Pricing in Football: Summary Part 1

What is the best value for money way to support a football team? How can football clubs make the game more affordable? With first class football stadiums currently closed in England what is the best value for money offering when watching from the comfort of your own home? Can “free” work in football? All these questions and more were tackled in ‘Pricing in Football’ so if you didn’t get chance to read each article then do check out this summary being released in two parts.

Matchday Ticket Price V. Season Ticket Price

Many clubs are hoping fans will soon be let back in on mass but with Covid-19 rates rising this might be more of a challenge than many imagined. Once fans are allowed back in clubs can of course go back to selling matchday tickets. With two distinct ways to sell tickets; season ticket and matchday ticket an investigation into the pricing points should see if customers/fans are getting value for money and how the two pricing models in normal times can support each other.

Examining season tickets the first thing to do is briefly define this pricing option. Essentially a season ticket involves a customer/fan paying the full price for all games of the season upfront. Sometimes this will include some cup games and sometimes it will only include the league games. Season tickets can be charged at different prices depending on where the seat is in the ground with the best views attracting higher prices. Some clubs however will just offer one single price regardless of location within the stadium.

For season tickets, to examine the value for money a price per match is required, Football League side Portsmouth FC are a great example, for the 2019/20 season they had over 14,000 season ticket holders. The Full Price was ￡439.00 for a season ticket now if we average this price out to ￡439.00 and use the 14,000 season ticket holders as a benchmark, we can estimate a season ticket revenue of ￡6,146,000. Now of course this is a very rough calculation based on multiple assumptions, but it does provide us an estimation of the revenue they secured through this pricing model.

The other option in normal times is of course to sell a matchday ticket either on the day or before the match. This ticket will only be for one match and may attract the more casual fan with loyal fans more likely to invest in a season ticket. This sale can take place either online or in person giving the football club a couple of sales channels to exploit.

Revisiting our Portsmouth FC example, they charged ￡26.00 for an adult ticket if purchased on matchday. Having presented both ticketing pricing models using Portsmouth FC as an example we can now compare the value. We have ￡439.00 for 23 league games so ￡19.09 per match ticket against an on the day matchday price of ￡26.00 per match. This is a saving of ￡6.91 per match which is a significant discount of approximately 26.60%.

The pricing differentials are therefore similar but clearly value is to be had in exploiting the early bird offer, particular with the season ticket offering where the pricing increase levied, after this early bird discount ends, being very substantial indeed at ￡50.00! Clearly season ticket pricing is competitive and when supplemented with an early bird discount is the best value option.

Season Ticket Instalment Pricing

Pricing a season ticket in instalments is becoming increasingly popular with multiple football clubs up and down the country now offering this option to their fans across all levels of the game. Southampton FC in the Premier League offer a model whereby the fan pays 30% upfront then 35% the next month and 35% the month after. This certainly helps a fan but does mean the full season ticket charge is still fully paid by 30th September. (Southampton FC, 2020). In this way this offering is not the most generous and certainly seems to have revenue management and capital inflow at the heart of its design. Port Vale FC in League Two are offering an even more generous scheme, for Port Vale fans they can pay the total price of their season ticket over five months combined with an Early Bird Discount (Port Vale FC, 2020). This offers a significant discount, similar to Portsmouth FC last season, on the price per game making attending matches far more affordable for fans.

The benefits of pricing a season ticket in instalments is not only do fans anchor their mind to the first payment rather than the total price, meaning the charge is perceived by them to be lower, but that this very perception increases a fans tendency to buy. In addition, pricing a season ticket in instalments creates a steady revenue stream throughout the year rather than potential peaks and troughs in revenue.

In short however a key advantage of pushing fans to pay the full price of their season ticket upfront during uncertain times is cash flow management. The full amount now might be infinitely more important than the quarterly or monthly instalments depending on the exact approach used by the particular football club. At the absolute heart of this matter, it could be a matter of survival for a small football league or non-league side to get the money in as soon as possible.

Pay What You Want

This pricing model is as simple as the title suggests with the buyer determining the price. There are some major advantages to this approach and of course some significant drawbacks of this pricing model, most notably losing all pricing control. In a football context the most obvious conclusion to draw straightaway is that this is unlikely to be a realistic option for English Football League (EFL) and Premier League (PL) clubs. The cost structure of these clubs, with high variable costs especially around player costs, means this model would be very much suboptimal. At the non-league level of the game however this model has been tried by a few football clubs and the example we shall use throughout this article is the Step 7 club Hitchin Town FC from Hertfordshire.

Hitchin Town FC decided back in January 2016 to launch a revolutionary new scheme on a one time only basis to do away with the charges of ￡10.00 per adult and ￡6.00 per concession to offer a “pay what you want” pricing model for their match against Frome Town (The Comet, 2015). The club stated that they launched this scheme to try and support their fundraising at the time for new floodlights. Crucially however, they also claimed this pricing model would help attract more potential fans and could lead to higher overall gate receipts. This is another huge advantage of a “pay what you want” pricing model as you take away any of the “pain” associated with the purchase for the customer or in this case fan. This attracts people for whom this “pain” deters them from making a purchase. In that way this can be a great pricing model to attract new customers, additional market share or in the football context grow your fanbase.

The “pay what you want” model is risky though because people can essentially pay nothing. This becomes especially risky if your costs have a certain level of volatility and you incur variable costs for each additional transaction. In a football example more fans mean a need for more security and this can ratchet costs up. At the higher levels of the game this model simply wouldn’t work as it could be seen as devaluing the offering. Currently, with Covid-19 showing no signs of abating, using this pricing model for any football match would be seen as reckless as it could drive attendances above “safe” levels.

Dynamic/Demand Pricing

Dynamic/demand pricing (referred to as dynamic pricing for the rest of this article for ease) is where a business sets its pricing based upon current market demands. Businesses that engage in dynamic pricing are likely to use complex algorithms to adjust their pricing based on competitors, supply, demand, purchasing patterns and more. (Shpanya. 2014) One of the major benefits of this approach is that pricing can more accurately reflect the “pull” factors within the market so for example, if demand is low pricing can drop to entice buyers and if demand is high pricing can increase to maximise revenues.

One example of this strategy at work within football is the pricing Arsenal FC employ to fill the Emirates Stadium in the hope of creating a good atmosphere, albeit the place is famous for being somewhat of a library… Arsenal FC categorise all their games with A, B or C being used to dictate the price with the very best opponents being classified as A games and the very worst as C games. This of course is based on their perception of demand with a game against fierce rivals Tottenham Hotspur classified as an A game and a match against West Brom Albion being classified as a C game. The pricing then gets even more complicated with 8 segments in the upper tier of which 5 have differing price points based on the perceived quality of the view for fans of the game. There are then a further 4 segments with 2 having differing price points in the lower tier based on the same pitch view methodology. This gives 25 differing price points depending on where you want to sit in the stadium along with who the opponents are.

Back in 2016 Arsenal fans boycotted their FA Cup game against Watford protesting against the pricing structure. Nonetheless their boycott and protest did not work as the pricing structure remained and has actually seen prices grow exponentially.

With increasing revenues, improving attendances, adjusting pricing based on demand and responding to market factors being key drivers of football clubs using this pricing strategy it is clear to see the business sense behind the approach. Nonetheless as the example of Arsenal shows this has not been without a backlash. Dynamic pricing is very profit orientated and for most businesses this would be viewed as a good thing for all stakeholders as only through profit is there survival. For football fans however the business model is so different that this profit focus is viewed with disdain and/or disgust. For most businesses when someone makes a purchase they are seen as a customer but for football this is simply not the case with the status of being a “fan” held so highly by ticket buyers.

Away Day Ticket Pricing

The cost of attending away matches has increased almost every season for at least the last decade and these increases have more often than not, for most clubs, vastly outstripped inflation. Now for home fans; season ticket discounts, early bird discounts and membership discounts has helped curb some of this increase and reduce the “pain” for a fan. Typically, away fans have no access to any of these favourable discounts and therefore bear the brunt of the highest ticket prices. This on top of the fact that they incur higher travel costs and can spend more time travelling to a game than actually watching the game makes the life of an away fan a particularly difficult one!

Anyone who has attended any sort of live football should agree that away fans bring most of the atmosphere. Without away fans there is none of the banter/interaction within the stadium and the whole event can feel lifeless. Away fans are therefore crucial to the overall enjoyment all fans have of the game and yet it is away fans who get hit the hardest due to pricing models which favour the home team supporters with discounts that the away fans cannot access.

With all this in mind the Premier League knew in 2016 that they had to act in order to protect the game. They installed a ￡30.00 cap for all away tickets across the league and then extended this in 2019 for an additional three seasons (Premier League, 2019). Sadly, at the moment of course all games are being played behind closed doors. This pricing cap however has to be applauded by all fans, a league which gets criticism from all sides for many pricing decisions simply got this one right. Once we can return to stadiums long may this cap continue.

There is of course another type of away day which is even more expensive than domestic games and that is European away days. For fans these away days are often under the flood lights against the best sides in Europe and are the most sought-after tickets. With travel likely to be in the hundreds of pounds before even considering the matchday ticket price, fans simply cannot afford to be exploited further when it comes to the ticket price. It was therefore ludicrous to see ticket pricing often spirally up to €100.00 in the 2018/2019 season but thankfully this changed in the 2019/2020 season.

UEFA capped ticket prices for away fans at a maximum of €70.00 in the UEFA Champions League and €45.00 in the UEFA Europa League (UEFA, 2019). In announcing this move, similar to the Premier League, they acknowledged the disproportionate contribution these fans have to the overall atmosphere. They also acknowledged the huge costs involved in travelling to these games so felt a cap was the right thing to do. The cap however seems to be set at too high a level with €70.00 surely still too pricey for an away fan on top of flight costs, accommodation costs etc. UEFA must act once Covid-19 passes and fans are allowed back into grounds to lower this further if they truly want the beautiful game to still be a game for all people.

James Hawkes BSc, MSc