Wednesday, 9 March 2016

Premier League thinking cap

Today's big news in the world of football.

"Does this go far enough?" asks BBC Sport, of the news that price caps are to be trialled in the Premier League.  My initial reaction was that actually, it goes rather too far.

It may be a controversial view amongst football fans, but I have long been of the opinion that football clubs, as privately-run organisations, should have the right to charge what they like for the services or commodities they offer (including tickets to matches) – and that what is a "fair" price for tickets is determined by what people are prepared to pay to go to a game.  I have vocally defended the rights of clubs to raise their ticket prices, on various football discussion forums – normally in the face of near unanimous opposition from fans whose view of the matter is romanticised, rather than rationalised – and told people that if they think the cost of tickets is too high, the answer is to stop buying them.  This, after all, is how markets work; prices are set by what people are willing to pay for whatever is on offer.

But the more I think about the matter, the more I question my steadfast defence of the laws of supply-and-demand, in regards to ticket sales in football.  I am instinctively pro-free markets, and against intervention and price control, I make no bones about that.  But how "free" really is the "market" for football tickets?

After all, can the laws of supply-and-demand be said to apply equally to football, when the attitudes of "consumers" are so fundamentally different from in other areas?  In light of today's news about price caps on away tickets, I have been giving the issue some considerable thought; I don't claim to have any conclusive answers about the economics of football, not by a long way, but I am going to set out a few of my thoughts on the topic here, and invite comments – to my mind, this is a fascinating discussion, which we (as football supporters) should be talking about more openly.

So, let us first consider a "standard" model for a "free" market.  The same products or services are offered by multiple providers, and this creates competition in the market – different companies producing, say, washing powder are competing with each other for the same customers, and this encourages each company to produce better quality washing powder at a lower cost, in the hope of attracting consumers to purchase their products over the rivals' similar offerings.

In this way, what washing powder is "worth" is set by the people buying it, not by the people selling it – if the majority of consumers decide they won't pay Company A's higher prices, because they don't think it offers any real benefits over the cheaper washing powder offered by Company B, Company A will be forced to lower their prices (or prove that their product is worth the extra money) due to a lack of sales as consumers choose Company B instead, believing their product to be better value.

Now, contrast this with the "market" for football clubs.  At first glance, it is similar to the washing powder scenario; there are many football clubs, all around the country, all offering the opportunity for consumers to pay to watch football – some offering higher quality, some offer lower quality, some have high prices, some have lower prices, etc.

But this is a false equivalency.  It assumes that "consumers" of football are simply paying to watch football, and that they don't much care who is playing – just as consumers of washing powder probably aren't too bothered by which logo is on the box, as long as their laundry is clean and fresh.  No, unlike washing powder users, for football supporters the "brand" (ie. which team is playing) is all important; a lifelong Spurs fan (for example) isn't suddenly going to go and watch Leyton Orient play instead because the tickets are a bit cheaper – for him the important thing isn't simply watching football, it is watching Spurs.  And there isn't another Tottenham Hotspur Football Club just down the road, offering consumers the chance to watch the same team play for slightly less money.  In other words, the football "market" has an illusion of "competition" – but in reality, each club actually has a monopoly over its own "brand".

Brand loyalty exists in many areas of the market.  But nowhere is it so visceral as when it comes to supporting a particular football club.  The feelings many football fans have for their club go well beyond simple loyalty to a certain "brand" – the idea of football supporters as consumers who are willing to switch supplier to save money is ludicrous.  As such, it is difficult to apply the laws of supply-and-demand to the football "market" in exactly the same way as other areas.

Of course, "consumers" still have a choice.  But that choice is a binary one – either go to the game, or don't go.  No one is being forced to pay for something they feel is not worth the asking price, and there is an argument to be made that "consumer power" (ie. not buying tickets deemed to be "overpriced", and thus sending a club a message about pricing structures through the medium of lost ticket revenue) is still a better way of tackling the issue than imposing price controls.  But football blurs the boundaries of the way people make decisions; there is a huge cultural element to football, and those of us who wish to approach this discussion with cerebral objectivity would be foolish to ignore that.

I imagine (with no data to hand) that a not insignificant proportion of football fans would still prioritise going to matches over what might rationally be considered more "essential" expenses, if it came to that choice.  That is how serious the game – and perhaps more pertinently, the club – is to many people.  A central tenet of support for free markets must surely be a belief that people are able to make their own decisions, and a commitment to allowing them to do so; is it not therefore necessary to at least attempt to understand how they make those decisions?

The "value" of football to many people is more than simply a monetary value.  Much as my natural response might be not to interfere, and to allow the free market to take its course, I am forced to accept that the nature of football, and it's importance to many people, means the market choices may not truly be "free".

That is not to say that I am wholeheartedly endorsing the price cap on away tickets in the Premier League – I think there could be complications that arise from this, and that it could end up creating as many problems as it solves – but even if it goes against my instincts, more in-depth thought on the matter has meant I have had to concede that there is at the very least a decent case for giving it a try.  It will be very interesting to monitor the situation over the next few seasons, as the price cap is trialled, and then reevaluate things.

No comments:

Post a Comment

Feel free to leave a comment - give your feedback, answer a question, start a debate, make a point, or simply hurl abuse... It's up to you! ;)