises responsible for raising the bar…

They have also transformed the squad and the business. New York's home opener against the Indiana Fever recorded $175,000 in merchandise sales, a single-game record for the Liberty and the Nets. Attendance averages almost 13,000 fans per Liberty home game, 64 percent more than last year. They have 53 sponsors, an increase of almost 61 percent from last year, and revenue from such partnerships increased by 68 percent. Wu Tsai said the franchise is on the path to profitability.

“I couldn’t be happier with the demand for tickets to our games, the interest from sponsors and the viewership,” said Wu Tsai.

When the Tsais sold a 15 percent stake in BSE Global this summer, the Liberty portion of the deal was valued at $200 million, a very nice profit in the five years since James Dolan essentially gave the franchise away. Wu Tsai told a group of other Harvard graduates earlier this year that she expects the Libs to be the first women's sports team valued at $1 billion. (The Nets should have just as much luck with the Mikal Bridges trade.)

Of course, a win helps, and the Liberty are in their second WNBA Finals in two years after losing to the Aces last season. But it's more than that. A Liberty game at Barclays Center is an event. Ellie the Elephant, the team mascot, gains about 2,000 followers on Instagram every week and is the mascot of the day in professional sports. Celebrity Row, officially CeLiberty Row, attracts as many star players as the Knicks' legendary courts. Spike Lee, the Brooklyn man who has long been the anchor of the MSG gang, is now sitting courtside alongside Wu Tsai at the finals in sea foam and green!

Wu Tsai has said that the Liberty is primarily her responsibility and the Nets are Joe's responsibility, but she also plays a role with the Nets and reportedly helps resolve issues between their former superstar players and management. Some jobs are thankless.

On Sunday, the Barclays Center sold out the Liberty for its Game 2 win over the Minnesota Lynx with 18,040 spectators, its largest crowd to date. Earlier in the day, 2,500 Nets fans showed up at the Potomac Playground in Bed-Stuy for their annual practice at the park, but it also proved to be a pep rally for the Liberty, with more than a few players, fans and staff decked out in a combination Black and white and sea foam black gear. Cross-pollination of fandom becomes a thing, a new York Thing.

There have also been reports that the Liberty will be the next WNBA team to have their own practice facility somewhere in Brooklyn, likely like the Nets, not far from Barclays. Another big investment.

Now all we need is a parade!