The Economic Case for Lowering Ticket Prices by Jake Cohen @JakeFCohen

Photo: Mike Hewitt/Getty Images

The 41,000 supporters who spend their hard-earned money to cheer on Chelsea at Stamford Bridge on Saturdays at three in the afternoon represent a tiny, tiny percentage of Chelsea’s global fanbase.

Of course, their importance to the club and its commercial success cannot be overstated, and we’ve all heard the call for ticket prices to be lowered to make football more affordable for everyone. But what rarely gets discussed is how not squeezing the fans quite so hard could also benefit clubs financially as well.

The loyal match-going supporters are a key part of the “Chelsea experience” to the millions of fans following the club from afar. The global fanbase takes their cues from those who are actually in the stadium, and therefore, the match-going fans exert a huge amount of influence over the general disposition of everyone else. For example, when fans bring signage to Stamford Bridge, be they negative (registering disapproval with a club decision, e.g. “Rafa out”) or positive (celebrating Chelsea players or a specific milestone), they will undoubtedly help shape the viewpoint of the other 99 percent plus of Chelsea fans, all of whom are watching at home or in pubs across the world.

Secondly, match-going fans naturally serve as an extension of the Chelsea name, and have a real effect on how the club is perceived globally. That’s not only to football fans, but existing and potential sponsors as well. In very recent seasons, fans of Manchester United, Liverpool and Arsenal have brought enormous signage and massive banners to Old Trafford, Anfield, and Emirates respectively to protest against ownership, personnel decisions, and/or what those fans perceive to be outrageous ticket prices. These images are then beamed all over the world in broadcasts and in the papers the following the day.

Naturally, these are not the images clubs want to project. Not only does it cast the club in a poor light, but it can also make sponsors nervous. You better believe Arsenal’s commercial team fielded calls from Gatorade, Emirates, and Citroen as a result of the protests, and the same goes for Liverpool and Thomas Cook for theirs. These aren’t sponsorship-ending incidents by any stretch, but if and when the match day environment trends negative, it does have an adverse impact on clubs and their ability to extract top sponsorship fees.

The last thing a club should want to do is alienate match-going supporters, and there is therefore an economic argument to invest in them.

If, for example, Chelsea were to reduce the cost of tickets by £15 across the board right now, it would cost the club around £7 million annually. Make no mistake, £7 million is not an insignificant amount for Chelsea to leave on the table — for perspective, that’s about what Nemanja Matic costs on the club an annual basis. That £7 million would represent about 10 percent of Chelsea’s current matchday revenue.

That said, it could also yield one of the best returns the club could see.

Photo: Tom Shaw/Getty Images

For a loyal supporter who attends every home match, that represents a savings of around £350 per year. £350 isn’t a life-changing sum, especially if you’re already in for over £1,000 for a season ticket plus all of the cup matches. That said, it’s hard to imaging that fans wouldn’t appreciate the gesture, and appreciative fans mean happier fans. Happier fans mean louder fans, and louder fans make for an even better matchday atmosphere for the club to play in.

As an example on the benefits of an extraordinary matchday atmosphere, do you like watching Borussia Dortmund? Of course you do. And why do you like Borussia Dortmund? Because their fans are amazing. Why are their fans amazing? Because they do stuff like this. Where do they find the time to do stuff like that? Well, their season tickets cost £145, so it’s not like they need to put in overtime at work to afford attending matches.

That much of football community thinks of BVB in a positive light isn’t just a nice feather in the cap. It is an enormous tangible benefit to the club, which earns over £100 million in commercial revenues each year, more than all but a small handful of clubs (Bayern, the two Spanish giants, the Manchester clubs, Chelsea, and PSG if you want to count the questionable QTA sponsorship). Sponsors naturally want to be associated with BVB. They want to be associated with Chelsea too (just look at the enormous Yokohama deal the club recently signed), but Chelsea could earn even more commercial revenue if it could project something close to a Westfalenstadion-like atmosphere across the world on matchdays.

Photo: Clive Rose/Getty Image

Additionally, it’s very reasonable to assume that fans who would now have a bit more disposable income might be able to afford more trips to away matches, which again, makes for a better atmosphere for the squad to play in, which could lead to better results on the pitch.

It’s also important to note that Chelsea and other major English clubs are spending heavily on their fans - they’re just not focusing on their home supporters.

Like just about every other global club trying to increase commercial revenues, Chelsea has been investing significant resources towards planting flags in emerging football markets, most notably in Southeast Asia and the United States.

For example, over the past five years, Chelsea has built training centres in South Korea, Japan, China, Hong Kong, Indonesia, Malaysia, Singapore, Thailand, Sabah, and in the Philippines. Many of these facilities have very distinctive blue pitches, which is about as overt a branding strategy as possible, but they definitely leave a lasting impression on these communities, which is exactly what Chelsea has set out to do.

Chelsea estimates that they will train 130,000 kids each year at these facilities, all of whom will ideally grow up as Chelsea fans. Building and staffing these facilities comes at a considerable expense, but it is a smart investment that will go a long way towards capturing market share in what will very likely prove to be lucrative markets in the future.

With all these resources being spent on growing and developing the fanbase abroad, it only makes sense for Chelsea to look inward a bit to ensure that the most visible and influential group in the fanbase is happy.

Unfortunately, owners overwhelmingly tend to pass on the costs of stadium development onto the fans in the form of higher ticket prices (look at Arsenal and Emirates Stadium) and personal seat licenses (otherwise known as debenture - look at Wembley or any NFL stadium that has undergone recent construction).

With Stamford Bridge set to be redeveloped at an estimated £500 million cost, look for Chelsea to start trying to recouping some of those costs immediately with a significant emphasis placed on adding a several thousand new corporate hospitality seats to the stadium.

Corporate hospitality seating generates much more revenue than general seating, and it is an essential part of stadium development used to recoup construction costs. However, the downside to lots of corporate hospitality seating is a more subdued matchday atmosphere. A smart way to mitigate the quieter corporate fans would be to offer student and young adult tickets at a considerably reduced rate. Young fans tend to bring a louder and more enthusiastic brand of support to the stadium and their positive contributions to the stadium atmosphere would likely more than offset the few million quid in revenue that Chelsea would be leaving on the table.

Commercial and broadcasting revenue are seeing incredible growth rates, and matchday revenue is becoming an ever-smaller percentage of overall revenue, even with redevelopment projects at Stamford Bridge, Anfield, Etihad Stadium, and elsewhere. Even if we completely discount all of the valid emotional and moral reasons for lower ticket prices, it makes sense strictly from a business perspective. In this era of modern football in which the bottom line is more important than ever, that should be enough for Chelsea to put serious consideration into making this forward-thinking move.


We Ain't Got No History's 2015/16 season preview was edited by Joe Tweeds and designed by Graham MacAree. If you've enjoyed the work of the authors who generously donated their time to this project, please share with your friends and consider supporting The Chelsea Foundation as a way of saying thank you.