Tuesday 24 October 2017

Fans will vote with their feet on pricing

John Greene

John Greene

THE country's three main sporting organisations have been criticised this summer over ticket pricing. At a time of economic strife, the cost of attending games under the jurisdiction of the GAA, the FAI and the IRFU remains enormously contentious.

While all three offer concessionary rates to many of their fixtures, a quick look at general admission prices to some main events easily explains the disquiet. A stand ticket for this year's All-Ireland finals costs €70, while the IRFU's decision to charge €100 each for the visits of South Africa and New Zealand in November provoked a furious reaction. The argument over what is a fair price to charge -- and pay -- into a sporting event is not exclusive to Ireland. And it's not solely born of the times in which we live either.

The difficulty the world over for organising bodies is striking the right balance, finding that fair price. Take the FAI, for instance. The Republic of Ireland are about to embark on another qualifying campaign under Giovanni Trapattoni and general stand prices for the first home game against Andorra on Tuesday week vary from €50 to €70.

In support of that price, the FAI can point to the comfort and excitement of a new stadium and an optimism after the events in Paris last spring that Ireland can qualify for the 2012 European Championships. The FAI can also rely on a hardcore of support which will follow the national team in almost any circumstance.

Against that, however, the association faces a battle against the view that the team under Trapattoni (pictured) is difficult to watch and that international football in general is a poor relation to the Champions League, and even the Premier League.

And while the GAA's pricing structure compares favourably to that of the FAI and the IRFU, it's relative. Today, for example, will be Kildare's eighth championship outing and Down's seventh, so the cheaper cost of entry is more than cancelled out by the number of times supporters have had to pay out. Stand tickets for today cost €45 for adults.

The debate over how much to charge supporters for tickets is an age-old one for organising bodies, and at its crudest the most fundamental guiding principle for them has been supply and demand. Simple market forces have dictated the cost of tickets and the upward price spiral has reflected a global trend of increased attendances at sporting fixtures over several decades.

For the first time in the modern era, though, attendances are coming under real pressure during this global downturn and with that has come the first challenge to organising bodies to reconsider their approach to pricing.

Despite the proliferation in revenues during the last 20 years from sponsorship and broadcast rights, gate receipts in Europe and North America are still the primary source of income for the major sports.

In fact, a report published recently by PricewaterhouseCoopers shows that total global revenues in the sports market last year was $114billion, 39 per cent of which was paid through the turnstiles, with media rights at 20 per cent, sponsorship at 26 per cent and merchandising accounting for the balance.

Given that ticket pricing is hugely dependent on disposable income, the report also noted a downward pressure on attendances worldwide caused by economic conditions. Last year, attendances at Major League baseball fell by almost seven per cent, and by just over one per cent in the NFL. Basketball and hockey attendances are also down, somewhere in the region of two per cent.

The key point is that in spite of this fall-off -- which has also been reflected in Ireland this year -- gate receipts will continue to be the revenue cornerstone, ahead of media rights and sponsorship. Germany's Bundesliga -- where ticket prices have consistently been the lowest of the major European leagues -- averaged attendances of 42,000 last season, compared to about 34,000 in the Premier League and 28,000 in Spain's Primera Liga. At a time when clubs have become hugely debt-burdened in England, Spain, Italy and elsewhere, the German model of local social ownership and a more equitable distribution of revenues from media rights has ensured modern stadia and a competitive league which has kept fans on board.

And while German clubs were not a force in European competition during the boom times because they could not match the spending of others, there are signs that balance is shifting. A patient policy, focusing on keeping the product attractive and affordable to those who most want to see it, can have its rewards.

Attending live sport is an integral part of many cultures, and most sporting bodies factor in gate receipts in their budgeting plans. The three big ones here are no different. The challenge for them, like their counterparts in the rest of Europe and North America, is striking the right balance between selling seats at premium prices and boosting the number of people attending.

The PwC report highlights new approaches towards achieving this, including a move in the US towards dynamic ticket pricing, similar to that used by airlines. Ticket prices for games change depending on the seats available -- the more seats there are, the cheaper the ticket.

Given the importance of gate receipts, it's no longer simply a case of 'build it and they will come'. They will come alright, but only if the price is right.

Sunday Independent

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