Should The Premier League Regulate Ticket Prices?

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I got into a short but interesting debate with someone yesterday as to whether the Premier League should regulate ticket prices.

Firstly, it would appear churlish not to mention the game last night for it was another excellent team performance.

It does seem possible that Steve Bruce has stumbled upon his best 11, bar Jelavic and possibly Diame, along with certifying that 3-5-2 is the best formation for Hull City.  I was particularly impressed with Chester, for whom I heard it was his 200th game – already?!  That might include previous clubs though.  And Brady, both this game and last, has put in some fantastic crosses.  In the games that he has played this calendar year, Brady really seems to have come on as a player – I recall just how many vital blocks he put in against Man City, for example.

It isn’t just his crossing which is becoming exemplary, but also his defending.  Still improvements to be made but he really has developed into a fine player.  And he takes a better corner than Huddlestone, whom I would rather have on the edge of the box at a corner situation – and hasn’t Huddlestone looked sharper and more positive in the last couple of games too?

In fact all of the team have looked much more up for it, ooh, ever since Steve Bruce publicly reminded them of their contracted relegation pay cuts.  I shouldn’t be so cynical.  Unless talking about the Allams, of course.

There hasn’t been much joy for Hull City fans recently, but both victories have really put a smile on my face.  Occasionally I say that I don’t care if we get relegated, but clearly I do.

It was good to see Liverpool fans taking a stand yesterday against extortionate ticket prices..  If the fans of Arsenal, Burnley and Manchester United are reading and would like to reduce their away following, please do follow this fine example.

So 313 words later, I will get onto the subject properly.  Should the Premier League regulate ticket prices?

I am a free-market capitalist and the base rule of capitalist economics is that of the equilibrium of supply and demand.  Simply put, a product/service in a free market has a value at which the most profit can be made, and it should generally be sold at said value.

As such, I inherently support the independence of businesses, and football clubs, to set the market rate.

However, economics is not as simple as that.  It never is, no matter what Gordon Brown may have proclaimed about abolishing boom and bust.  Dickhead.  There are many occasions where we legislate against the free market, for example in cases of network effects, cartels or monopolies, natural or otherwise.  Market failures.

The first question I would like to address is that of whether it is a monopoly.  There is after all, only one Hull City AFC.  There are famous cases of governments legislating against monopoly powers that abuse their position, such as the case against Microsoft when it was judged to be illegally bundling in Microsoft Internet Explorer into Windows and therefore tilting the free-market against its competitors in an unfair manner.

However Hull City AFC does not have the monopoly on sport in Hull.  You can go watch a variety of sports.  Nor does it even have a monopoly on football with the amount of local non-league teams around, or the availability of cars and mass public transport to be able to go see other football clubs.

We choose to support Hull City.  We have to accept that the product we pay for as Hull City fans has vastly increased in quality since we were on the terraces at Boothferry Park.

Next, there are no network effects, like there are for example with gas pipelines, where it is generally uneconomic to have competing gas pipelines on the same route.  There can be as many football clubs as the market can supply.

There is no cartel like OPEC illegally keeping up prices.  Again there is so much competition for sporting and leisure pursuits that a cartel would be next to impossible.

I am not going to review every possible market failure individually as I cannot see that there is such an incident, and I believe that the market is behaving efficiently.

By the common definitions of market failure, supply and demand is working.  Attendances remain high despite increased prices.  Prices could rise further, perhaps much further, before total match day takings reduce.

The consumer is sovereign.  We do not need to pay the prices charged.  We choose to pay for a football ticket.  Nobody forces us to.  It isn’t something like electricity that is necessary to consume.

However there is an under-studied area of economics, one which I think would be fascinating to work on, particularly within a sporting context, which is that of behavioural economics.  Much economic theory dates back to the 19th or early 20th Century such as Joseph Schumpeter or Jon Maynard Keynes – you can go back even to the 18th Century with the fundamental work of Adam Smith.

Behavioural economics has become rather trend-setting to study recently, much of the theory being produced in recent decades (albeit Thorstein Veblen’s theory of conspicuous consumption, for example, came much earlier), and one has to question whether the emotional tie-in that one has with a football club is a form of monopolistic market failure.

I think it is an interesting idea – for those who no longer feel that they can afford to go watch Hull City, it is not such a simple choice of, oh well I cannot afford venison any more, I will buy chicken instead.  There is a strong emotional connection that you do not get with most purchasing decisions.

That way I can see why people would argue for some form of legislation, however I really do not believe that you can, or should attempt to legislate for the behavioural patterns of individuals, especially as there is no specificity in emotional connection.

Ticket prices should come down but until fans start to act on a unified basis across the country, nothing will change – nor should it, on an economic point of view.  A reduction in ticket prices needs to come from lower demand.

Personally I would like to see a campaign organised, perhaps by the FSF.  My suggestion would be for fans of each club to decide on one game per season to boycott – perhaps the most expensive away game – or maybe have one particular day where all fans across all Premier League clubs boycott any games with ticket prices, say over £30.  The second option would probably get the most media attention – the first option would need a more concerted campaign.

It seems Liverpool fans have got the ball rolling, and I have to congratulate them in doing so.  Their team performed unremarkably but their fans did so commendably.

I would be interested to read the views of others.

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