Thursday, May 5, 2011

Tickets in the EPL

J Hutcherson writes of some lessons that EPL clubs can draw from North American sports teams in regards to ticketing for matches.

A couple of English Premier League clubs decided to give their fans and the rest of the League a reminder that winning costs money. Manchester United and Arsenal raised ticket prices for next season. In actual terms, neither did as well as a major North American team sport near you.

Tickets are still relatively inexpensive for what most of us consider the best professional club soccer in the World. Though the English papers might want us to be as outraged as their headlines at Manchester United raising their prices across the board… by a buck sixty-five a ticket, most of us probably aren’t that easily aggravated.

Manchester United even has a solid reason, the percentage of the sales tax applied to the tickets increased at the start of 2011, but United didn’t raise prices to compensate. Next season they will. Arsenal’s rationale isn’t quite as straightforward. They’re already top of the expensive ticket table, and are now asking for more if fans want to keep their seats for 2011-12.

How much more? Around the cost of an extra individual ticket and still not even in the conversation when it comes to what North American fans are used to paying in the major sports.

For all of the sports business techniques and tactics the Premier League has adopted in recent years, using tickets as a money stream hasn’t exactly translated. Permanent seating licenses like those that NFL teams started using in the 90’s aren’t common in England. Single game tickets moving easily into the three figures aren’t either. There’s also not the implied idea that a successful team that wins games and sells out their stadiums shouldn’t be raising ticket prices while turning large profits.

It’s that last one that tends to get English clubs in trouble. As the thinking goes, if the club is making money it should be reinvested in the club. Short of that, it should be used to subsidize the cost of tickets. The supporters aren’t supposed to end up a strong secondary revenue stream, much less the primary revenue stream for clubs at this level. That’s the role of rights fees, sponsorship, and to some extent the transfer market. Put that burden on the fans and they expect the club to be pouring close to or all of its revenue back into the club as well.

Enter former Major League Soccer executive and current Arsenal chief executive Ivan Gazidis. He wrote to his own club’s supporters' trust to let them know their club realizes they’re getting to the point of asking for too much from their fans. It didn’t stop them, once again stressing the need to compete and the role gate receipts play specifically for Arsenal. How far this gets them is an open question in both directions.

North American sports have shown they’ll take as much as they can get when it comes to maximizing ticket revenue. There’s not a lot of shame in the four figure courtside seat in basketball. Baseball introduced variable pricing so you pay more to see the better away teams along with paying more if you buy your ticket the day of the game. That’s not to mention the cost of playoff tickets in North American leagues should your club actually succeed. Even historically inexpensive sports like the lengthy regular season in Major League Baseball get surprisingly expensive once you get past the cheap tiers.

This is not where we do a quick comparison with Major League Soccer. As a fixed cost league with a low regular salary cap, it’s not a fair comparison with teams pouring millions of dollars into their squads and capable of generating significant sponsorship, licensing, and TV revenue. The Premier League comparison are the major American sports where the expectation is that the fan is seeing the highest level available and paying accordingly.

It’s a compliment to both the fans and their clubs in England that they’ve held a line on ticket prices for this long. From a North American perspective, the expectation should be premier costs for Premier League quality. I would hazard to guess that there are those within the Premier League who would like to go ahead and charge accordingly.

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