Article The changing value of money

The changing value of soccer

On the 20th of February 1992, the leading clubs at the top of the Football League broke away from the FA to set up the Premier League. This was done in a bid to retain a greater share of the money which had been coming into the game, primarily from increased television deals. The period around this breakaway also coincided with increased attendances at matches due to all-seater stadia and the return of English clubs to European competition.

The move to all-seater stadia was on the back of the Taylor report, published in January 1990, which recommended them after the Hillsborough disaster. (The Hillsborough disaster occurred in April 1989 when 96 Liverpool fans were crushed during a FA Cup game. While the case has recently been reopened, it is generally accepted that inadequate safety features of the stadium were a significant factor.) The return to Europe was after the five year ban imposed by the Thatcher government after the Heysel disaster in 1985. During which continental European teams began to pull away from the English clubs in terms of ability, leaving English clubs at a disadvantage when it came to their European return in the early nineties. A disadvantage many attributed to a lack of financial power available to the English clubs under the previous arrangement.

Money In The Game

The main sources of this new income centred on television rights, sponsorship and ticket sales. While the biggest clubs have further diversified their income sources since then, these three areas are still the main source of income in today’s game. This article will examine these different sources, comparing the change in financial terms over the twenty or so years and noting the change for fans during this period.

The initial television deal for the right to show matches in the UK, as outlined by Sporting Intelligence was awarded to Sky for £191m over five years. With a highlights deal and overseas rights, £22.5m and £40m respectively, this meant there was £50.7m a year to be divided up amongst the clubs. The breakdown of the current deal covering 2013-2016 now being; £3bn for the UK rights, £179.7m for the highlights and ~£2bn for the overseas rights. (No official figure has been given, this is an estimation.) ,The total per year has now risen to the £1.7-2bn range. This has been roughly a forty fold increase over twenty years.

This increase has also been replicated in shirt sponsorship deals. When the Premier League was formed, sponsorship was a relatively new phenomena. Taking Manchester United as an example, their first shirt sponsor was in 1982 with Sharp Electronics. At the start of the first Premier League season, this deal is believed to be worth around £200,000 a year. For the upcoming season, Manchester United have announced that Chevrolet, American car manufactures, will be the main shirt sponsor in a deal worth just under £50m a year, a two hundred and fifty fold increase.

Ticket prices have shown similar increases with a season ticket for Manchester United for the season just prior to the start of the Premier League costing £190. When compared to the season just passed, this had risen to £532, a £200 increase on top of inflation since 1992. While this rise is not as eye catching as the increase in the other sources of income it should be remembered that, as mentioned previously, sponsorship and television deals were relatively new ideas. Therefore the initial deals were likely to undervalue them. A recent article by The Mirror, showed that season ticket prices have risen 189% above inflation since 1981. Also the pool from which ticket buying fans can be targeted is relatively limited when compared to the unlimited target audience which television and sponsorship can reach.

While season ticket prices show the trend of how ticket prices have changed over the last twenty years, individual ticket prices could be more useful later when determining how these increased prices have affected fans. Before the Premier League began, the cheapest match day ticket which could be bought for a Manchester United game was £4.50. This had risen to £31 for next season and a near seven fold increase, more than the rise associated with season tickets. The cheapest tickets are also only available in small pockets of the stadium rather than twenty years ago when there was large swathes of terraces. Clearly the increased revenue is not being prioritised for ensuring fans are able to attend matches, and the game itself has changed little in the last twenty years. With some suggesting it has gotten worse.

So where has this money gone?

Unsurprisingly to most people, the majority has been funnelled into players. The season before the Premier League started, the average annual First Division wage was £59,904. For the 12/13 season, the most recent season for which data is available, this had risen to £1.6m a year, a near twenty seven fold increase. In contrast, the average UK workers’ wage increased one and a half times in the same time period.

In the same time period the transfer record has been broken thirteen times. Starting off at £8m for Roberto Baggio’s move from Fiorentina to Juventus, it now stands at £85.3m for Garth Bale’s move from Tottenham Hotspur to Real Madrid last year. Also a recent report from Fédération Internationale de Football Association (FIFA) has shown that 28% of transfer fees go to agents or other third party organisations.

Changing Demographics

But what about the fans who are being fleeced to prop up this bubble around players? With match day prices rising seven fold, when compared to average wage rising only two fold, it is obvious that the working classes are being pushed out of soccer, or at the very least being squeezed to the maximum. This increase in costs does not just affect the working classes, it also reduces the ability of teenagers, student and the elderly from attending. Throughout this period it should also be noted that the game has not fundamentally changed in anyway. While the approach by teams has become more professional, no all night drinking sessions before games for example. This change is likely down to the increased money in the game rather than the increased money reflecting new found professionalism.

There was little research done in the eighties and nineties on the breakdown of fans; age, gender or working status, of fans attending games, which makes comparisons difficult. However using the numbers from one of the first papers looking into the demographic of soccer fans, roughly 20% of a crowd was under twenties in the years around the beginning of the Premier League. Surveys in the last few years have shown that this figure is down around 10%. Clearly with changes in population sizes and numbers attending matches increasing, meaning it is not possible to draw definitive conclusions but these figures are food for thought none the less.

Despite this there has been no corresponding dip in the number of people claiming to be fans, does this rubbish the idea that less well-off fans are being pushed out of the game? Well not quite. From one of the most recent Premier League Fan Surveys it can be seen that mobile devices, laptops and smartphones, have a large proportion of the match watching population. This is likely due to the increase in quality of broadband coupled with the proliferation of streaming sites online. The ability to watch a match is no longer determined by ticket price or television scheduling, you can watch nearly any match around the world through your laptop.

However, this new advance could also bring unforeseen problems unto clubs. With the explosion of soccer in Asia, it has been noticed that soccer clubs have become brand names to be followed rather than a club you follow. This phenomena has the potential to spread into England as younger and less well-off fans become priced out of attendance.

A final note on this ongoing gentrification, with the move of soccer to becoming more of an event to attend for most fans rather than having local or emotional to one of the teams. I feel that this could lead towards teams, particularly those in the higher divisions becoming like franchises which people follow rather than having a strong tie with that club.

I do not want to come across as one of the types who always hark back to how things were back in the day, I do think the English FA should start asking itself what it wants from the people who come to the matches. While the price increases for tickets are unsustainable in the long term, I do not think that this will be reached in the next ten years or so. However, I do believe that the tipping point for the gentrification of the type of fan who can afford to attend is occurring right now. Personally I do think this is a bad thing, but again it is up to the organisations charged with the running of the game to ask what they want.

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