Rail seats can help cut the price of football

October 2014. With the price of football very much in the news over the last week or so as a result of the BBC's annual survey and the Sports Minister saying she was "cross" and that clubs "must not take their fans for granted", it seems an opportune moment to look at the contribution that rail seats could make to the range of prices on offer to fans of clubs with all-seater stadia.Rail seats can cut the price of football

First a look at some numbers: though unlike the BBC's figures that were taken in isolation with no review of price spread or how costs stack up as a percentage of average income, we look here at elasticity and affordablity.

An Arsenal season ticket for £122

Drawing comparisons between Arsenal in the UK and Borussia Dortmund and Bayern Munich in Germany, what we see on the issue of affordability is a horrifying picture: a fan buying the lowest priced season ticket at Arsenal is paying over 8 times more as a percentage of average income than a fan buying the equivalent ticket at Bayern Munich and over 5 times more than a fan at Borussia Dortmund. That's £1,014 out of UK average income of £26,500, i.e. 3.8% of income for the Arsenal fan, compared to €140 out of German average income of €30,060, i.e. 0.46% for the Bayern Munich fan and €204 out of the same €30,060, i.e. 0.7% for the Borussia Dortmund supporter. At 0.46% of average earnings, an Arsenal season ticket would cost not £1,014, but £122!

And the fact that the lowest-priced tickets at Arsenal are over 8 times less affordable than those at Bayern is a direct result of the spread of prices between top and bottom being very inelastic in the UK. While at Bayern the cheapest season tickets cost less than a fifth of the highest-priced ones, at Arsenal fans buying the cheapest tickets are forced to pay over 50% of the top season ticket price. Nor is it just a small quota of tickets that the German clubs sell at the bottom end of their price range: at Borussia Dortmund no less than 27,000 of the 84,000 capacity (32%) are fans who are standing and thus paying the lowest, most socially inclusive price.

Not the clubs' fault

But, despite all of this, I have some sympathy with the English clubs. After all, in any business you are going to price your products at a level that the market is prepared to pay. And for as long as there are people prepared to pay over £2,000 for a season ticket, why would you not want to take that money off them? So I have no problem with clubs charging what they can get at the top of their price range for their premium product, i.e. a seat on an upper tier on the halfway line. However, having set the price for that seat at, say £2,000 for the season, it is then very difficult at present for English clubs with all-seater stadia to offer a lower-end price at anything like the affordable levels that their counterparts in Germany are able to offer. Why? Because unlike their German counterparts, the English clubs have only one product to offer: a conventional seat. And indeed in many new stadia, like the Emirates (pictured here), the very same model of seat throughout the ground.

If, in order to attract the next generation of lifelong fans, Arsenal were to offer season tickets for large numbers of these identical seats at a price equivalent to, say, the 0.46% of average earnings charged by Bayern, i.e. £122, then people paying £2,000 for their season ticket for ostensibly an identical seat would clearly not be best pleased. The clubs can justify modest price variation based on seat location within the ground (e.g. halfway line or behind the goal), but given the very high prices for which they are able to find customers at the top end of the scale, this modest variation does not enable them to offer affordable, socially inclusive prices at the bottom end.

That's where rail seats come in.

Premier League club executives have told me that the introduction of rail seating would enable them to offer this very different product at a different, lower, more socially inclusive price.

The logic is simple: the spectator willing to pay £2,000 for a season ticket for a padded seat high up on the halfway line isn't going to complain if a much lower price is charged for a rudimentary metal seat low down behind the goal in an area where fans are expected to be noisy and stand, as allowed, during prolonged periods of excitement.

While still "seated accommodation" as required by the law, that product is of no interest to the former spectator. It is clearly a very different 'product' that can be offered at a lower price without undermining the club's pricing structure for its core product offering, i.e. conventional seating.

Authorities blocking affordable pricing

Through their refusal to date to permit clubs to install rail seating, the authorities are denying them the chance to broaden their range of prices and make football more affordable to fans on a modest income.

Instead of just getting "cross" with the clubs for not offering lower prices, the Minister might be better advised to provide them with the means of doing this. Permit the clubs to install rail seats (with exactly the same capacities and ticketing procedures as at present) and many, I am sure, will utilise that opportunity to bring the lower end of their price range down to a much more affordable level. Deny them that opportunity and, for the economic reasons set out above, they will remain hamstrung and unable to do so.