Football ticket prices are in a league of their own

As ever, there are several sides to this question. I have always been strongly in favour of anything that takes money out of the economy that would otherwise be competing with my money for my preferred goods and services. So, very high prices for watching football matches, high duties on gambling and tobacco, and high charges for mobile phone contracts and satellite TV, don’t bother me much. But . . . I realise there is a downside: overcharging for popular pleasures inevitably, for some people, leads to a degree of financial hardship, debt, family neglect, illness, moral hazard, criminal behaviour, and other consequences that are a cost to our society at large.

Watching soccer on a weekend afternoon remains an extremely popular activity and, if the atttendance at my local team Norwich City is any guide, it involves whole families across three or four generations. This is wholesome [mostly], friendly, community-spirited, participative, and entertaining. I think it is, truly, a very good thing, and that those partaking should not be exploited. In an ideal open market there would be some competition for the public’s support, but the game is heavily regulated and controlled so that there are limited opportunities to watch top-class football live, the barriers to entry are formidable, if not to say prohibitive, for the formation of any new clubs and grounds, and the overall seating capacity is severely restricted so the most attractive teams cannot just admit thousands of additional spectators. It is possible that there is some degree of authorised collusion in this, exercised through the governing bodies, that in any other field of commerce would be declared anti-competitive. Leaving aside the question of footballers’ wages that seems to come up in every discussion on this topic, with the top teams coining it in from TV rights and sponsorship, advertising and ancillary sales, the fans should be able to go in for nothing, but the fighting at the gates would probably cause serious public order problems. So admittance has to be rationed and the price mechanism crudely achieves that; there is probably, overall, an equilibrium between supply and demand, and the cycle of Home and Away games – combined with the irregular fortunes of the FA Cup – probably smoothes out excessive distortions except when the uppermost top teams play each other.

John Ward,

Great comment, thanks.

I think there is a point to make about players wages, albeit not quite the one that is normally made.

Wages at the elite level are, of course, extremely high. But if , for example, Chelsea wanted a new left back, there are only maybe one or two in the world that could do the job to a higher standard than their existing left back. As a result, potential signings will charge a premium for their services. There is a basic supply and demand at work at the elite level, even if most people find the wages top players earn obscene. Top clubs charge high ticket prices because they know they will still sell out even though they don’t necessarily need the money, as they get plenty from Sky.

However, the bigger problem, in my view, comes lower down the leagues. Wage inflation at the top level leads to wage inflation lower down, with unscrupulous owners paying over the odds for mediocre players. Those owners that try and run their clubs in a sustainable way struggle to compete. Because they don’t have the TV money that top clubs get, they put up ticket prices in order to fund wages, which represent a massive proportion of revenues for most clubs.

So smaller clubs with loyal fans, but limited numbers of potential new fans, keep prices high because they have little choice – where else are they going to get the revenue to pay the wages? If they don’t pay competitive wages they will eventually get relegated.

A lot of good points there Harry – the economic drivers of the game are exceedingly powerful and complex. The rewards of promotion and the adverse consequences of relegation are so immense that they do affect the character of the sport. The buying and selling of players [through shadowy intermediaries] for collossal sums, and the whistle-sharp firing of managers, suggest to me that the tycoons who are in command at the higher levels are actually getting their thrills in the board room rather than from the pitch.

Well put, John.

There’s another interesting point about about Germany here – as I understand it, private investors can only own up to 49% of a club. The majority stake must be owned by club members – fans, essentially.

Not entirely unrelated to their cheap ticket prices, I suspect.