Football prices

Tomorrow (Thursday 14th August) the Football Supporters' Federation, together with fans from many football clubs, is holding a demonstration in London demanding "Affordable Football for All".  Meeting at 1pm at Marble Arch, they will be marching on the headquarters of the Premier League and Football League. Full details are available at FSF March.

As a season ticket holder at White Hart Lane the emotional side of my brain wishes the FSF well and approves of their objective wholeheartedly. My season ticket for 2014–2015 costs around £900 and is one of the cheaper seats at Spurs. This means an average of around £45 per game. This includes TWO cup games, one of which will be the Europa League playoff game against Limassol on 28th August. When I first became a season ticket holder at Spurs the cost included six cup matches, something which has become reduced over a period of two decades. £45 per game is quite expensive, especially as it is not the only cost of attending football: there is also transportation, refreshments, possibly a matchday programme, and for some a few drinks before, after or both. Then there is merchandise: almost all fans at some point during the season will purchase official merchandise to show their loyalty. And there is also the associated cost of satellite TV, be it SKY, Virgin or BT. One might claim that supporting your football team is an addiction. An expensive addiction!

Supporting your football team in the English Premier League is not cheap. But when I consider it from my perspective as a professional economist I come up with a different conclusion, one which the FSF will not like.

As a Spurs' supporter I notice that for most games there are very few empty seats in the ground. Even when the weather is worse than inclement, even when the match is being broadcast live on TV, even when the team is not playing as well as we supporters might hope. I also note that there is a significant waiting list for season tickets. By way of example, my 16 year old son has been a Member for more than a decade and recently made it to the top of the waiting list for a Youth season ticket, which we naturally jumped at (it's about a third of the price of my own season ticker). Members can find out where they are on the waiting list by going to their Spurs online account. I understand that the current waiting list is in the tens of thousands, which Spurs hope the new stadium will be able to accommodate. My understanding is that the same is largely true of most other EPL clubs, even Manchester United, whose stadium has a whopping capacity of around 70,000.

All of this is evidence of demand to attend matches in excess of the supply. As anyone with a basic understanding of economics will tell you, excess demand usually leads to price rises. As long as there is no demand shortage there is no economic case for football clubs, including Spurs, to reduce prices. However, I feel sure that the FSF will argue there is a moral case. So let's conduct a brief thought experiment to see what would happen if EPL clubs reduced their prices significantly:

Again, as anyone with a basic understanding of economics knows, if the price of season tickets (or per game) was reduced it would lead to movement down the demand curve. The quantity demanded would increase, possibly significantly. This would mean that even more supporters would find themselves unable to attend: more would wish to attend at a lower price, yet the capacity remains unchanged. Lowering price below its equilibrium always leads to a shortage. This would make football supporters in general much more hostile than they are currently, as there would be more of them dissatisfied. One of the possible repercussions of this would be to generate an even larger "black market" for tickets than currently exists.

The FSF has also argued that increased TV money could be used to reduce prices, but this would do nothing to eliminate the issue which I have outlined above. The amount of TV money is largely an irrelevance in setting season ticket or matchday prices. It is a hoary old argument that was dismissed in economics over a hundred years ago with Alfred Marshall's positing of both supply and demand as determining price (not simply the former, based on costs).

I am delighted that the FSF is bringing the attention of football pricing to the EPL and FL. It is something they need to note, as current conditions will not always be the case. However, I doubt very much that they will be successful, as it is not possible to beat the market: it always comes back to bite you where it hurts most.