Dunc
New Member
http://football.guardian.co.uk/Columnists/Column/0,4284,1583058,00.html
Let's get real - the problem is wages
The debate continues on the state of English football. While readers say they're being fleeced, Observer columnist and Crystal Palace chairman Simon Jordan says they're missing the main point
Sunday October 2, 2005
The Observer
Ticket prices are too high, the quality's gone and the game's eaten itself. Is that fair comment, useful criticism and a constructive wake-up call from The Observer, or is it destructive media bullshit? I'm leaning one way more than the other.
Why has none of the blanket press analysis this month pointed out that ticket pricing is actually so low in top-level football that it's economically unrealistic? Why no mention that attendances may have levelled out but remain vastly up on the pre-Premiership era? More people watch Championship matches than watch Serie A. And boring? We've had a one-club-dominated top division on and off for years.
Here's the key accusation: clubs are charging high prices for a laboured product because they're run by greedy, short-sighted morons. OK, there are a few of those in football, but the majority are doing an impossible job well. I keep hearing the phrase 'fans pay the players' wages', but fans need to know gate receipts don't come anywhere near doing that. This whole debate needs to refocus on one thing: salaries and their effect on club budgets. It's an unsustainable business structure - you wouldn't see it anywhere else - but it's a situation clubs created, and one we have to deal with. So in that context, how badly are clubs getting ticket pricing wrong? Three points.
1. Real Madrid is cheaper than Chelsea: £28 for an adult and child compared to £90. Why? The Bernabeu holds 80,000, Stamford Bridge holds 43,000. It's simple maths. If Selhurst Park held 80,000 and I knew I was going to fill it every week I could charge £5 for an adult. But it doesn't: we hold 27,000, and it never fills. Clubs in Germany are much cheaper than clubs here, and they're all going bankrupt. You charge what your business model needs to charge, and if you're Premiership champions, you charge what your product is worth.
2. Compare live football with live theatre. If you pay to watch Palace v Crewe it's £20. To watch us play a top side, it's £30. If you go to the West End and see a non-rated production you'll pay £20, while a big show costs more. And no one complains about paying £30 at the theatre.
3. Fundamentally, who is it that the media are sticking up for here? It's not the loyal, regular fans with season tickets, it's the walk-up fans, the consumers who pick and choose games, those who want to go to the big matches, but wouldn't be seen dead at Crewe. If they think one-off tickets at £30 are too expensive, buy a season ticket. An average Palace season ticket is £300: that's £13 a match. Can't afford the lump sum? So pay for it over nine months.
The most mind-bending of these accusations is greed. For Christ's sake, nobody's making any money here. If I wasn't around at Palace, £10m of financing wouldn't be there any more and they'd be in a huge hole. This club is like most other comparable clubs: a long way from being self-sufficient, and a slave to salaries. The bottom line is this: you can't have fans baying for success, screaming at managers to do their jobs, screaming at chairmen to buy players in this financial context, but not expecting to contribute towards it with regular attendance and reasonable investment.
I suppose you could read all this and say: 'Jordan's saying like it or lump it'. That's not the case. Football can do more, but first this debate needs to acknowledge that the salary problem isn't going away. Dave Whelan at Wigan - who's been in the Premiership five minutes - thinks the magic answer is wage-capping: the way for clubs to become realistically financed, self-sufficient and able to cut ticket prices. He's living in happy land. If a Europe-wide wage cap was installed - and it'd take years as you have to honour existing contracts - how many plcs would respond by putting the savings in the pockets of their consumers, and how many would sit back and post profits or pay off debt? To get cheaper tickets, a cap would have to come hand in hand with independent regulation on ticket prices. And if you do that businesses will scream about restriction of trade. So where do you go from there?
The press ask: 'Why not redistribute TV money instead?' Because its significance has been vastly overblown. Last year in the Premiership Palace received £8m at the start of the season, around £4m for live games and £500k per position - so we were paid £1.5m for finishing third from bottom. Even if we'd been shown four more times on TV, that'd still only be another £1.4m, which would be lovely to have, but wouldn't change a thing. And if you're more radical and look to spread the money to smaller clubs in the Premiership and outside it, what'll they spend that money on? Salaries. It always comes back to salaries. Without massive regulation and a change in company law, it's an unbreakable cycle.
If we can't realistically fix the disease, how do we tackle the symptoms? Matchday prices are pitched correctly: it's in associated costs, rewarding loyalty and value for money that there's still room for progress.
The most obvious step is to ensure the quality, the value of the product. Middlesbrough are worried about their attendances dropping, and the talk is about high prices being to blame. They lost to bloody Sunderland last week - that's where their problem lies. Some of the ideas to help the level of entertainment have merit. End-of-season relegation play-offs couldn't have made last season any more exciting, but aren't a bad idea for the Premiership. And I like the suggestion of four points for an away win, if only because we haven't had one all season. I've even considered giving bigger win bonuses for away games, but I shouldn't bloody have to, should I?
The second way to tackle the symptoms is to find other ways of reducing costs for fans and encouraging loyalty. Charlton have a cheap matchday coach service that goes out into Kent to nick Gillingham fans - that's pretty clever. We might start sending a coach to Brighton. And four years ago we were the first club to introduce the Teamcard loyalty scheme, which rewards season-ticket holders for their support by awarding points for purchases at a range of retailers, redeemable against tickets.
We're also focused on bringing in the next generation. We do kids-for-a-quid family days, and school-book challenges where we send tickets to local schools, they sell them at a discounted price and keep half the money. That's raised tens of thousands for books in the last few years, and brought new fans to Palace. I've also looked at the idea of filling the stadium every week by putting a school kid in every empty seat, for free. The logistics are a nightmare: policing, segregation and predicting your gate in time to distribute tickets, but there's mileage in it - it's on the agenda.
We're also looking at how, when the value for money isn't there - and sometimes it hasn't been at Palace - we can find a mechanism for rebating fans. Similarly, we thought about giving the 5,000 loyal fans who'd watched our first two Carling Cup games cheap tickets for the third against Liverpool, but a league covenant says you can't sell home tickets cheaper than away tickets. Although, frankly, lets turn the problem round: we might not have to charge £30 for the Liverpool game if more than 5,000 people had turned up to the previous two rounds, when the tickets were £15 for adults, £1 for kids.
So what's the way forward? The tone of The Game That Ate Itself is destructive. If you say things are shit long enough, things will be shit. As far as I'm concerned, football is still in the ascendancy and the curves and trends of progress still exist. The standard this season isn't as high as it needs to be, but the English leagues are still the best in the world. Yes, if you were inventing football economics tomorrow, you wouldn't invent the mess we've got now. But it's there, it's our mess, and it's up to all of us to find a way round it.
Football's not blind to the problem - the press, and fans, can't be either.
Let's get real - the problem is wages
The debate continues on the state of English football. While readers say they're being fleeced, Observer columnist and Crystal Palace chairman Simon Jordan says they're missing the main point
Sunday October 2, 2005
The Observer
Ticket prices are too high, the quality's gone and the game's eaten itself. Is that fair comment, useful criticism and a constructive wake-up call from The Observer, or is it destructive media bullshit? I'm leaning one way more than the other.
Why has none of the blanket press analysis this month pointed out that ticket pricing is actually so low in top-level football that it's economically unrealistic? Why no mention that attendances may have levelled out but remain vastly up on the pre-Premiership era? More people watch Championship matches than watch Serie A. And boring? We've had a one-club-dominated top division on and off for years.
Here's the key accusation: clubs are charging high prices for a laboured product because they're run by greedy, short-sighted morons. OK, there are a few of those in football, but the majority are doing an impossible job well. I keep hearing the phrase 'fans pay the players' wages', but fans need to know gate receipts don't come anywhere near doing that. This whole debate needs to refocus on one thing: salaries and their effect on club budgets. It's an unsustainable business structure - you wouldn't see it anywhere else - but it's a situation clubs created, and one we have to deal with. So in that context, how badly are clubs getting ticket pricing wrong? Three points.
1. Real Madrid is cheaper than Chelsea: £28 for an adult and child compared to £90. Why? The Bernabeu holds 80,000, Stamford Bridge holds 43,000. It's simple maths. If Selhurst Park held 80,000 and I knew I was going to fill it every week I could charge £5 for an adult. But it doesn't: we hold 27,000, and it never fills. Clubs in Germany are much cheaper than clubs here, and they're all going bankrupt. You charge what your business model needs to charge, and if you're Premiership champions, you charge what your product is worth.
2. Compare live football with live theatre. If you pay to watch Palace v Crewe it's £20. To watch us play a top side, it's £30. If you go to the West End and see a non-rated production you'll pay £20, while a big show costs more. And no one complains about paying £30 at the theatre.
3. Fundamentally, who is it that the media are sticking up for here? It's not the loyal, regular fans with season tickets, it's the walk-up fans, the consumers who pick and choose games, those who want to go to the big matches, but wouldn't be seen dead at Crewe. If they think one-off tickets at £30 are too expensive, buy a season ticket. An average Palace season ticket is £300: that's £13 a match. Can't afford the lump sum? So pay for it over nine months.
The most mind-bending of these accusations is greed. For Christ's sake, nobody's making any money here. If I wasn't around at Palace, £10m of financing wouldn't be there any more and they'd be in a huge hole. This club is like most other comparable clubs: a long way from being self-sufficient, and a slave to salaries. The bottom line is this: you can't have fans baying for success, screaming at managers to do their jobs, screaming at chairmen to buy players in this financial context, but not expecting to contribute towards it with regular attendance and reasonable investment.
I suppose you could read all this and say: 'Jordan's saying like it or lump it'. That's not the case. Football can do more, but first this debate needs to acknowledge that the salary problem isn't going away. Dave Whelan at Wigan - who's been in the Premiership five minutes - thinks the magic answer is wage-capping: the way for clubs to become realistically financed, self-sufficient and able to cut ticket prices. He's living in happy land. If a Europe-wide wage cap was installed - and it'd take years as you have to honour existing contracts - how many plcs would respond by putting the savings in the pockets of their consumers, and how many would sit back and post profits or pay off debt? To get cheaper tickets, a cap would have to come hand in hand with independent regulation on ticket prices. And if you do that businesses will scream about restriction of trade. So where do you go from there?
The press ask: 'Why not redistribute TV money instead?' Because its significance has been vastly overblown. Last year in the Premiership Palace received £8m at the start of the season, around £4m for live games and £500k per position - so we were paid £1.5m for finishing third from bottom. Even if we'd been shown four more times on TV, that'd still only be another £1.4m, which would be lovely to have, but wouldn't change a thing. And if you're more radical and look to spread the money to smaller clubs in the Premiership and outside it, what'll they spend that money on? Salaries. It always comes back to salaries. Without massive regulation and a change in company law, it's an unbreakable cycle.
If we can't realistically fix the disease, how do we tackle the symptoms? Matchday prices are pitched correctly: it's in associated costs, rewarding loyalty and value for money that there's still room for progress.
The most obvious step is to ensure the quality, the value of the product. Middlesbrough are worried about their attendances dropping, and the talk is about high prices being to blame. They lost to bloody Sunderland last week - that's where their problem lies. Some of the ideas to help the level of entertainment have merit. End-of-season relegation play-offs couldn't have made last season any more exciting, but aren't a bad idea for the Premiership. And I like the suggestion of four points for an away win, if only because we haven't had one all season. I've even considered giving bigger win bonuses for away games, but I shouldn't bloody have to, should I?
The second way to tackle the symptoms is to find other ways of reducing costs for fans and encouraging loyalty. Charlton have a cheap matchday coach service that goes out into Kent to nick Gillingham fans - that's pretty clever. We might start sending a coach to Brighton. And four years ago we were the first club to introduce the Teamcard loyalty scheme, which rewards season-ticket holders for their support by awarding points for purchases at a range of retailers, redeemable against tickets.
We're also focused on bringing in the next generation. We do kids-for-a-quid family days, and school-book challenges where we send tickets to local schools, they sell them at a discounted price and keep half the money. That's raised tens of thousands for books in the last few years, and brought new fans to Palace. I've also looked at the idea of filling the stadium every week by putting a school kid in every empty seat, for free. The logistics are a nightmare: policing, segregation and predicting your gate in time to distribute tickets, but there's mileage in it - it's on the agenda.
We're also looking at how, when the value for money isn't there - and sometimes it hasn't been at Palace - we can find a mechanism for rebating fans. Similarly, we thought about giving the 5,000 loyal fans who'd watched our first two Carling Cup games cheap tickets for the third against Liverpool, but a league covenant says you can't sell home tickets cheaper than away tickets. Although, frankly, lets turn the problem round: we might not have to charge £30 for the Liverpool game if more than 5,000 people had turned up to the previous two rounds, when the tickets were £15 for adults, £1 for kids.
So what's the way forward? The tone of The Game That Ate Itself is destructive. If you say things are shit long enough, things will be shit. As far as I'm concerned, football is still in the ascendancy and the curves and trends of progress still exist. The standard this season isn't as high as it needs to be, but the English leagues are still the best in the world. Yes, if you were inventing football economics tomorrow, you wouldn't invent the mess we've got now. But it's there, it's our mess, and it's up to all of us to find a way round it.
Football's not blind to the problem - the press, and fans, can't be either.
