You can’t take the economics out of football
Liverpool and Spurs have been offered 16,613 tickets each. Five per cent of these are expensive, at £513 each. A further 21 per cent are available at £385. But the bulk – 54 per cent – cost only £154, and there are even 20 per cent which can be bought for just £60.
These compare favourably with other major cultural events, such as a performance at Covent Garden with top opera stars.
Uefa organises the competitions and sets the prices of the tickets. The demand is of course very much greater than the supply. This will be reflected in the prices charged on the unofficial market in tickets.
Why does Uefa not bag this revenue for itself? Even if it doubled the official prices, the events would still sell out.
The NFL in America follows a similar policy for the Superbowl.
Top behavioural economist and Nobel laureate Richard Thaler quotes a top NFL executive in his book Misbehaving.
The NFL “takes a long-term strategic view” towards ticket pricing at the Super Bowl, keeping them reasonable despite huge demand in order to foster its “ongoing relationship with fans and business associates”. The point is that both Uefa and the NFL have repeated dealings with clubs and fans. They judge that it would be counterproductive in the longer term to exploit their monopoly of major events.
In contrast, the hotels which the English soccer fans are now desperately seeking to book will probably never see the individuals who stay there again. It’s a one-off transaction, and so they are free to raise their prices so as to maximise their immediate profits.
Air fares are also going through the roof, particularly for the exotic location of Baku where Chelsea and Arsenal will play. There are far fewer travel options than there are to Madrid, where the Champions League game will be held.
Although the algorithms used by airlines will set these sky-high prices, some of these companies will be used repeatedly by quite a number of fans. They therefore do run the risk of creating a bad image which damages their business in the longer term.
The fact that the two finals are an all-English affair is raising concerns in other major European soccer nations. The standard of play in Spain’s La Liga or Italy’s Serie A is certainly comparable to that in the Premier League.
But the Premier League dominates in terms of the monies it receives from television rights – more than twice La Liga, for example.
This means more money for clubs, which can then buy more top players. This phenomenon is observed throughout modern popular culture. Success itself breeds success, and unto him that hath, more shall be given.
It is a totally different world to when the maximum wage for players was fixed at £20 a week, and they wore Brylcreem and smoked Woodbines. But economics is always present.