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Untold Economics: Chelsea try to recoup the Abramovich money from the fans.

Untold Arsenal on Twitter @UntoldArsenal

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By Tony Attwood

While Arsenal were playing in front of some 70,000 people in Germany last week, in the same competition Chelsea played Bayer Leverkusen in front of 33,820.  The reason was a ticket price rise at Stamford Bridge that was so great that home fans would not go and the away club felt the need to subsidise their own supporters’ tickets.

Shall I say that again?

The away team subsidised the tickets of their own supporters, so shocked were they by the prices being charged.

Chelsea tried this trick four years ago, but then again there was a supporter revolt, the supporters stopped going, and so Chelsea cut their prices.  Now they are up again, having already put up their ticket prices this season, and last season.  So Bayer Leverkusen offered a €20 subsidy to thousands of travelling fans.

David Johnstone of Chelsea fanzine cfcuk told the Football Supporters Federation: “The rumours are that we lost 6,000 season tickets. We have a loyalty point scheme and up until last year there was a queue to get a season ticket – you needed enough loyalty points. But you could get a season ticket with no loyalty points now. They’ve probably sold out by now but it’s all new people. They have to realise there’s a recession.

“We meet the club four times a season at the fans’ forum but they don’t listen. Peter Kenyon was good and when he was chief executive there was a price freeze for four seasons, but the current chief executive would rather have people come for one game and spend £300 in the megastore. The atmosphere was woeful on Tuesday. Where they think a 17-year-old will get £750 from for a season ticket I do not know.”

According to FSF Chelsea Supporters’ Group co-vice chair Michelle Shaw called for a boycott of the next home Champions League game against Belgian side Genk.

Part of the problem for Chelsea was that the visiting supporters out-sang the home crowd for the whole of the match, according to reports (obviously I wasn’t there), and Bayer Leverkusen’s fan support officer Frank Linde told the Football Supporters’ Federation he found Tuesday night “noisy like a cemetery”.

So, I can hear any Chelsea fan who has come onto this site say, what about Arsenal?  Isn’t Arsenal expensive too?  (Indeed I hear some Arsenal supporters say this too.)

Yes, it is, compared with the Bundesliga where you pay €10 to €15 for standing and seating is from €20.  (I used to put euro prices also in pounds, but the pound has collapsed so fast since our coalition government cut everything and said don’t worry, private industry will take up the slack, that it is now equal to about a Euro.  If you live in euroland come to the UK – it is incredibly cheap because of the exchange rate.  But that’s another beef, largely because I am now on holiday in Cyrpus where they have the Euro).

Anyway, prices in Germany are not quite the point.   Here’s another piece from the FSF article.

“On the same night that Chelsea played, Huddersfield Town also visited Sheffield United’s Bramall Lane for a derby which would usually have seen hordes of away fans follow their team. Last season the Terriers took more than 4,000 to Hillsborough but this season only 1,549 made the short journey to Sheffield.

Sheffield United had originally set aside 4,507 tickets for the away support meaning approximately 3,000 were not sold. At £28.50 per ticket this means the boycott could have cost the club as much as £85,000 in ticket sales if every ticket had otherwise been sold.

The FSF contacted both Chelsea and Sheffield United for their views. Neither club has yet replied.

So where do I see Arsenal in this?  Are we just as guilty as Chelsea and Sheffield U?

For me, what is missing in the FSF article is any sense of broad economic perspective and any marketing perspective at all.

Clubs need money.  As supporters we all get at them when they start spending so much that they go bust.  And we get at them when they don’t spend enough.  And we get at them when they charge us too much.  In short, we get at them.

But we live in a world in which over 60% of League One (ie division 3) clubs have been in administration in the last ten years.  That is not only disgraceful for the industry, it is also disgusting for all the small traders who in each case are owed money which they never get as the clubs go down.  League One is the worst, but the other leagues are not far behind.

So the clubs need money, and they get money in all sorts of ways – by selling more tickets, by selling up and coming players, by raising prices, by cutting costs, by reducing staff, by getting rid of the Academy…. you know all the things you can do.

Thus the problem is not one of putting up prices on its own – that’s like saying the problem of drink driving is cars.   Yes cars are part of it, so is alcohol, and so are the people who drive.

In football it is a problem of balancing budgets and a question of what the market will stand and where clubs are in the world of football regs.   Chelsea and Man City for example have unusual problems in that they need to get their income up to meet whatever is left of the Uefa financial fair play regs.  For the rest of the clubs there is the issue of avoiding administration and finding new revenue.

And for everyone it is a case of the market.

I can write a little on marketing with some authority since I have been chairman of a marketing company (as well as head of its creative side) for 30 years.  Marketing has always been the art of giving the customer what the customer wants at the price the customer is willing to pay.  That’s it for movies, Sky Sports, coffee, and football.

The fact is that although anti-Wengerian blogs predict rather tediously each year that the season ticket waiting list will collapse, but it is never true, because Arsenal tickets are at a price enough people are willing to pay.  Indeed more than enough because I understand from meetings at the club with those in senior positions who know these things, the waiting list is ten years.  (And if you are concerned that this might not be true because you were number 39287 on the waiting list last year but are 19310 this year, we did an article on this last season – the numbers are grouped according to whether you want one season, two next to each other, three next, and so on.  It is not a sequence).

What Chelsea and other clubs have done is simply got their marketing wrong.  They don’t have the incredible depth of support that Arsenal has, and so when prices go up, they don’t have people still willing to pay.  The depth of loyalty is not there.

Everything has price boundaries.  A seat might sell at £40 no matter what.  The same seat might sell at £50 no matter what, or it might sell at £50 but only in the good times.

What’s more, everything in marketing can be handled in lots of ways.  Look at Bradford City – they announced somewhere around 2007 that they would cut their season ticket prices dramatically if over 10,000 fans bought seasons tickets (something along those lines).  It worked, and although I am not sure this season, I know that in the past while other clubs in their league have got say 4,000 spectators, Bradford get 12,000.  I think they have over 10,000 season ticket holders this year – they are currently 20th in the fourth division.

Now that has always seemed a brilliant move to me – get the same money in from twice the number of people.  But other clubs have not followed the approach.  I don’t know why.

So while I had a  snigger with everyone else about Chelsea once again getting a more modest crowd, most of my sniggering was about the way their marketing department got it wrong.  My smile however was because the failure of Chelsea to get the crowds with higher prices contrasted with the incredible loyalty of Arsenal supporters, which funds our club and stops us getting into a situation where the benefactor spends billions to try and build a successful team, and then has to recoup it from the fans, in order to meeting Uefa regulations.

And although it is perhaps a minor point, we continue to offer League Cup match tickets at £10 and £20.  Even against Ipswich in the semi final last year, when it was clear the game would sell out at £50+ a ticket, the prices were £10 and £20.

Funny about Chelsea.  All that money, and they still can’t get it right.

Join the FSF for free today from this link. http://www.fsf.org.uk/join.php

11 comments to Untold Economics: Chelsea try to recoup the Abramovich money from the fans.

  • WalterBroeckx

    And for those saying we could only sell some 46.000 tickets for the game against Shrewsbury just a reminder that this game was not part of the season ticket package. And a link http://www.arsenal.com/news/news-archive/club-pays-tribute-to-loyal-supporters

  • TwoLeftFeet

    Fantastic article..Untold at its best! Keep up the exciting journalism!! Arsenal definitely have a fantastic support (even though the odd Gooner comments make me mad!!) and it’s good to see the club recognizing that.

  • Mark

    I do wish you could get your facts correct rather then expose your own bias

    a) Todays exchange rate is 1.14 euros to 1 gbp
    b) This Coalition Govt came to power in May last year.
    On the friday at close of play on 30th April the exchange rate was er .. 1.14. Midway through May it was 1.16, and by the end it had risen to 1.19. possibly on the back of decisions then being announced to make cuts, as by the end of June it was up to 1.22
    Either way there is little or no change as at today from the 1.14 when the Coalition took power. So is completley incorrect to say “the pound has collapsed so fast SINCE our coalition government cut everything and said don’t worry, private industry will take up the slack, that it is now EQUAL to about a Euro”

    ALthough I could and would as a season ticekt holder prefer to take you to task for your er …unbiased (sic) support for the “Lord” Your nuance for twisting the political/financial item is a far more concrete way of demonstrating how you like to present your “facts” to match your own world view and belies the lack of depth and truth to what you write when supporting your Lord. Blind faith, hmm now what can that lead to I wonder? Discuss and present facts both postive and negative

  • Sean

    Very good article Tony. Well done. The silence from the anti-Arsenal media is deafening as usual.

  • Gord

    A question. How is this panning out in the womens leagues? I think Arsenal said that our womens team is getting better attendence than last year.

  • Pete

    Maybe.

    I have had a season ticket for many years. However, due to family commitments, I find it difficult to get to weekend games. After we moved to the new stadium, I used to have no problem at all selling it on (face value of course) to a circle of friends and acquaintances whenever I couldn’t go. Last couple of seasons I have had to start using TEx – and it didn’t always go then unless one of my friends I sit with also couldn’t make it in which case “two together” worked more easily. Now I can’t seem to shift two together. Also, prospective purchasers are starting to negotiate on price (i.e. want to pay below face) – which I have resisted – but it then means my seat is empty which I believe is a minor crime!

    I also see matches going to general sale which never used to happen.

    Is it the economy – or is it the form blip?

  • gulp

    @pete can you not rent them out to overseas “football holliday package” companies? they would pay good money to have a seat to offer their customers….

  • Ian Trevett

    As I posted on another thread,46,000 for Shrewsbury was an amazing crowd – probably the highest ever for a match against a fourth Division side.
    BUT – Arsenal’s prices are far too high (excluding the Carling Cup). I for one cannot afford the season ticket.

  • Laundryender

    Tony you are a star

    Untold at its absolutely frigging best well done. Arsenal has always had a great hard-core support.

    I remember in the late 70s when Malcolm Allison was at palace, playing good football but could not attract a crowd. He said to the press

    “Look at Arsenal week i week out 36,000 win or lose, that is what we have to do”

    PS Mark was right on the Xchange, but let that not spoil a good factual analysis

  • Charlie

    The interesting thing to me is that Chelsea appear to be panicking about the Financial Fair Play Regulations as you would expect but Man City go along as if it doesn’t apply to them. They have this stadium deal and no contingency if that is found to be a breach of the regulations. Is this because their plan is water-tight, do they have a contingency that i don’t know about or are they being arrogant and assuming that they are untouchable ? That’s what i’d like to know. If it’s the latter i would think that there is a very real possibility that the club will implode in a few years with a wage bill that is unsustainable.

  • Shard

    @Charlie

    No they won’t. Not unless their backers pull out, and that doesn’t look like happening. Regarding FFP. I really don’t think anything much will be done about it. But if Chelsea, ManU, Arsenal, Liverpool etc can work together at it, then perhaps they can put pressure on UEFA to not accept ManCity’s deals. (Although Swiss Ramble said, that they fall within the wording and in some cases even the spirit of the rules) But don’t forget, NO ONE can compete with ManCity’s financial muscle. Not even Chelsea. SO they may want them out as well..

    Of course. Nothing stops ManCity from spending and just winning the league and the domestic cups year on year. Forget about the Champions League altogether. Until UEFA are then forced to invite them back.