The standard assumption in the sports economics literature is that demand for tickets at top flight clubs in any sport is relatively inelastic, i.e., relatively unaffected by changes in (real) prices. That may apply in normal economic conditions, but we are now in what is probably the worst economic downturn since the 1930s and football cannot escape unscathed – although that does not mean that the most doom-laden predictions will be fulfilled. Some of the effects have been masked by the fact that season tickets were bought last summer before the economic crisis hit home.
The standard assumption in the sports economics literature is that demand for tickets at top flight clubs in any sport is relatively inelastic, i.e., relatively unaffected by changes in (real) prices. That may apply in normal economic conditions, but we are now in what is probably the worst economic downturn since the 1930s and football cannot escape unscathed – although that does not mean that the most doom-laden predictions will be fulfilled. Some of the effects have been masked by the fact that season tickets were bought last summer before the economic crisis hit home. Attendance figures include season ticket holders whether they turn up or not. ‘Walk up’ matchday sales were once not available at top clubs, but Liverpool now regularly put seats on general sale, while Aston Villa – despite their current success – cannot get gates up to last year’s average of 40,000. The prawn sandwich brigade is being hit hard as well. Catering revenue at the Emirates is well below expectations. American company Delaware North paid £15m up front for a 20-year contract only to find that many executive box holders who pay £100,000 a year for the privilege are not willing to shell out another £100 for a pre-match meal. For the first time, the Gunners have put Champions League seats on general sale this season.
Deflation is forecast, but for now many goods and services are still increasing in price. The Virgin Money Football Fans’ Inflation Index showed a 21 per cent rise in match day costs since last season with an estimated outlay of £106.21 per fan each match day, the first time the figure has gone about £100. Train fares have increased above the rate of inflation and are due to go up again in January. The Football Supporters’ Federation reckons that fans are cutting down on their stadium spending with more taking their own food and flasks (never a bad idea at many grounds given the quality of the food and drink on offer). Bolton Wanderers have made a free beer offer to early arrivals at the Reebok, are providing free travel to away grounds and have slashed the price of junior season tickets. Efforts like this can help, but more depends on the general state of the economy. For example, falling mortgage interest rates would help, although so far the cuts in base rate have not helped many house buyers. Probably not much of the fiscal stimulus package will help football.