Premier League clubs could face action over ticket prices if fans are no longer valued

Football, for generations, was the domain of the working class. Stadiums across the nation were filled to capacity every week, a sea of flat caps and cigarette smoke as thousands flocked to see their heroes bring some joy to their weekend after a gruelling work week.

The flat caps and cigarettes may have disappeared, the latter certainly not missed, but the happiness that football brings to its community-based teams remains. Thousands continue to attend, in pursuit of the unique euphoria that only football can truly provide.

However, as times have evolved, so has football. It was inevitable; nothing stays the same forever.

Some attribute the formation of the Premier League in 1992 as the turning point that set the game on a path of irreversible change. In truth, time, technology, and attitudes, among other factors, meant stagnation was never an option.

Ticket prices are no longer as affordable as they might have been 40, 50, or 60 years ago. There are now varying levels of support, ranging from watching the game on a terrace with a limited view to enjoying it in a hospitality box complete with a personal chef and a bottle of Margaux.

ALSO READ: Why Ferguson is stepping down as United ambassador

READ MORE: Pep Guardiola gives fresh Man City future update with contract admission

All these factors come at a cost. As football clubs increasingly rely on revenue generation to cover the escalating costs of payroll, transfer fees, agents, and club infrastructure to maximise other business opportunities, the cost is often passed onto the consumer.

However, in this case, the consumers are the fans, who are not mere customers. The collapse of the European Super League should have been a lesson.

Fans understandably become irate when clubs attempt to offset increased costs through higher ticket prices, with clubs often arguing they have no alternative.

Whether you side with the fans or the clubs largely depends on your personal view of modern football and how clubs must now operate within a multi-billion pound global industry with numerous stakeholders. To provide some context, Premier League season ticket prices have largely remained static for some time.

In a period of low inflation and soaring Premier League broadcast revenues both domestically and internationally, there was less strain on clubs as businesses. At a time when they were reaping more financial benefits than ever, raising ticket prices for fans would have been an unattractive move.

However, the economic landscape has significantly shifted, and indications of domestic TV rights reaching a plateau have been evident for some time, a trend that will inevitably lead to a decline in the forthcoming years.

The latest Premier League broadcast deal was hailed as a triumph, and superficially, an increase from £5bn to £6.7bn seems to be so. However, this deal now spans over four years instead of three, and the Premier League has conceded an additional 70 games per season, totalling 270, to broadcasters.

In actual terms, the real value of each game has decreased, while the 'rise' is merely the Premier League maintaining its position. The Premier League still harbours hope that the ongoing international fascination with English football's top-flight will generate larger revenues when the next cycle arrives, particularly with the United States now being a market experiencing significant growth.

While it's expected that these revenues will significantly increase, it may not be the cure-all for Premier League clubs' woes. Over the past decade or so, ticket prices have largely remained static.

However, with rising costs and external pressures, of the 12 teams that have announced their season ticket prices for the upcoming season, only Crystal Palace has maintained a freeze.

Liverpool has implemented its first rise in seven years at 2%, Manchester United's prices have gone up by 5%, Arsenal and Tottenham Hotspur by 6%, and Brighton and Hove Albion by 8%. Brentford, Burnley, Everton, Manchester City, Sheffield United, and West Ham United have also hiked prices for the next season.

For Nottingham Forest supporters, this season's ticket price increase was particularly harsh, with the club raising its season ticket prices by an average of 24% for the 2024/25 season, even if they are relegated to the Championship next season. Aston Villa also faced backlash from fans earlier this year when they were perceived to be capitalising on the long-awaited return of Champions League football and a place at the top of European football by increasing prices for games at Villa Park.

Aston Villa has faced criticism from the Supporters Trust and football enthusiasts alike, being branded "out of touch" after setting ticket prices for home Champions League matches at up to £97 this season. Pricing for the adult tickets in the expanded 36-team format starts at £85, £94, and £97, though a small concession is offered to season-ticket holders, who can purchase them for £70, £79, and £82 respectively.

In response to the backlash, Aston Villa argued the necessity of "difficult decisions" to remain competitive. The uproar, however, seemed to fade when Villa Park came alive with an iconic European game that saw Jhon Duran score a late goal leading to an electrifying win against Bayern Munich.

Though the victory was spectacular, it overshadowed the earlier protests about pricing. Striking down such policy changes often means fans must resort to boycotts, but in the highly commoditized world of the Premier League, vacant seats are quickly filled, thus maintaining the market dynamics that owners exploit: demand outstripping supply keeps their leverage intact.

Like all sectors, football is grappling with the issue of escalating costs, while fans are also feeling the financial squeeze in their daily lives. Market-driven elements and soaring inflation have affected major cost lines including wage costs, labour-based contracts, utilities, and rates at clubs, most of which are operating at a loss.

Drawing some inspiration from the brilliant 2011 financial drama, 'Margin Call', many clubs believe that the Premier League's broadcast revenue has started to dwindle amidst macroeconomic pressures forcing everyday costs to rise. Despite these external factors, player wages and transfer fees continue to skyrocket.

This necessitates finding ways to offset these costs, such as hiking ticket prices and merchandise. The fear is what happens when the music stops altogether.

While it's an unpopular move for clubs to resort to such measures, in an industry where most clubs sell out their allocations and demand is expected to persist despite price increases, clubs now have the collective power to make such a decision. Once one club broke ranks, the others followed suit.

Season tickets also play a crucial role in maintaining cash flow within the business. The summer months can be financially challenging with no games being played, yet the need to sign new players and spend money in the market remains.

Season ticket sales provide a crucial cash flow for clubs during this period, and any increase in revenue ahead of the season is a welcome boost. Clubs also face the challenge of remaining compliant with the Premier League's current profit and sustainability rules, as well as the upcoming squad cost ratio regulations.

Both carry sporting sanctions through points deductions, which can have significant business implications.

A breach could be £20m or as little as £2m. Regardless, it will be penalised, as Forest has discovered this season.

In an era where clubs are striving to raise more funds to meet costs and stay compliant, ticket prices present an opportunity for additional support.

From a business standpoint, increasing ticket prices would be a standard course of action, particularly considering that the Consumer Price Index inflation has surged 33% since May 2014. This means costs have risen while ticket prices have remained stagnant.

Clubs are now beginning to bridge this gap.

However, from a fan perspective, football clubs are community assets, and fans are not merely customers. If a business starts charging more for a service, you can look elsewhere for a cheaper deal, but fans cannot simply change their loyalty and watch football elsewhere.

Football clubs must find a balance, and not all are succeeding in doing so. However, it's difficult to feel too much sympathy for large businesses where the owners and stars earn millions.

For fans, the cost of living has surged in recent years as we emerge from the pandemic. Budgets are tighter than ever, and people are having to prioritise more and more.

While some consider football a non-negotiable expense, for others it is simply an unaffordable cost.

There is no wealthier domestic football competition on the planet than the Premier League. A league that spends tens of millions taking its own clubs to court; a league where increasing spending on wages and transfer fees is not only expected but encouraged by some fans, fuelled by social media; a league that generates billions in revenue each year, one would think that more could be done to ensure football is affordable for fans.

The same applies to UEFA and the clubs competing in its competitions. Matchday revenue hasn't been the most important item on a club's balance sheet for a long time, but it has often been the first lever to pull when cash needs to be found.

Broadcast revenues continue to be the main source of income for clubs, followed by commercial revenues, and then matchday revenues. Clubs have begun to reduce their dependence on broadcast revenue due to the potential decrease in the value of broadcast rights in the coming years as broadcasters may not be able to afford to pay more each cycle.

As a result, they are exploring other avenues, such as capitalising on global fans who cannot attend live games but want the same experience.

There is no evidence to suggest that increased revenue from these fans would be used to lower ticket prices for those attending matches. The clubs still require the matchday revenue, which is crucial for cash flow during lean periods.

During the summer months, when there is no income, the money from season tickets comes in. During the season, fresh cash in the millions enters the building every few weeks.

While the value on the balance sheet may not be as high, its importance in terms of cash flow for a business is. The further down the pyramid you go, the more important matchday revenue becomes.

There are always two sides to every story, and as big business, which it undeniably is now, and which we played an active role in creating, these clubs see matchday revenue as a revenue stream to be relied upon, one where supply and demand dictates pricing. Clubs are always going to need to be competitive, but that is a hard line to sell fans at every price hike.

There is only so far supporters can go before they say no. We're not at the point where we are facing mass walkouts and non-attendance at games as, as mentioned before, there is so much demand.

But it will come at some stage in the future if the fans continue to be squeezed out. It is cliche, but football is nothing without fans.

Watching empty stadiums and fake crowd noise during the pandemic was proof of that. The passion is of value as it is what makes the Premier League stand out, it is a major part of what broadcasters pay so much money to screen games around the world.

The value of fans and what they bring to the table should never be diminished, and that starts with addressing the attitude of many clubs, not all, to hiking ticket prices.