Premier League tickets – will prices ever stop rising?

The price of watching football in the UK has been the topic of much discussion in the press recently, with many questioning why fans are being forced to spend so much money to watch their teams play.

It has been clear for a long time that many supporters are being priced out of buying tickets, with Arsenal, the most expensive Premier League club, charging over a thousand pounds for even their cheapest season tickets.

The cheapest season ticket you can buy at a Premier league club averages at over £500, showing that this is not a problem reserved for the most successful and popular clubs.

The BBC’s price of football survey has raised many questions about whether these extortionate prices can be allowed to continue, and whether or not clubs will take action to combat them. Many fans are pushing their teams to reduce ticket pricing, and allow them to watch live football without having to make such large financial sacrifices.

The amount of money clubs make from TV rights is constantly on the rise. Cardiff City, last season’s bottom club, raked in 63.7 million pounds from TV and prize money, 3 million more than Manchester United earned by winning the league the previous year.

Many fans would hope that this enormous influx of money would be used, in part, to make ticket prices cheaper for them. In reality, however, this has not happened. Clubs have kept their prices at the same level, or in some cases, raised them even higher.

One reason for this is that, despite the high prices, fans are still buying tickets. Average attendance has risen again this season, with well over 90% of Premier League tickets being sold. Clubs have no economic incentive to drop their prices while demand continues to rise.

The Premier League is eagerly followed by more fans than ever before, with the increased TV exposure attracting more and more supporters both domestically and abroad. More fans equals higher demand, and hence, given the supply of tickets has broadly stayed the same – higher prices.

Another reason that clubs don’t cut their prices is because of the ever-increasing cost of wages and transfer fees needed to attract players.

While clubs continue to get more and more revenue from TV money and sponsorship deals, they are simultaneously faced with the spiralling costs of acquiring and paying players. The average wage bill of premier league clubs has risen again this season, and every club must try to match this rising standard, or risk not attracting the best possible players.

Any club moving money away from attracting players and into cutting ticket prices would be giving their opposition a competitive advantage, as they would be better able to compete in the transfer market.

The rocketing cost of wages in football has been addressed recently, with the Financial Fair Play regulations coming into force in the 2011-2012 season. These regulations, however, have done very little to prevent the increasing costs clubs face in paying their players.

The new rules still allow clubs to increase their wage bill by four million pounds every year, plus any revenue gained from commercial deals, and they give no overall salary cap for football teams or players.

Because of this, the FFP rules have created only the tiniest dent in the ever-expanding wage bills of Premier League teams, and have given them no incentive to spend their revenue on cutting ticket prices, rather than in the transfer market.

Many fans may ask, however, why the same pressures don’t seem to apply for Barcelona and Real Madrid, both of whom offer season tickets for less than 200 pounds, despite being the most popular clubs in the world.

They pay even greater wages than Chelsea or Man City, so it seems strange that they can offer tickets at such low prices.

These clubs have advantages in revenue that no Premier League club possesses however. They make more money by selling merchandise than any other clubs, and almost half of the money from TV rights in Spain go to Real Madrid and Barcelona, whereas the Premier League distributes these funds more evenly.

With these advantages in place, Madrid and Barcelona don’t need to allocate all of their marginal revenue into the transfer market, as there aren’t any teams who can out price them or lure away their players. For this reason, they are able to offer lower ticket prices, and increase the morale of their fans, without it greatly affecting their competitive abilities.

German fans, moreover, pay less to see their teams play throughout the Bundesliga than we do in the Premier League. This, however, is accounted for by lower average wages, and by standing areas allowing clubs to sell more tickets and gain more revenue.

The bottom line is that, given the financial circumstances of the Premier League at the moment, clubs are unlikely to reduce the price of their tickets at all, as they are selling out their grounds already, and need to allocate all of their available money on the salary war that continues to be fought between clubs.

Without proper regulation of the market, including a salary cap and limits on the amount teams can spend on transfers, clubs will be forever forced to prioritise their increasing wage demands over cutting prices. This means that tickets will remain too expensive for many fans, and will continue to rise in the near future.

Should Economics be more mathematical?