Ticket Price Ceilings: Keeping English Football Affordable
By Jonathan Fu
Football is the lifeblood of countless communities throughout England. Whether it be the European giants Liverpool FC with an average match attendance of over 50,000 people or the minnows of the English fifth-tier Wrexham AFC with an average match attendance of over 3,000 people, football continues to serve not only as entertainment but also as a unifier for English communities. In order to keep the sport affordable and accessible to the average fan, many English football leagues and teams artificially impose a ceiling on ticket prices. For example, the Premier League recently decided to maintain its $30 price cap on away tickets (for fans attending games at opposition stadiums) until 2025. And yet, in a world increasingly dominated by potent billionaires, aggressive investment firms, and grandiose media deals, there is a growing fear that the affordability of English football is at risk. However, as demonstrated by the recent resistance of both owners and fans against raising ticket prices, there are several reasons to believe that the affordability of English football will continue.
When viewing football club owners as materially self-interested and short-term optimizers, it may be difficult to understand why they often resist raising their ticket prices. Indeed, football clubs have extraordinarily high demand. Liverpool FC already has approximately 27,000 season ticket holders, and yet the season ticket waiting list has been closed for five years and stretches over 70,000 fans long. Raising ticket prices would certainly lower the overall demand, but stadiums would likely still be full regardless. These ticket price caps hurt the bottom line of clubs and prevent those with more resources from acquiring enough tickets. In fact, raising ticket prices would allow people who are willing to pay more per ticket to purchase tickets. From this perspective, it may seem that raising ticket prices would benefit both owners and supporters.
However, when taking into consideration the long-term outlook and underlying incentives of many football club owners, raising ticket prices would be an ill-advised decision. Aside from their own personal beliefs, football club owners have a general incentive to hold utilitarian preferences with the goal of maximizing the overall well-being of all football fans. Indeed, by maximizing the well-being of all their fans despite their financial background, the owners maximize the overall reach and brand of their football club (which in turn also increases lucrative media revenue) while also improving their public reputation in the long-term. Indeed, in the current Premier League, the average owner tenure is around 10 years, a relatively long period of time. The owners may still be materially self-interested in the long term, but that is irrelevant if that material self-interest continuously benefits the larger fan population. Although many football club owners are businesspeople at their very core, they are driven by their desire for long-term growth to maintain the affordability of football for the average consumer.
Some skeptics may argue more generally that ticket price ceilings actually negatively impact consumers since they further increase the demand for an already limited supply and also cause football club owners to lower the quality of the fan experience, whether it be on or off the pitch. Indeed, such detractors may refer to the example of rent control, where price ceilings cause an undersupply of housing and disincentive landlords from maintaining the overall quality of their housing. These fears are unjustified on two counts. First, they assume that football club owners rely solely on ticket sales for income. However, unlike landlords, football clubs have many different sources of income, including ticket sales, sponsorships, jersey sales, and media rights. Second, these fears assume that some analogous government, perhaps a league board or larger regulatory body, is driving football club owners towards capping ticket prices. In contrast, it is actually football club owners—not the leagues or regulatory bodies themselves—who are actively pursuing and implementing ticket price ceilings, and are motivated to do so.
In a market as multifaceted as English football, the optimal business strategy may not always imply maximizing each individual revenue stream. Indeed, by sacrificing some potential revenue in ticket sales, football clubs build up their brand and reach, which is far more likely to be the dominant and most stable generator of revenue in the long term. As football club owners have a strong incentive to keep their on-field product affordable for people from a wide range of socioeconomic backgrounds to see and enjoy, the affordability of English football is likely to continue, meaning both owners and fans will reap the benefits.