Tuesday, 22 February 2011

“Unbelievable and disappointing”

To much anger and dismay across football, UEFA announced last week the ticket prices for this year’s Champions League final at Wembley. Prices for “neutral” seats range from £176 to £326 each including the laughable £26 booking fee. So called “Category 4” tickets at £80 will be distributed to the two clubs who get through to the final.


Whilst the FA (who of course own Wembley) rushed to distance themselves from a decision they were party to, Sir Alex Ferguson shrugged off the years to put his Govan shop stewards coat back on. Fergie told the press:

“It’s unbelievable and disappointing. It’s a killer and a corporate deal, that. Managers and players can’t do anything about it. I don’t know what you can do. You have a booking fee also of £26 or whatever it is, so dearie me.”

United legend and MUTV presenter Paddy Crerand was also underwhelmed:

“Is football leaving working class fans behind these days? How can UEFA justify the European Cup ticket prices?”

I agree with Fergie and Paddy, but of course their employers have hardly led the way in keeping football affordable. The graph below shows the cost of a season ticket in Tier 2 of the Stretford End at Old Trafford from when it opened in 2000/01 to now. The graph slopes upwards until this season’s ticket price freeze, but the rate of increase in the first four years (under the plc) is radically different to what happened after the Glazers took control.



The average rate of increase from 2000/01 to 2004/05 is 4.3%, but from 2004/05 to 2010/11 it’s 8.1% (9.9% pa until this season's price freeze). The Glazers are very proud of their price increases, calling them one of the “Key Wins under the Glazer Reign” in their 2006 Investment Memorandum.


United report their second quarter results this Friday and will show another quarter of profits and a large cash balance. So perhaps Paddy and Fergie should take their concerns about supporters to David Gill and suggest using some of that money to reduce prices next year. With the economy so weak and inflation eroding real incomes, United could easily afford a 10% across the board price cut to help supporters. Now that would be "unbelievable".

LUHG

24 comments:

The Big O said...

On top of that there's the increase in processing charge on the Ticket Exchange. Not necessarily United's fault directly, but by contesting that market, viagogo then winning, viagogo then need to do whatever they can to recoup the rents handed over to United. One reason (there are others I am sure) why it's not a gurantee anymore that you won't sell tickets for matches you won't attend on the Ticket Exchange anymore.

CS said...

I always enjoy reading your Tweets and blog!

If the powers that be at United decided to implement your suggestion, how much loss in revenue would that be in a year? Where do you think that the organization could recoup the loss? After all, we all know that the Glazers are not in this business out of the kindness of their hearts. ;-)

andersred said...

It would only cost £10m per annum to fund a 10% ticket price cut. The club had £150m in the bank at the end of September 2010 and as SAF says, there's "no value" in the transfer market.

anders

JohnnyMango said...

£10M? So a Bebe and an Obertan.

andersred said...

Yes JohnnyMango, a bargain...

ja said...

Full price and obligatory purchase thanks to ACS for a cup game between United reserves and a non league team and no protest from Ferguson sums it up. Shop stewards coat? Fergie stopped wearing those when he started driving Mercedes.

Anonymous said...

Hi Ander,
1. Do you agree that Manchester United is a business now?
2. As a business man, if you could sell ALL your products with 10$ price, will you sell it at 9$ price?

Thanks,
Trung

Darren said...

Manchester United is not a business, it's a Football Club. Or at least it used to be. The match is not a product, and supporters are not customers.

What the Glazers have done is erode the foundations of our support. Many of those who would stick around during lean times have been priced out or disenfranchised. And they wont be coming back, even if the Glazers were to reduce prices (as the Glazers are similarly finding out with the Bucs).

Now even if you don't 'get' football, even if you really do think that football is a business first and a sport second, you must admit that getting rid of your core 'customers' will be bad for business in the long term.

Dicko said...

Don't worry - when the consequences of deliberately catastrophic monetary policy, burning oil fields, unserviceable Ponzi-style sovereign debt and mass unemployment ensure next year, the penny might finally drop for these weasels - when no one can afford to drive to the match / buy a ticket - unless we start paying in Troy oz or conch shells....

Just as well because probably only economic catastrophe and civil upheaval can persuade these parasites to slither away and we can all get back to just enjoying the game - das Ding an sich.

Anonymous said...

Anders, you never miss an opportunity to try and bash the Glazers!

Whilst it would be nice for the season ticket prices to go down, especially in these austere times, the Glazer's will only only reduce them if market forces dictate. They are hardly involved in United for charitable reasons are they?!

Instead of focusing anger on the the Glazers, perhaps it would be better to compare United's season ticket prices with other leading Premiership sides like Chelsea, Arsenal etc, and see whether United's prices are at, below, or above the market rate. I'm sure this has been covered as well, but it would be useful to see the comparison.

Denzil

Ps. Looking forward to more Glazer bashing this Friday!

Anonymous said...

@Denzil. The price of other clubs' season tickets are ONLY relevant if you plan to buy one. With your Arsenal season ticket you only get to see United once. It's a totally riciculous argument.

Si, East Manchester said...

Denzil,

Using other clubs ticket prices to compare to the cost of Utd's is an irrelevance. Chelsea & Arsenal have charged outrageous prices for many years and Utd's are now heading up to the same level. There are no winners here. As Anders pointed out via the graph, look at how steep that line has risen since 2005 yet the club are apparently making more money than ever in commercial deals.

I often wonder how anyone under working age could afford to attend Utd now 4 times a month like i used to unless their parents are well off. I was taken to OT by my sister as a kid in the 70's and that's how i started supporting them. For most folk, this is no longer an option as it's out of their price range especially the local supporters like i was. As someone else mentioned on here, the club have excluded their core support and opened it up to the highest bidders. I left in 2005 and won't be back while seats are £40 a go. Now i have two young daughters who will be accompanying me to FC United when they are a bit older. I won't pay three figure sums to take my family to watch football. Another long serving patron of OT lost and potentially two future patrons as well who are from the city. I'm sure i'm one of many but the current owners don't care.

andersred said...

There are two ways of looking at the finances of football; either purely as a business (in which case let the market rip), or as a hybrid of business and sport (see Fergie and Paddy's comments). If you're in the former camp I have no idea why you read this blog. For those in the latter camp, there are choices about access and openness vs. profit, and too many of those come down on the wrong side these days in my opinion....

anders

Anonymous said...

Welcome to the world of the Premier League!

Has it taken you that long to realise that the Premier League is all about money? Where clubs would rather finish in the top 4 than win a trophy like the FA Cup, where £50m is spent on one player, where weekly wages for average players like O'Shea (as an example, I have no personal issue with him) are treble the average annual wage in England.

If United have to pay O'Shea 80k per week, then this has to be paid for, through increased ticket prices, more commercial deals etc. If they don't charge the market rate then they will lose ground on other clubs.

All these constant snipings on Gill and the Glazers is pointless. You should be focusing your attentions on the Premier League, the Government, UEFA, FIFA etc etc.

By the way, well done on supporting FC United. It is a shame that a lot more people don't turn their backs on the Premier League all together. Only then will people listen and things might change.

Denzil.

Si, East Manchester said...

Denzil,

I realised the Premier League was taking football away from people like me about 11-12 years ago. I hung on by my fingertips for another 5 years mainly out of blind loyalty but the Glazers rolling up was the end of the line. It was obvious to me what their intentions were from the start and so far they haven't proved me wrong. Acquiring a club they never had the money to buy in the first place only meant one thing for the fans and that was to milk them dry at a level not previously seen before at OT. Your point about the Premier League & Government doing something to avoid Glazer situations is partially correct of course but ultimately i think the fans could still have a big influence in changing things at OT. Unfortunately there's too many who are ambivalent about the situation and they only care about the next trophy. So be it. In essence there's not enough Andersreds i suppose.

If anyone thinks that a Glazer type of owner is in any way good for Utd or football in general they might as well believe in fairies. There's a good number of fans who go to OT now that have replaced people like me since 2005 that will walk in a heartbeat if the success dries up on the pitch. Lack of success at OT would never have seen me walk away.

Personally i think we're too far down the road with all this for anything to change now. The only positive for me is getting involved in starting up a brand new club with it's rules set in stone to avoid any of this nonsense. Unthinkable for me prior to 2005 but other than becoming an armchair supporter or watching another lower league club i have no connection with (that i can afford to get in at) it seems the best move i could have done. I think that's enough said on this topic.

Patrick said...

Hello andersred, im a long time reader first time poster

You mentioned

"The club had £150m in the bank at the end of September 2010 and as SAF says, there's "no value" in the transfer market."

Do you think that's money there for the interest or transfers. What are your thoughts on that money please

Anonymous said...

Football clubs are going the way of the NFL in America. Clubs already make a majority of the income from the TV rights (just as in the US) and I do not see it changing anytime soon.
The rising prices have not stopped people from attending NFL games (although there are less off them in a season I still have friends who pay 3,000 -4,000 USD for their tickets).
Its not just about going to the game and the passion you feel for the team...the matches turn into "events" and "entertainment"

escalante blogger said...

That's today's issue.

CS said...

Cheers for the reply!

I just read a discussion on the MUFC Supporters forum about increasing the capacity of OT. Do you think that executive management would/could cut some ticket prices if it added 10,000-20,000 more seats?

Stojan Yugoslavia said...

What kind of financial gains we can expect from tomorrows report? Commercial revenues rise, EBIDTA, and what about wages and debt?

TomC said...

Clearly dropping ticket prices would be a popular short-term gesture, and affordable access for local fans should be a key long-term goal for any responsible owners. But is there any reason to think that spending money that way right now would be in the best interests of the club? (The whole institution, I mean, not just the business.)

The stadium still seems to be filling up reliably, so prices aren't counter-productively high. Is there evidence of an aging, shrinking or less passionate local fanbase?

If not, then surely the greatest threat to club-as-institution is the mountain of debt that's been landed on it. One of your earlier pieces suggests that the club is earning all of 1.1% on its cash pile - surely that money should be spent to pay down the bond debt, and new loans taken out for signings when necessary?

(Apologies if you've covered this already. I haven't read through all of this really excellent site yet.)

Anonymous said...

@TomC. They bought back 24m worth of bonds this quarter so this could be part a wider move to use the cash more effectively.

Anonymous said...

Andy, interesting how the Exec prices at OT went down last year!

fattmatt said...

My jaundice observation is that the local fan base is not now highly valued as before. If more local fans stop attending then the business side will look to the national fan base and bus in more fans at cost to fill the seats at the price local fans will not pay. Who cares if a local supporter cannot afford to take their children to a game, they will just find a supporter down south with the money to buy that ticket. Major British clubs are just going through the motions with their involvement in the local community when they know they can always change tack in how to sell tickets. Tottenham is the last best example in ignoring the local community in wanting to move location rather than expand the current stadium.