Wednesday 4 February 2009

Season Tickets 2009-10

It's that time of year, when football clubs begin to give thought to their pricing structure for the forthcoming season. This is a critical judgement call and involves maximising revenues by getting the optimum balance between bums-on-seats and actual prices.

Under Peter Varney's leadership, I believe Charlton Athletic excelled at this. Of course, it's not hard when you you are playing in the Premier League with a capacity of only 27,000. The drop into the Championship in the last two seasons presented a new challenge in terms of maintaining numbers but the club rose to it with the unique offer of a free season ticket in the following year if we gained promotion. That was a bold move but one that was very sensible, in that the huge increase in Sky revenues for rejoining the top flight would more than have accounted for the cost of funding it. As a result, season ticket numbers have held up remarkably well at c 17,000 for this year and nearer 18,000 for last.

Relegation in May will give Steve Waggott another major headache to contend with. The quality of the product this season has been about as poor as it can get and next season will bring poorer quality opposition, irrespective of how we are playing. In addition to this, the club's increasing tendency to discount match-to-match ticket sales has also built up a head of steam in terms of resentment around having paid upfront. I haven't done the maths here but I don't believe a season ticket would have saved you anything over buying game by game this season as has traditionally been the case.

The promise of a free season ticket should we be promoted to the Championship is also unlikely to be an option - the additional funds available from re-joining the Championship wouldn't cover the cost of the promotion and, let's face it, the confidence in it coming to pass will be significantly lower than in either of the two previous seasons. We also need to consider the current plight of the economy and the added pressure that will accompany the "will I, won't I" question. So, Mr Waggott has his work cut out and will need some lateral thinking if we are to maintain a modest 10,000 season ticket holders.

In terms of what we might be expected to pay, I have had a quick look at Leicester (relegated last year and with similar support to oursleves) and Millwall, Orient and Southend, as three local sides by way of a comparison.

Leicester have actually got their prices for next season published already and the good news for Foxes fans is that that they are offering decent discounts across the board and we should remember that this will likely be for Championship football; adult prices start from £275 and go up to £450; U18's from £125 and seniors from £215. Presumably Milan Mandaric is working on the reduction being more than offset by the increased interest from being promoted.

Based upon the price of their half-season ticket, Millwall's minimum adult price is a surprisingly high £360 and you can pay up to £480; juniors are from £110 and seniors from £180 and they have intermediate ages with intermediate prices, which seems unecessarily complicated and open to widespread abuse (especially there).

I then looked at the O's and thought I might find some comfort here. Afraid not - they charge from £320 for adults, £210 for "concessions," although their Family pricing structure discounts for additional adults and children if you block book. Their prices are for all parts of the ground, so a seat on the side is probably better value.

So to Southend and what I was hoping would be bargain basement football. Big shock here too - adults here are paying £450, seniors £280 and juniors £250. Like Orient, this is for any stand, but there's virtually no difference at Roots Hall - they're all diabolical. No wonder they play in front of pitifully small gates. To be fair to them, they also offer a Family pricing structure, so presumably many of their regulars will pay less than the single season ticket prices.

In conclusion, it will be difficult for Steve Waggott to justify reductions on this season's prices. For starters the club is desperate for the revenue and you could argue that this year's pricing will make us competitively priced in League One next season. Therefore, I think we will need to offer additional incentives in maximise numbers of those who renew. Throwing in home Cup matches are an obvious one, and are unlikely to cost that much as our chances of a cup run will be that much smaller and the interest for these games is likely to involve very small crowds if it's pay-on-the day.

The club might also be giving consideration to including the use of club bars and lounges as well as subscriptions for CAFC TV and Valley Express. I believe some of the lounges are already over-subscribed with paying Customers but they should look at throwing this in none-the-less. At the end of the day it would operate like a pub and when they're full, they're full and Customers will go elsewhere to get served quicker. We have to maximise takings from Customers using these facilties

CAFC TV was launched to encouraging noises from fans in terms of it's pricing policy, but the quality of service has been disappointing and it might pay to throw it in next year, especially as we're unlikely to be getting any wider radio coverage. The number of those willing to pay in future for this service might benefit from a wider non-paying audience next year, especially if we have something worth listening to and replaying.

That leaves us with Valley Express and I suspect it could be looking untenable on dwindling numbers. Perhaps throwing it in at a discounted price might beef up the numbers to keep it running from it's larger pick-up points.

There, food for thought.

12 comments:

  1. My "money" is on a switch back to the "5 year season ticket offer" at a reduced price that if we get promoted back to the Championship and more , would be a great deal and have the commitment of guaranteed support. Not sure what would happen in the event of the Club going into administration or being sold.

    Yes, times are hard, but if is shown to be "good value", I think you would get a good take-up of such an offer. Also it gives the Club that extra revenue from the off to build for next season.

    We need something "inventive" to keep the interest of the supporters, some of the things you have suggested are also good ideas.

    As a season ticket holder I agree that our tickets for the last 2 years have not been good value with all the price reductions they offer throughout the season for matchdays only and this year the system to upgrade a season ticket on the day are a joke and I did raise this matter up with Steve Sutherland, but to no avail.

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  3. This is an interesting topic and one it would pay Charlton to think about very carefully. The most obvious question to ask is how would demand for season tickets next season rise and fall with the price, i.e. what is what economists call the elasticity of demand. In theory, the optimal pricing strategy, as you imply, is the one that finds the right balance and hence maximises revenues. Of course, the first problem Charlton face in trying to find this balance is that they simply don’t know the demand curve, i.e. what the demand for season tickets might be across a range of possible prices. They’ll simply have to guess and in doing so could probably do a lot worse than take this season’s prices and cut them by, say, 10%. That will satisfy the customer need to have the lower quality product reflected in the price whilst, for what it is worth, providing what would appear to be good value for money relative to the alternatives you have looked at.

    However, in terms of the scope for pricing strategy to increase revenues there is another avenue the Club should explore. The fact is that not all fans (customers) have the same price sensitivity. For some, perhaps those struggling to afford to buy a ticket in the first place, the price will make all the difference, i.e. will work as on “on/off” switch. For others, the price won’t be a big issue, either because they simply “have” to buy a season ticket come what way (i.e. they are what some might call fanatics) or because their disposable income is such that a few hundred pounds one way or the other is not the key factor in their decision. The challenge is to develop a pricing policy that both “discounts” for those that will only buy if the price is “low”, but which doesn’t sell more cheaply than necessary to those who are less price sensitive. This is a problem that many businesses face, software companies being a very good example, and for Football Clubs what it means as a minimum is differential seat pricing within the ground. Charlton clearly already understand this because last season they began to price the central blocks within the West Stand, for example, at a premium. By contrast, neither Southend nor Orient appear to have thought this through yet; however shoddy their grounds there will be some seats for which some fans would pay a premium price and until this is understood revenues are being lost. The question for Charlton is how much further can the Club take this idea? Following on from your suggestion, but perhaps refining it a little, it may make sense to develop a number of Premium packages which would include the “best” seats, some kind of “hospitality” option (which may be no more than access to a bar or an option to book a table for lunch), a complementary programme or anything else that may seem attractive and, critically, a little “exclusive”. For these Premium packages, ticket prices might actually be raised. You’d need a fancy title like “Club Charlton” or “Presidents Club”, for example, and there might then be variants of this, differentiated by price. Evidence in other industries suggests that provision of the premium service costs a lot less than the additional revenue and, in a sense, it’s a bit of a con, for example Club Wembley, but providing there are enough price insensitive customers and the pricing is right, it works.

    At the other end of the spectrum, it might also make sense to have some genuinely low cost deals, say in the Lower Tier of the North Stand, where the headline price suggests “bargain”. It would be essential, of course, that this comes with no frills (and long queues for a pint!!) to confirm that there is no “fat” in the price and, most importantly, to make those buying the more expensive seats feel they are getting good value for money.

    Another obvious strategy is to continue to offer young children, i.e. those who will come with an adult, a very cheap deal. Not only does this build long-term support, but Dad won’t feel so bad about what he is paying if his two sons are getting a terrific bargain.

    Finally, if the Club go down this route of greater price differentiation based on seat location and “extras” whilst offering “rock bottom” prices to the highly price sensitive, it would make sense to have a much longer period during which existing season ticket holders who renew can then switch their seats and to make this process easier. I will be renewing my season ticket come what may and, if given the right incentive and were it made easy, might even pay more for a “better” seat and a bit of TLC (Tender Loving Care). I have friends who will definitely not renew unless the price falls markedly, but may be prepared to move seats, if necessary. If Steve Waggot can figure out how to maximise revenues from these two constituencies and “hook” the family man, he’ll have gone a long way to minimising the serious damage to season ticket revenues that will follow the now inevitable relegation to Division One.

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  4. Sensible comments there, but I doubt many will renew unless the price drops significantly.

    Never mind, even if we manage to sell 5000 season tickets, they'll still probably publish each gate as 20,000 - which will include all tickets sold plus anyone who's thought about buying a ticket!

    Cheers.

    Woody

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  5. Kim - thanks for this. Your idea re five years is a good one, although in the current market, five years could be a hard sell! A two or three year deal might make more sense, especially if the last year was seriously discounted e.g. 40% off for the second year on a two-year deal and 60% off the third year on a three-year ticket? Dave.

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  6. KHA - I'm not advocating we peg our prices here. I'd much rather see us with many more season ticket holders payable a decent bit less. I just can't see them risking too big an incentive here in case they fail to attract enough floaters and are left with the "come-what-may" brigade (me included), from whom they can probably leverage more revenue. That's why I think they are more likely to be looking at sweetners, rather than big discounts on what are, after all, very reasonale prices today. Dave.

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  7. Anon - thanks for the detailed thoughts, with which I agree entirely. What would really fire my imagination, would be a £150 standing season ticket on the Lower North, but that's a whole different issue and one no-one in the game has the balls to tackle. Dave.

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  8. Woody - I appreciate the cynicism that has built up around the published attendances this season, but if we have only 5000 season ticket holders next season, I promise you gates of less than 10,000 will be published. It is not in the clubs financial interests to publish false figures. There may well be a difference this season between paying Customers and actual attendees, but that will fall through the floor next season. Dave.

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  9. We were having a debate about this subject at the last home game and our group of 10 (all long term season ticket holders for 30 years plus)decided that prices would have to come down by 50% for us all to renew.

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  10. Terry - That's frightening if you believe they will all follow through with that and that they might be representative. A lot of us talk tough but renew anyway! Dave.

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  11. Ultimately the question of price is going to be an individual decision. However the bigger question is whether the basics are right within the club. Even giving away tickets won't work if the team continue to play so poorly (and in certain cases seem oblivious to the fact). It's one thing to be struggling in the Premiership, but at the moment everyone is actually relieved that cardiff is off. So why would you pay when the only outcome will be misery? Waggott has to go, last season was poor but since he has arrived it has gone from underacheievement to farce. Failure to adequately back Pardew or remove him, then the ludicrous non-appointment of Parkinson.

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  12. In talking about season tickets with a Spurs ticket holder, he gets two cup games included in his price. His is a lot more expensive in the first place, but for us next season including some cup games could be an incentive. Regarding having a no frills, bargain basement lower north...as it's where I am anyway, I don't agree with the idea...I personally don't want to watch the game from the sides, the only change I might make is to go upstairs! Including the Express. As there's no bus from my area (Essex/Cambridgeshire border), that holds no incentive for me either.

    They do need to address the differential between a season ticket and discounted match to match tickets. A discounted child's ticket with a full paying adult, that is a way other clubs have gone. Our tickets already seem lower than others of a similar ilk. Primarily the only way of getting 'bums on seats' is the team playing decent football and winning games...until that happens, to some, no amount of discounting will help.

    PS. I will be renewing my season ticket...as I want Charlton to continue.

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Go on, you know you want to....