Football fans should not have to pay for lost revenues

SINCE the pandemic stopped normal life in its tracks, football has been bemoaning the loss of significant sums of matchday income that have pushed some clubs to the brink. 

Eventually, fans will be allowed back in the stadiums and clubs will start generating cash from admission prices. Some clubs will have suffered more than others from the complete removal of a vital revenue stream – we may yet see a few go to the wall or at least tip into administration. 

How will clubs cope if 2020-21 becomes a complete blank? In 2019-20, it was only a partial lockdown in terms of matchday income, there is a possibility that 2020-21 could see the loss of an entire campaign of home games. Non-league football, for example, is being decimated by a lack of cash coming through the turnstiles and that happens to be the prime source of cash for that level of the game.

The bigger the club, the less reliant they are on gate receipts – that’s the general rule. Clubs like Barcelona (18%), Real Madrid (14%), Bayern Munich (11%) and Manchester United (17%) have diverse revenue streams, but lower down the food chain, a club like Nottingham Forest (30%) or Bristol City (29%) need the money from ticket sales.

Most clubs have been fortunate in that the fans have not stormed the stadiums asking for their money back. In fact, the loyal audience that many clubs cherish have been most charitable, often raising money to keep their club afloat. The debt of gratitude that some clubs owe their fans is quite enormous.

But could those very people be the ones that carry the burden of recouping the monies lost over the past two seasons? The corporate world, in other words the major sponsors, are very unlikely to shoulder the responsibility of ensuring their favourite teams come through unscathed. Club owners are also going to try and limit the longer-term damage by recovering losses over the next few years. The alternative is lower wages and who is going to be first to bite that bullet once the all-clear sounds?

It could be that clubs will have to raise their season ticket prices in order to compensate for the pandemic. They are not alone, other industries started to increase their charges when the initial lockdown in the UK was lifted – you cannot blame small traders and businesses that reply on personal contact such as hairdressers. 

It is less palatable when the football industry’s salary structure is so out of touch with reality. Of course, any club chairman or Chief Executive Officer will tell you that unless you pay for performance, you lose players and that’s partially true, but this problem is a universal one – no one country has not be touched by the pandemic. A collective effort led by governing bodies could solve the wage issue.

Will the fans pay higher prices? History tells us they will, because for many years – indeed decades – supporter discontent has never really manifested itself in the form of boycotts. In England, getting a season ticket at a top club is a test of endurance, wallet size and basica good luck. Therefore, nobody is very enthused to show their disapproval by staying away. The fans have been starved of their weekend and midweek rituals and they cannot wait to get back. However, that may have changed with the pandemic. Who will feel relaxed about being in a heaving crowd inside a football ground? It is not inconceivable that fans might have to be coaxed back, at least some of the more vulnerable groups of society.

The fans should not carry the burden because they have kept afloat the one area of income that has been the salvation of some clubs – the commercial department. Making football more expensive will be unfair and a little foolhardy. In reality, we do not know how clubs will react to their falling matchday income, but if they want to see their fanbases as partners and stakeholders, they must do the right thing and put them first in any discussions.

@GameofthePeople

Photo: PA

It costs to watch London clubs like Arsenal, Spurs and Chelsea

IF football is a supply and demand industry in England, then on first glance it appears to be working. Crowds in the Premier League are at their highest level since the 1950s and some clubs have waiting lists for season tickets that stretch back years and years. True, there is an argument that “modern football” is pricing people, notably the traditional working-class out of the market, but the stadium occupancy rates at the top level are well north of 90%. Somebody is buying the ticket.

The theory that fans can be “priced out” is not a new one in football. Even in the game’s early history, not everyone could afford admission prices. For a long time, an old shilling (5p) was the standard fee, but it would often be raised for big games. This was an acute problem in parts of the UK where unemployment was high, such as in south Wales and the north of England.

Football is a discretionary activity but the fans have rarely shown their displeasure at pricing structures – they still line-up for tickets when the most effective way to demonstrate would be to stay away. Likewise, they complain about costly merchandise, but still they buy replica shirts every season. Football remains an addiction to many people.

A recent survey, jointly produced by eToro and KPMG, showed that fans of Premier League clubs are spending more and more in pursuit of their favourite pastime. Over the past five years, total spending has risen by 31% and in 2019-20, the survey estimated that fans will part with around £ 1.3 billion.

Interestingly, while the most expensive season tickets in actual terms are to be found at Arsenal, Tottenham and Chelsea, the disparity in average wages across the country has a bearing on affordability, according to data provided by Sporting Intelligence. For example, Liverpool’s lowest season ticket in 2018-19 was £ 685 representing 3.1% of the average wage in the city of Liverpool (£ 21,762). By contrast, Chelsea’s £ 750 ticket accounts for just 1.8% of the £ 40,788 average wage in that part of London.

Arsenal are the most expensive team to follow (home and away) with an average spend of £ 2,238 for the season. Newcastle United are next, with a spend of £ 2,124 – this figure arguably makes them the most passionate given the lack of success by the club, even if the current situation at St.James’ Park has driven some fans away. The Magpies’ last major trophy was 50 years ago, but still the Geordies love their club. The average cost per fan in the Premier is £ 1,888 which is the equivalent of 8% of the average UK take-home salary.

One of the reasons why Newcastle fans spend so much is their geographical position. They can travel some 9,000 miles per season, which is almost double the Premier League average. Travel costs amount to more than £ 1,500. Mostly, there is a correlation between success and the amount of expenditure by fans.

Clubs with higher prices and higher attendances obviously enjoy greater levels of matchday income, but the gulf between the top and bottom underlines the huge imbalances in English football. Average matchday income in the Premier League, € 37.7 million, a figure only achieved by six clubs. This average is greater than the rest of the big five leagues. The Bundesliga is the nearest competitor with just under € 30 million per club, La Liga comes in at € 26.5 million while Serie A (€ 13.4 million) and Ligue 1 (€ 12.9 million) are way behind.

Manchester United generated £ 110 million in matchday revenues, which equated to 19% of overall revenue in 2017-18. Huddersfield, with the lowest cheapest ticket (£299), generated just £ 5 million in matchday income, which was just 4% of their overall total. The average across the Premier in 2018 was 14%, a figure that is exceeded by the broadcasting income received by clubs.

KPMG said the overall cost of tickets between 2014 and 2019 has remained stable with an overall increase of just 1%, which is significantly below the rate of inflation. Although people continue to complain about ticket prices, it should be noted that current pricing models have been firmly embedded in the system for some time. Between 1989 and 1999, top flight ticket prices rose by 312% in a time when the retail price index increased by 54.8%. By 2011, there were suggestions that some clubs had increased ticket prices by 1,000% over a 20-year period.

Where fan spend has increased substantially is in paying for TV subscriptions, which are now seen as a vital part of being a dedicated follower of football. While the main pay-per-view channels are seemingly on the decline – Sky’s subscribers in 2019 total around 8.6 million, there is more diverse competition for viewers. A Premier League game screened by SKY can draw between 250,000 and 1.5 million people, small beer when compared to the 26 million that saw England play Croatia in the World Cup on mainstream channels. Expenditure by fans on TV subscriptions has increased by 40% since 2014-15 and form around 25% of a fan’s overall outlay on the game. Both BT and SKY’s current subscriptions are heading towards £ 500 per season.

Merchandise spend has grown by 21%, hardly surprising considering the marketing effort that gets behind new shirts and other products. The most expensive replica shirts are at Manchester City, Manchester United, Chelsea, Tottenham and Newcastle, all costing £ 65. Mostly, shirts have gone up almost 20% in the past five years, but still they fly off the shelves – Manchester United sell around 1.85 million per season, Liverpool now dispose of over one million, while Arsenal and Chelsea sell over 800,000 per season each.

Football fans will always find a way of raising the cash they need to watch their favourite team. Newcastle United and Liverpool both spend around 14% of disposable income on following their clubs. This is a reflection of the relatively low average wage in these areas, but also indicates the lengths that these supporters will go to in order to watch their team. Andrea Sartori of KPMG Football Benchmark, said in the company’s report: “The financial commitment of UK football fans is remarkable…although the Premier League has become a global entertainment product with a worldwide audience, dedicated and engaged returning fans are still the heart and soul of clubs.”

Football in the UK has to be cautious, however, for all good things do come to an end. Football is a market and all markets have the potential to create bubbles. The crowds and the TV money are both at a high at the moment, but how long can that continue? If there is another financial crisis – and these things are cyclical – the bubble could burst. Clubs also need to be aware of changing demographics, the Premier audience is able to afford high prices because it is relatively mature with an average age of 40-plus. Considering these factors, the Premier League can ill afford to be complacent about its future.

@GameofthePeople

Photo: PA

Opium for the masses – the cost of Premier addiction

IF football is a supply and demand industry in England, then on first glance it appears to be working. Crowds in the Premier League are at their highest level since the 1950s and some clubs have waiting lists for season tickets that stretch back years and years. True, there is an argument that “modern football” is pricing people, notably the traditional working-class out of the market, but the stadium occupancy rates at the top level are well north of 90%. Somebody is buying the ticket.

The theory that fans can be “priced out” is not a new one in football. Even in the game’s early history, not everyone could afford admission prices. For a long time, an old shilling (5p) was the standard fee, but it would often be raised for big games. This was an acute problem in parts of the UK where unemployment was high, such as in south Wales and the north of England.

Football is a discretionary activity but the fans have rarely shown their displeasure at pricing structures – they still line-up for tickets when the most effective way to demonstrate would be to stay away. Likewise, they complain about costly merchandise, but still they buy replica shirts every season. Football remains an addiction to many people.

A recent survey, jointly produced by eToro and KPMG, showed that fans of Premier League clubs are spending more and more in pursuit of their favourite pastime. Over the past five years, total spending has risen by 31% and in 2019-20, the survey estimated that fans will part with around £ 1.3 billion.

Interestingly, while the most expensive season tickets in actual terms are to be found at Arsenal, Tottenham and Chelsea, the disparity in average wages across the country has a bearing on affordability, according to data provided by Sporting Intelligence. For example, Liverpool’s lowest season ticket in 2018-19 was £ 685 representing 3.1% of the average wage in the city of Liverpool (£ 21,762). By contrast, Chelsea’s £ 750 ticket accounts for just 1.8% of the £ 40,788 average wage in that part of London.

Arsenal are the most expensive team to follow (home and away) with an average spend of £ 2,238 for the season. Newcastle United are next, with a spend of £ 2,124 – this figure arguably makes them the most passionate given the lack of success by the club, even if the current situation at St.James’ Park has driven some fans away. The Magpies’ last major trophy was 50 years ago, but still the Geordies love their club. The average cost per fan in the Premier is £ 1,888 which is the equivalent of 8% of the average UK take-home salary.

One of the reasons why Newcastle fans spend so much is their geographical position. They can travel some 9,000 miles per season, which is almost double the Premier League average. Travel costs amount to more than £ 1,500. Mostly, there is a correlation between success and the amount of expenditure by fans.

Clubs with higher prices and higher attendances obviously enjoy greater levels of matchday income, but the gulf between the top and bottom underlines the huge imbalances in English football. Average matchday income in the Premier League, € 37.7 million, a figure only achieved by six clubs. This average is greater than the rest of the big five leagues. The Bundesliga is the nearest competitor with just under € 30 million per club, La Liga comes in at € 26.5 million while Serie A (€ 13.4 million) and Ligue 1 (€ 12.9 million) are way behind.

Manchester United generated £ 110 million in matchday revenues, which equated to 19% of overall revenue in 2017-18. Huddersfield, with the lowest cheapest ticket (£299), generated just £ 5 million in matchday income, which was just 4% of their overall total. The average across the Premier in 2018 was 14%, a figure that is exceeded by the broadcasting income received by clubs.

KPMG said the overall cost of tickets between 2014 and 2019 has remained stable with an overall increase of just 1%, which is significantly below the rate of inflation. Although people continue to complain about ticket prices, it should be noted that current pricing models have been firmly embedded in the system for some time. Between 1989 and 1999, top flight ticket prices rose by 312% in a time when the retail price index increased by 54.8%. By 2011, there were suggestions that some clubs had increased ticket prices by 1,000% over a 20-year period.

Where fan spend has increased substantially is in paying for TV subscriptions, which are now seen as a vital part of being a dedicated follower of football. While the main pay-per-view channels are seemingly on the decline – Sky’s subscribers in 2019 total around 8.6 million, there is more diverse competition for viewers. A Premier League game screened by SKY can draw between 250,000 and 1.5 million people, small beer when compared to the 26 million that saw England play Croatia in the World Cup on mainstream channels. Expenditure by fans on TV subscriptions has increased by 40% since 2014-15 and form around 25% of a fan’s overall outlay on the game. Both BT and SKY’s current subscriptions are heading towards £ 500 per season.

Merchandise spend has grown by 21%, hardly surprising considering the marketing effort that gets behind new shirts and other products. The most expensive replica shirts are at Manchester City, Manchester United, Chelsea, Tottenham and Newcastle, all costing £ 65. Mostly, shirts have gone up almost 20% in the past five years, but still they fly off the shelves – Manchester United sell around 1.85 million per season, Liverpool now dispose of over one million, while Arsenal and Chelsea sell over 800,000 per season each.

Football fans will always find a way of raising the cash they need to watch their favourite team. Newcastle United and Liverpool both spend around 14% of disposable income on following their clubs. This is a reflection of the relatively low average wage in these areas, but also indicates the lengths that these supporters will go to in order to watch their team. Andrea Sartori of KPMG Football Benchmark, said in the company’s report: “The financial commitment of UK football fans is remarkable…although the Premier League has become a global entertainment product with a worldwide audience, dedicated and engaged returning fans are still the heart and soul of clubs.”

Football in the UK has to be cautious, however, for all good things do come to an end. Football is a market and all markets have the potential to create bubbles. The crowds and the TV money are both at a high at the moment, but how long can that continue? If there is another financial crisis – and these things are cyclical – the bubble could burst. Clubs also need to be aware of changing demographics, the Premier audience is able to afford high prices because it is relatively mature with an average age of 40-plus. Considering these factors, the Premier League can ill afford to be complacent about its future.

@GameofthePeople

Photo: PA