Globalization Myths & EPL Ticket Prices

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Ahh, neoliberal economics. Words like “merit” and “competition” get tossed around like popcorn in a hot kettle. The “free” exchange of goods, labor, currency, and information will, like a rising tide, lift all boats eventually. If we just repeat that last line five times really fast, it will come true.

Why such a vague and opaque opening ramble? EPL ticket prices. Rather, the soaring, ever-increasing EPL ticket prices.

Allow me to explain.

Manchester City fans are mad about exorbitant away game ticket prices. Is this news? Not in the “new” sense of the word. As of 2012, EPL ticket prices had risen five times faster than inflation. As of 2011, EPL ticket prices had soared 1,000% over the prior two decades. By comparison, the current inflation rate for the UK economy is 2.7%. Why the astronomical difference? Why are English fans so royally pissed?

Well, overall, EPL club revenues have increased dramatically over that same period of time. This Telegraph interactive page shows you each club’s revenue, debt, wages, and cash flow. Despite increased revenue and ticket costs, clubs are mired in debt. Why? Well, this SoccerPolitics chart shows a primary cause: huge and ever growing wages to players.

Of course, I am always happy to see players, i.e., labor, get a nice slice of the pie, as compared to management. However, sometimes we have to look at pernicious secondary effects. In a sense, the EPL is the success story of globalization – the league is surely and steadily taking over the world. You can catch EPL games on all four corners of the globe, and find Arsenal scarves in alleyways from Capetown to Toronto. Soaring EPL ticket prices highlight an overlooked fact: (neoliberal) globalization often screws over local consumers.

How does (neoliberal) globalization pit consumers vs. workers vs. businesses? In a theoretical world, the increased overseas revenue could allow EPL clubs to pay down debt and decrease ticket prices,no? In a theoretical world, the increased television revenue could allow EPL clubs to hire more local folks in ancillary roles at stadiums. These are the rising tide arguments, US fans will recall them because they often come up in “should we subsidize a team’s stadium” debates across the land.

They are nice in theory, but seldom materialize in practice. Here’s why. First, the product created by labor and sold by businesses is non-material. Consumers purchase the right to view a live performance, not a car or a bottle of shampoo. This creates a mini-monopoly: no matter how many Walgreens and CVS you go to on Sunday, you will find dozens of deodorant brands but no showings of Manchester United games. Of course, you can watch other teams and other leagues or simply not watch at all, but you can’t change your mind later and buy the chance to view the same game live. Thus, for local fans who enjoy going to games, you hold less cards than the club. The consumer has less bargaining power than the business.

In theory, yes, a consumer could ditch Manchester United for another club, but here’s the catch: limited seating at stadiums. No matter how large the critical mass of fans leaving one club for another (with less expensive tickets), eventually chairs will get filled and, most likely, the new club will capitalize on demand to increase prices (see how this game works?). D’oh! I also don’t know of a critical mass of fans seeking to leave one club with obnoxious prices and hopping to a Championship side. The City fans have picked the quasi-Exit option, but remain Loyal, even if they exercise their Voice.

Second, the soccer sports entertainment complex is a zero-sum game in terms of labor and results. Each game has a single winner and loser (and draws). However, within that game, each player can only perform for one club at a single time. While in other economic fields a superstar consultant can jump from business to business, sometimes in the same day, here, Cristiano Ronaldo has to decide before Manchester United or Real Madrid. You can’t have your cake and eat it too. Thus, talented labor has an upper hand in negotiations with the business.And businesses literally compete, and compete quite publicly – everybody can see the win/loss column in the paper.

What has this competition fostered? Well, on the plus side, the EPL’s importation of all-star foreign immigrant talent has exposed locals to different cultures, customs, and individuals of distinct nationalities. On the negative side, despite kissing badges and praising fans in pressers, these foreign immigrants lack community ties, enjoy an often transient and rootless stay in England, and thus most of their wages exit the country.

Many would argue that the players do spend money, and this trickles down to the community. Players own a home, buy nice jewelry, purchase several sports cars, etc. This is a version of the classic Reagonics claim of “trickle down economics.” That argument is itself a hybrid of a neoliberal metaphor for the economy as a pie – less taxes and regulations allegedly allow business to grow the pie, and thus everybody gets a supposedly larger slice, even the poor.

Here’s the problem. When you view the entire global economy as a single pie, not just each country as a single pie, then you don’t really grow the pie, you just slice it differently. Robin Van Persie is now a very rich man. Manchester United fans, though, will be paying for RVP’s wealth for decades of higher ticket prices. His wages will have little-to-nill effect in improving the local community, aside from that warm, fuzzy feeling of winning a game. Ironically, as the English can be more and more proud of their beloved league and clubs, they increasingly cannot afford to catch a game.

In summation, the EPL is a premium product and (neoliberal) globalization has pitted English consumers vs. the rest of the world. While (neoliberal) globalization has opened the doors in the UK for the entry of cheaper staples like toothpaste and thus benefited consumers at least in terms of price. However, the exportation of the beloved EPL has done the opposite for English fans. Yes, the product they consume is arguably better. But 1,000% better? Not quite. Expect ticket prices to only get worse. English fans at EPL games may someday go the way of the dodo.

Elliott’s eBook, An Illustrated Guide to Soccer & Spanish, is available for only $5 at Amazon.

5 thoughts on “Globalization Myths & EPL Ticket Prices

  1. Pingback: Upside: Want to be a soccer player | US Soccer Players

  2. I have wondered for years when Pro sports leagues will start subsidizing tickets in order to get young enthusiastic fans in the crowd. Student sections are what make college football such a great television product. As the EPL crowds get more gentrified, the TV spectacle declines. They need season ticket sections- tickets that are cheap, but can’t be resold, offered to fans who will give up a day to physically wait in line to get them. Rock bands do a similar thing to get good crowds for halftime shows.

    • Interesting thought – subsidizing attendance. I definitely concur that the EPL spectacle and crowd songs are part of the fun (even watching from tv). Here’s hoping not too many suites and club boxes will kill the atmosphere.