How Premier League clubs can change their business model
The Premier League is the most popular league in the world, and has been sold on paper and the most entertaining show on earth, however, due to inflation in the Premier League, clubs are all of a sudden caught in a “high risk, low return” world, as seen in the case of Everton. While some clubs may suffer on the field, many suffer off the field, with many Premier League clubs incurring huge losses should they fail to survive in the Premier League, and other clubs like Arsenal, who could continue to incur more and more losses if they don’t qualify for the Champions League (which looks increasing unlikely). The Premier League may be the most exciting league in the world, but for some, it can be a financial nightmare.
Cheaper ticket prices
Because ticket prices are one of the most controllable forms of revenue, clubs look to keep high prices to maximize revenue. A Premier League match, on average for each fan is £44.1 BP, the highest out of Europe’s top 5 leagues. Because football has a fairly inelastic demand (most fans are willing to watch football no matter the costs.), clubs are able to use that to their advantage to raise ticket prices in order to maximize profits. Clubs know that even if the team keeps on losing, fans will continue to attend the games because of how much they love the club, however, fewer and fewer fans are able to attend matches year by year as the price of football continues to rise. The way clubs are run in the Premier League is like a business, looking to maximize profits without accounting for the fans. A football club is very much different than a normal business and deserves to be run in a way that maximizes fan’s satisfaction first. Bayern Munich President, Uli Hoeness, once stated that,“We do not think the fans are like cows to be milked. Football has got to be for everybody. That’s the biggest difference between us and England.”West Ham United and Arsenal are examples of clubs that continue to charge high prices despite the fans not receiving great returns. Both teams promise their fans that they would be competing at the top level when moving to a new stadium, however, both sides for a while are yet to experience the success that they experienced in the past. The boards of the respective clubs made big promises to the fans of these clubs, however, the promises haven’t been implemented. Even when both clubs have been continuously underachieving, both clubs see no reason to reduce the extremely expensive ticket prices. Even though reducing ticket prices may reduce the amount of money the clubs have to spend in the transfer windows, the fans in the Premier League deserve to be treated far better than some money-making instruments, and deserve to be treated with far more priority.
A “Moneyball” strategy
Few Premier League teams implement a “moneyball” strategy in the transfer market and tend to exercise a huge risk of buying quality players for a fee that exceeds their market value. This can be seen with Spurs. Spurs are one of the best teams in the league, and most of their signings was from foreign leagues where the players they signed were relatively “undervalued.” Brighton & Hove Albion are another team that played moneyball in the summer and have received great returns with record signing Jose Izquierdo and £3m signing Pascal Gross. Even if clubs have the money to spend big on a quality player, they could resort to a more conservative transfer policy, which could reduce the ticket prices, a big source of revenue for Premier League clubs.
Premier League intervention
One of the possible ways the Premier League to create an ideal business model that’s “fan friendly” is to create a price ceiling for the sale of ticket prices. A price ceiling is the highest price that a ticket (in this case) can be sold. Price ceilings are usually implemented by the government to prevent certain goods from becoming extremely expensive. Because the Premier League is the “government” in this case, they could set a price ceiling to prevent clubs making lots of money from an unreasonable price of tickets. Creating a price ceiling would the increase the demand for fans to come watch the match, as prices would be back at a reasonable price. With the increase of TV revenues, Premier League clubs could start to lower ticket prices and still record similar figures.
“50+1 Rule”
In German football, there is a rule that states that in order to obtain a license to compete, a club must hold a majority to its voting rights, meaning that club members are the majority shareholders of the club. This rule prevents clubs from the influence of external investors, which could prevent the club from receiving more money from external investors, but also minimize the risk of the club being run poorly, as with the case of Arsenal and West Ham United. The owners of the following club have made a lot of “empty promises” in the past and today, and as a result, many of the fans have decided to boycott games to condemn the acts of Kroenke, Sullivan and Gold.
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