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[Blog] Reducing Ticket Prices Is An Expensive Business
Written by Upbeat~ on Friday, 13th May 2011 14:52

Reducing ticket prices, there’s an obvious argument in favour of this and one that generally receives unanimous support from fans. Lower prices equals more bums on seats, which in turn equals better atmosphere.

I've been calling for a proper examination by the club into the possibility of lowering ticket prices for a couple of seasons now (admittedly my cries have yet to be heard outside of friends and TWTD) and had originally hoped that the discounted tickets offered at Cardiff and Palace were examples of the club assessing the fluctuations in gate receipts that came with lowering the price.

However, these 'experiments' have evidently so far not altered the club's stance on lowering ticket prices. It's a shame and the attendances will continue to suffer as a result.

The undeniable problem with the proposal of lower prices, however, is that it in all probability does not make sense financially. As accountants, I'm sure fellow TWTD posters Fatboy and CambridgeBlue will grudgingly agree that in all likelihood gate receipts would suffer if the prices were lowered significantly. Factors that would need to be considered include:

1) The additional sales (food, drink, etc) that would result from an increase in attendance.

2) The estimated increase in attendance that would result from a significant lowering of the price.

I’d like to immediately address the argument that lowering ticket prices would increase additional sales and therefore help to minimise any possible loss of revenues. For me this isn’t a valid assumption, as it undermines the initial premise that money is a determinant factor in why a proportion of our fan base is not attending games.

There is no stopping someone from bringing their own food/treats/cap-less drinks into the stadium after all, so whether someone can afford a pork pie at the match on top of the ticket price really shouldn’t be a factor.

Undoubtedly food sales would improve in the event of a reduction in ticket prices, even if solely due to the additional change rustling around in regulars’ pockets. However, we’d probably be talking £1,000s here, not £10,000s and certainly not £100,000s. Compared to gate receipts, additional sales are a drop in the ocean.

A critical concern with the football business model is that demand is relatively inelastic. By this I mean that a decrease in the price of a ticket will not unfortunately result in a significant (enough) increase in sales. Reasons? Football is governed by the heart, with many people already paying a price that they probably cannot truly justify cost-wise.

Therefore, a reduction in ticket prices will not affect the number of potential buyers to the same extent as if ITFC were a 'normal business', as many consumers (that would normally be affected by a drop in prices) are paying the current prices anyway for their love of the game. The majority of us are accepting the exorbitant prices as it stands - this is a clear and unsolvable 'problem'.

Part 1: Estimating current average gate receipts The numbers below were not plucked purely at random, but attained through a rough analysis of season ticket pricing available across the stadium, knowledge of which seats in the stadium tend to be bought at football matches and also numerical figures provided by CaughtInTheBrambles in his blog.

a) I am suggesting 12,500 (estimate, conservative current figure for this season is 12,800+), 12,000 and 11,500 as possible figures for season ticket sales next season

b) I am suggesting £450 and £550 as possible average season ticket prices.

c) This gives £19.56, £23.91 as possible average season ticket prices per match.

d) I am suggesting £23 and £26 as possible average match day ticket prices, taking into account that somewhere between 30-50% of consumers are entitled to concession/child tickets*.

e) I am stating 19,614 as the average official league attendance (over the course of the season, the Norwich City match is unlikely to have significantly affected the overall figure; it should be noted that attendance levels were also negatively affected by the weather, with the Leicester City match seeing only 16,728 supporters – it all evens itself out in the end).

1) High estimate: (11500 x £23.91) + (8141 x £26) = £486,631

2) Medium estimate: (12000 x £22) + (7614 x £24.50) = £450,543*

*this figure will be used later and taken as the most ‘reliable’ indication of average gate receipts

3) Low estimate: (12500 x £19.56) + (7114 x £23) = £408,122

I believe the above three estimates to be a reliable reflection of the true gate receipts collected by ITFC for the average league match currently.

As is apparent from my estimates, I’ve conservatively accounted for possible falls in season ticket sales of between 2.65-10.2%, but do not believe this will equate to a substantial loss in attendance levels.

In reality, I think the majority of people considering opting out of season ticket renewal did so last season, reflected by the loss of 2,000 season tickets. There is also the distinct possibility that performances on the pitch will improve, and therefore I have decided to keep the attendance levels for next season constant.

Part 2: Here comes the tricky part; predicting the attendance changes that most accurately reflect any reduction in ticket price. Three issues must be addressed here:

1) The groups most likely to be affected by a reduction in ticket prices. I assert that it is not just individual adults who would be predominantly affected by a lowering of ticket prices, but supporters from across price bands – families, concessions, adolescents under 20. Therefore I don’t wish to separate fans into specific price groups and examine the extent to which each price band would be affected by a reduction in ticket prices, but concentrate on supporters as a whole – a general average.

2) The matter of season ticket holders. This is again a very difficult decision, as our season ticket prices are considerably higher than other clubs at Championship level. The early bird scheme currently offered goes some way to addressing that, but whether or not season ticket price should also come down is a difficult matter and would have a significant effect on gate receipts. A lowering of individual ticket prices, whilst maintaining the same season ticket prices, would also see a significant fall in season ticket sales, as the money-saving incentive that comes with purchasing a season ticket would be greatly reduced.

3) The annoying reality that a) our maximum capacity is 30,000, and b) a decrease in ticket prices, even to sub-Championship levels, is unlikely to see us achieving anywhere near 30,000 attendance levels. Evidence from the Crystal Palace and Cardiff matches – where £10 tickets were made available for acquaintances of season ticket holders and children were admitted at very low cost respectively – showed that we still only received somewhere in the region of 24,000-25,000.

It could be argued that the offer wasn’t sufficiently publicised for everyone to take advantage of those offers. However, I suggest that any fan interested enough to attend football matches at all regularly would have been aware of this club offer.

It would be far too speculative and unscientific to give a detailed breakdown of the effect that a specific reduction in prices has on attendance levels. However, the following can be put forward:

1) For 19,614 fans, the average price paid by each supporter is approximately £22.97 (£450,453 figure).*

2) For 22,000 fans, the corresponding price would need to be £20.48 in order to maintain gate receipts.

3) For 24,000 fans, £18.77

4) For 26,000 fans, £17.33

5) For 28,000 fans, £16.09

6) For 30,000 fans, we would need a larger catchment area or Premier League status

*This figure may seem very low, especially if you recently forked out £32 for a ticket, but this price includes season ticket holders, children, adolescents and concessions.

Firstly, I’d be both impressed and shocked if a significant reduction in ticket prices led to 6,000 more fans coming through the gates, unless of course performances significantly improved as well.

Secondly, whilst I’m sure many would happily pay £17.33 in order to attend an ITFC match, I’m not overly sure parents would be impressed if they were asked to pay £17.33 for their child to attend the game. ITFC must also remain loyal to its season ticket holders, who would expect a discount for committing to an entire season of home matches.

It is possible to see from the above data that, in order to generate the current gate receipts, a decrease in the cost of every individual ticket by £5.64 would, in turn, need to result in attendance figures increasing by 6,000.

The average, individual, adult ticket price used to achieve the figure £450,453 (see above) was £29. Would an adult unwilling to pay £29 be prepared to pay £23.44? Is this a big enough price deduction?

Of course, ticket prices would most probably decrease on a proportional basis, meaning that an adult would in reality be looking at paying a figure closer to the region of £22.50. Again though, whilst this price reduction could in all likelihood generate attendances in the region of 26,000 on a selected game basis, the club would need to maintain an average attendance of 26,000 throughout the season.

Achieving a peak of 26,000 for a third of the matches and then struggling to reach 22,000 against Barnsley would equate to a loss in gate receipts and subsequently club revenues. Therein lays the problem.

If you honestly believe there are 26,000 committed Ipswich Town supporters prepared to put their bums on seats every home match (or indeed 40,000 supporters prepared to rotate), this is financially viable. Otherwise, matchday ticket prices, alongside season ticket prices, are likely to remain as they are. Now COYB for next season!

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Upbeat~ added 15:13 - May 13
I agree with most of your points, but it's a bit long-winded isn't it?

SitfcB added 15:23 - May 13
And I thought I had to much time on my hands?

Only joking mate! Good blog...Lets hope Cleggy reads it :)

Upbeat~ added 15:26 - May 13
The worrying thing is that I have an exam tomorrow! The things I'll do to avoid revising.

gordon added 15:50 - May 13
Gosh, very good.

If you wish to develop your research further, you might wish to incorporate some dynamic element to your model. See, we might expect that as the stadium becomes closer to full, the experience improves for the supporters, and the price they are willing to pay increases. Your comparative statics exercise which treats demand as exogenous misses this factor, which may or may not be significant.

Perhaps there could be multiple equilibria? one with high prices and low attendance (causing low demand), and another where the lower prices trigger higher demand, which increases attendances, which triggers more demand etc etc.

That's not to say I disagree, your assumptions sound far more reasonable than the other chap.

See Nelson and Winter (1982) for more on path dependency, indeed they wouldn't say 'multiple equilibria' at all I dare say, being against that sort of thing.

rosseden added 16:00 - May 13
this is rather interesting, a lot of good points, what id say though, i wouldnt mind betting that the majority of the '£10' purchasers, wouldnt purchase even if a reguler ticket was £20, so what the club are essentially doing is pulling in the 'floating sales' all at once, this is a common retail sales technique.
If you look at the retail analysis, there are three types of buyer, price driven, value driven, loyalty driven, the latter will mainly be season ticket holders, the price conciencious will only come when its a tenner, and the middle ones make up the extra numbers at the other matches. If you put it into retail terms again, in this case lets use foods - Own brand crisps / walkers / sensations or if you look at coffee the 3 would be own brand / nescafe / Illy.

We essentially follow that model, we have something that people will travel for thats cheap ie a tenner, move that to £11 and watch the sales drop, you might think im joking, but they would, we have the loyalty one covered with season tickets and we hope the rest fall into the middle.

Regarding other revenue generated inside the ground, we outsource it all so get very little return, unfortunately.......

naa added 16:07 - May 13
At the end of the day the amount people are willing to pay goes up depending on the fare on offer. Last season under Keane I should have been paid to attend each game. Under Jewell the value went up.

If we do well next year - which I have real hope we will - then the crowd will rise regardless of cost, and that is what the board are hoping for, but they can't guarantee that and they are, ultimately, running a business. If we're rubbish we'll struggle to get crowds in regardless of cost.

The blog's points are good though, to increase attendance the price drop would need to be significant - people don't care about a couple of quid here and there - but likewise that would have to result in a significant increase in attendance, which I personally don't think will happen.

In this division I think we can expect no more than 24000 as an average gate, and that's being generous.

Of course, we shouldn't forget that Mr Keane was essentially responsible for a 3000 reduction in the average gate. If only we could take that out of his wages...

CambridgeBlue added 16:18 - May 13
Really excellent blog, that. Sadly I've been out for a bit of a long lunch so not really capable of responding overly coherently.

Nice to see that someone has done some mathematical calculations of what the various repercussions may be, and generally speaking I do agree with you.

Think I might knock up a few graphs at some point to see the equilibria Gordon talks about. Depressing as it may be, the club has probably done the same and worked out that where it is is what is necessary to make ends meet. As I've said in other posts on other topics, ME is not a golden goose, and certainly shouldn't be treated as such.

The simple fact is that we're all somewhat aggrieved at paying over the odds for some years for substandard football, and that if the football improved, we'd all be happy to pay just about anything to see it. Sadly that won't be a 4-1 win against Norwich next season, but 4-1 against just about anyone else would do.

gordon added 16:45 - May 13
The idea of path dependence, or multiple equilibria as I called it incorrectly, is that the economic outcome is determined by historical events/decisions. There isn't one equilibrium price at which ITFC maximise profits, but many possible prices at which they could maximise profits. however, this price is constantly evolving as history is created. So, the concept of equilibrium as a static concept is incorrect.

The interesting thing, is that one event can put a business/organisation onto a completely different 'path'. Such that had something in the past happened slightly differently, ITFC attendances/ticket demand/prices could be completely different. But, once an organisation is on a particular 'path', it can be difficult to identify what put you on this path, and possible ways to move onto another path.


CambridgeBlue added 16:54 - May 13
Were you at the same pub as me for lunch? ;-)

Fair point though.. A big home win against a big team can create an influx of people more than happy to pay £30, and a repeat of said performance will only increase the influx. Equally a series of poor performances are equally damaging. Your contradictory point to my shop analogy was absolutely right in that sense.

Trouble is, of course, that we haven't had all that many decent performances against anyone for some time. If Jewell can bring around a bit of a revolution (late season's performances having been better than Keane but not fantastic) and bring in some good players, Town won't be struggling at all for pretty good attendances at top rates.

However, and this is a gamble on their part, if he performs as well as the last couple of managers, they're going to be seriously struggling to fill the stadium for some time.

I'll gladly concede the point that everyone is willing to give Jewell a chance in both the transfer market and the dressing room, and I hope beyond hope that he succeeds.

Your final point I'm not so sure about. While it can be difficult to identify, surely that's what all these people are paid £50k+ (sometimes a lot more) to be able to do? Here's where Clegg's oft-lamented lack of experience in football may come in to play.

On that note, I'm off to the pub, and look forward to further discussion when I'm properly battered, rather than half way. ;-) Evening all.

bournemouthblue added 17:25 - May 13
Didn't we average over 26k under Royle when we should have got promoted?

Admittedly in different financial times but it is do-able

RegencyBlue added 19:49 - May 13
Impressive analysis but the bottom line is what happens, or in our case what has not happened, on the pitch.

CaughtInTheBrambles added 00:18 - May 14
This whole article, clearly written in response to mine makes a number of assumptions that I feel are unproven and which undermines it's whole tenet. It is cleverly written because only those with a good understanding of economics.

Assumption one which underlies the whole statistical analysis of ticket pricing is that demand for tickets is relatively inelastic. This may indeed be true for SOME supporters but cannot be assumed for all supporters. I specifically argue that season ticket holders should be excluded from the argument. We can make the safe assumption that for the majority of Season ticket holders will get a season ticket even if it causes them financial hardship or precisely because it does not. This argument is all about those fans who used to have Season Tickets or have for many seasons just bought match tickets.

The experiments of offering £10 tickets for additional tickets purchased by Season Ticket holders is actually a difficult example to judge the elasiticity of demand by. On the face of it it seemed to work and would therefore suggest that demand for tickets is elastic rather than inelastic. (for those without a degree in Economics price elasticity is the measure of which demand for a product increases or decreases depending upon the price of the product,for a price elastic product if you increase the price demand falls whilst for a price inelastic product it stays roughly the same whilst if you decrease the price demand will increase if demand is price elastic or again stay roughly the same if it is price inelastic).

So allowing tickets at £10 increased demand. Oh that it was that simple, for price elasticity to be measured effectively demands an almost perfect market where every customer has a) the cheaper price available to them and b) They have perfect information. Neither was in fact true so the market was seriously impaired and therefore imperfect.

As an examples to clarify the above, the offer was only open to Season ticket holders and was not available on the day. This meant that it was not available to any supporter who was not able to obtain tickets through a season ticket holder. At the Palace game, I spoke to four fans who stood behind me who paid full price on the day, they were unaware and had not taken advantage of the offer because they did not know it existed. You may be wondering why, well they were from London (and we have a large section of fans who live in London) and knew no Season Ticket holders. They had been to many away matches this season but this was part of a small handful of home games. What put them off from home games was mainly price but also the lack of atmosphere. This is clear proof that the information and the market was imperfect.

Economic modelling is not, and never has been an exact science, indeed there is a body of work that suggests that if the price falls too low it has a negative demand on price. So it cannot be assumed that demand price is elastic or inelastic since the evidence is contradictory. Indeed if it was inelastic then the offer would have failed and/or demand for the next normal Saturday match would have held up. Sadly we will never know as we had the Derby debacle as the next game. So we cannot use the Palace game as any guide to elasticity of price demand. I may do some analysis of the previous offer game and the following game. But all in all the whole notion of assuming the elasticity of demand is way too complex to make assumptions. That is unless you have research that proves or disproves whether price is a major determining factor in whether supporters will buy match tickets.

The second odd assumption is that the issue is accross the board and affects fans in every price band, this is clearly also an unsubstantiable assumption. The concession prices paid by for example youths in those areas of the ground that allow it have not been considered too high based on my own evidence (evidence based on my experience in Section 6) for example the fact that younger fans will happily afford a ticket in the SBRS Upper then sneak into the Lower tier shows that the pricing in the concession bands is not an issue. The issue is almost exclusively around adult ticket pricing throughout the stadium. Dropping this assumption thus negates all the assumptions of average ticket price. It is not scientific to base a theory on unsubstantiated and false assumptions (it is what blew the Monetarist theory of Hayek and Friedman out of the water btw) It is for this reason that I concern myself only with the marginal returns of adult ticket prices to do otherwise also requires 'finger in the air' assumptions of the proportions of tickets in each price band and concession level.

Neither the poster nor myself are privy to exact ticket sales information, broken down into price bands, Thus the figures quoted are as innaccurate as any other analysis without this information. This, despite all the figures given sadly renders the figures as mere guesses. Aware of this I avoided this and concerned myself merely with adult tickets and the lowest price bands, I did average ticket prices myself based on a spread of adult ticket prices between the cheapest and more expensive parts of the ground. I went no further since to do so is impossible without exact and accurate information (which neither the poster or I have).

I suggest quite rightly that this issue should be seriously studied by the club, further that they could if market research indicates my theory is substantiated, experimented with using the three categories of ticket prices. Use Category C for the test, if it has no effect on sales then revert to category B at the rates they would normally use. It does boil down to elasticity of demand and whether it is, as I suggest elastic or as this post suggests inelastic. Only by asking and maybe testing the market will the answer be discovered

The writer of this post has a BSc in Applied Economics.

CherryHintonBlue added 00:48 - May 14
Some excellent discussion on the subject. Nice to see TWTD sparking some intelligent discourse instead of the usual sub-Beavis and Butthead comments. One thing which might affect some of the points made is to acknowledge that the turnover in season ticket holders is usually way higher than most people think: up to 50%, IIRC from "Why England Lose", a book which everyone interested in football and economics will have read. What do all the ex-season ticket holders do? What were the new season ticket holders doing in the past? As a knock-on, the offers on season tickets can change the demographic of the occasional supporters significantly.

Upbeat~ added 07:16 - May 14
Interesting comments CaughtInTheBrambles. I have an extremely busy week with exams ahead of me (including one this morning) and so cannot allow myself the time to formulate an appropriate reply. A first year history student just to clarify, but with a basic understanding of some economic theory.

I don't believe either of my assumptions are completely ungrounded, especially my comments on the price elasticity of demand for football matches. Limiting myself to a sentence, I feel the key here is a matter of keeping the attendance figures high, in order for the club to be able to warrant reducing prices substantially. Your focus on economic modelling and its limitations is, I feel, detracting from more pertinent discussion.

I completely agree that my statistical evidence is certainly not 100% accurate - I admit to this in the article, but felt it still gave a good indication of the ball-park figures we're dealing with. Again, focusing on the degree of accuracy of the evidence I provide is, in my opinion, detracting slightly from the point I wanted to make. At any rate, I'd struggle to believe that my figures are overly wide of the mark - they were designed to give an awareness of the type of figures we're dealing with.

As for my second assumption, an awareness of the word count did admittedly curtail any explanation. I also agree with you to an extent on this matter, especially with regards to the unscientific nature of my theory. As a youth myself, I can say that cost is a key factor as to why many of my friends do not attend games. I'm not overly surprised that your experience from Section 6 leads you to a different conclusion - the hardcore element of our fan base will not be deterred by prices (further evidence in favour of the relative inelasticity of demand).

You've also concentrated solely on youths, when my assumption took into consideration child and concessional tickets. Families and others entitled to concessions are similarly affected by ticket pricing, surely? I don't believe you can honestly suggest that pricing is only an issue for adult tickets. However, on saying that I do agree that the bulk of the issue rests with adult match day pricing - I too would like to see the club investigate this matter further (although I'd be surprised if they hadn't already done so).

I'm glad though that you did bring up the matter of average ticket prices, as my analysis was intended to give a general overview based on (as you say) the rather limited evidence available to the public. There is certainly room for a more detailed follow-up to this article, but I don't think anyone would have read it had I doubled its size. I've already made clear my reasoning for including season ticket sales above. A consideration of the tenets on which the club bases ticket pricing makes ignoring season tickets too simplistic an analysis for me. Merely lowering the price of adult tickets would surely negatively affect season ticket sales?

As you conclude, the matter rests on this issue of the elasticity of demand. I believe my argument holds true. I also disagree that the Cardiff and Palace games provided evidence that was necessarily contradictory - I think I've outlined my reasons for this conclusion in the blog. Everything points towards this being the case in my opinion, although the lack of concrete evidence is a stumbling block that will of course lead to a divide in opinion.

I'm glad this blog has generated some good discussion anyway. A final point - and this is why I did indeed carry through to the end my numerical calculations - I wish to make is that ticket prices cannot of course ultimately fall to anywhere near the figure that many people I've spoken to have suggested in order to secure their attendance.

Upbeat~ added 07:31 - May 14
Another matter of course is the explanation as to why we've experienced a substantial loss in attendance figures over recent years. If money was the key determinant (in light of the recessionary crisis etc), this would undoubtedly support an argument in favour of demand being elastic. However, I can't help but feel performances have played a larger part in deterring supporters from coming through the gates. Again, you can argue that this is speculative.

On a different note, someone could do a comparative study of ticket price banding across the league. This would help to determine whether or not a separate study into adult match day pricing at Portman Road should be pursued.

Reuser31 added 11:23 - May 14
Well written blog. Just thought I'd add that a student ticket for Hull City FC (Where I'm at university currently) costs £13 (Same last year for premier league football), and they have brought in average attendances this season of 21,168, for a stadium with a capacity of about 25K. In contrast, when I manage to get down to PR, my ticket costs roughly £20-25 depending on the stand, with attendances averaging 19,614 (as you said) in a 30K capacity stadium. Now I haven't a clue about economics, but it seems Hull are able to charge relatively low prices and bring in large crowds. Some would argue this is because Hull is a city, but as someone said in a previous comment, we were bringing in 26,000 supporters regularly under Joe Royle, so the interest is there. Hopefully an improvement in the standard of football next season will help improve attendances.

poringlandblue added 15:33 - May 14
for me its all about the product ive gone to watch, its £80 plus for me and my son to watch, food, train tickets and the arsenal game apart ive sat there bored sh?tless at the football on show regardless of how much i love itfc. for me the cost would be irrelevent if ive been on the edge my seat and entertained, much work to do pj!!

Kropotkin123 added 16:11 - May 14
Interesting to read the opinions floating around. But when you guys are on the inside looking out (purchasers of season tickets) its easy to forget that the product is just as important, for long term increase in attendance (and hopefully club profits), as the pricing is. I think the product needs to show significant change in order to entice people back.

At the moment I see positive change occurring at the club, and may next season check out Ipswich on their travels when they swing by my area of the country. But it will take a few seasons on positive performances (not results in my case, but probably results for most others) before I bother to consider more than a handful of games a season, or bother to invite some of my friends along.

I think I might well be one of the more difficult fans to bring back, as I have different interests now, and I'm not local. But even for those locals the product is just as important for fans, particularly as we are a 'family club'. A lot of families aren't going to fork out money for a day out to see Ipswich, unless performances are consistently better. Eg a father goes to see Ipswich, 5 games a year, is he going to go to the effort of encouraging his wife and 2 children to join him, if he knows there is a 50/50 chance it will be a frustrating, passionless or dull game, regardless of whether the price is £20, £25 or £30. Families can do other things, that will bring the family, overall, a lot more enjoyment.

The good news for Ipswich, looking in from the outside, is it seems like the product is changing for the better. A real Ipswich style manager in charge, should help bring back more locals. But we have to stick with this manager, even if it doesn't start too well. A 5 year plan with this guy, like we gave Burley, so at the very least, we get a stable team, playing good football.

I don't know exactly where it fits with all your pricing, but like I say the product needs as much updating as the pricing to encourage the numbers to fill your stats

Guthrum added 00:42 - May 15
Good blog and good debate in the comments.

December1963 added 11:30 - May 15
Interesting read but the bottom line is to get more people through the turnstiles we need to have a team that is in the top 2 of the championdship and at the worst top 6,if we can achieve this next season i believe that as the season progresses the gates will inprove up to the 23000 + and towards the end of a promotion challenging season up to 26000 + so over to PJ and his team.

WarkonWater added 13:11 - May 15
Optimum pricing is a complex area in all areas of economic activity, including football. We know that demand for watching one’s favourite team is inelastic. What we don’t know is the extent to which it is inelastic because there are variables other than price that determine demand e.g. league position, entertainment value on the pitch, the general economic climate etc.

I would argue the club is being short-sighted in charging such exorbitant prices for matchday tickets. The club will obviously argue it generates more revenue when 8,000 matchday tickets are sold at £30(a total of £240,000) than, say, 10,000 tickets at £22(a total of only £220,000). But this overlooks the following:

(1) People coming to Portman Road will also spend on food, drinks and club merchandise.

(2) Lower ticket prices would make it more of a habit for fans to come to games and many of these will end up as ticket season holders.

(3) Clubs with high attendances attract the interest of corporate sponsors so in the long run lower ticket prices and the resulting boost in attendances would translate to higher corporate revenue.

Good judgement and common sense has to prevail because you can make all sorts of assumptions, build complex models and perform all kinds of analysis but at the end of the day you cannot “prove” that a particular price will maximize revenue.


WarkonWater added 13:13 - May 15
Optimum pricing is a complex area in all areas of economic activity, including football. We know that demand for watching one’s favourite team is inelastic. What we don’t know is the extent to which it is inelastic because there are variables other than price that determine demand e.g. league position, entertainment value on the pitch, the general economic climate etc.

I would argue the club is being short-sighted in charging such exorbitant prices for matchday tickets. The club will obviously argue it generates more revenue when 8,000 matchday tickets are sold at £30(a total of £240,000) than, say, 10,000 tickets at £22(a total of only £220,000). But this overlooks the following:

(1) People coming to Portman Road will also spend on food, drinks and club merchandise.

(2) Lower ticket prices would make it more of a habit for fans to come to games and many of these will end up as ticket season holders.

(3) Clubs with high attendances attract the interest of corporate sponsors so in the long run lower ticket prices and the resulting boost in attendances would translate to higher corporate revenue.

Good judgement and common sense has to prevail because you can make all sorts of assumptions, build complex models and perform all kinds of analysis but at the end of the day you cannot “prove” that a particular price will maximize revenue.


CaughtInTheBrambles added 18:04 - May 15
My response was rushed and I have been away for a day or so, but it does seem that there are complexities in assessing whether demand for football matchday tickets is elastic or inelastic.

To assess this in any detail we have to create a model that takes all the various factors into account that affect demand for tickets for a given match.

Clearly there seem to be at least three posters that have some understanding of economic modelling. So I have been looking to see if there is any research and specific modelling of this market that will help us in this case determine if the assumption of the degree of market elasticity can be determined.

My initial research suggests there is, so I will try and get access to JANET (via a friend and get access to relevant articles. Just reading a selection suggests this is a live debate and the assumption of inealasticity is under question. But this will take me time. Clearly the model is beyond our ability to create, it would be an excellent dissertation subject for a student of economics or Political Economy (Oh to be 20 again, actually double that as I am currently under the effects of a night out clubbing in Camden!!!) But I will try and see if I can make headway.

jayessess added 11:06 - May 19
purely anecdotally, I'm a supporter who has been chased away by high prices. I live out of the area, and would love to go when I come back to Ipswich, but the prices have put me off. I can think of at least 5 occasions where I've seriously thought about going to a match, and the prospect of 27.50 to sit in the cheapest seats has put me off. I also would probably have gone with 2 or 3 other people, but since I'm the most motivated of the group, they wouldn't organise it without me.

I can't be the only person thinking like this can I?

As an aside, what's the economic logic behind raising ticket prices on matchdays? I mean why jack the price on the people who are logically the most indecisive of your supporters?

jas0999 added 11:44 - May 21
As a season ticket holder, I was very annoyed to see someone sitting next to me who only paid ten pounds for their ticket. It's a bit like being a regular down the pub. One day I go in with a mate who hasn't been before ... the landlord charges me £3.30 for a pint of lager, but only £1.50 for my mate.

Will be even more annoyed if the club try this again this year. Reducing season ticket prices would have been sensible.
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