The Economist Defends FSG, Accuses Liverpool Fans Of “Socialism”

By James Patrick Gordon  |  February 10, 2016 | 3:38pm
Photo by Clive Rose/Getty
Soccer News Liverpool

In a piece published three years ago about Sepp Blatter on Grantland, Brian Phillips wrote:

A sport is not a business. You can make a business out of a sport, in the same way you can make a business out of sex or alpaca hair or tomatoes, but you’ll be selling something that’s tangential to the sport itself. […] Sport generates economic activity, but sport isn’t inherently economic. Sport is just some people playing a game.

With that in mind, The Economist published an article yesterday defending the recently-announced increased ticket prices at Liverpool.

The author starts by invoking the club’s history in a… less than flattering way.

In the early 1980s the Reds were the best team in Europe. It considers itself one of English football’s behemoths. Yet it has won just one cup and averaged sixth in the league in the past five seasons. In that time, a disastrous, debt-laden American takeover took [the club] to the brink of bankruptcy. This hurts for a club whose identity is built on its working-class roots in a downtrodden city that has had little else to cheer about. Fans take pride in the principles of their former manager and architect, Bill Shankly. He summed up his philosophy as “Everyone working for the same goal and everybody having a share in the rewards”.

But such socialist sentiment has no place in modern football. So it is unsurprising that a concerted uprising against rising ticket prices—the first English football has seen for years—is taking place at Anfield, Liverpool’s famous home.

(Emphasis ours.)

The article goes on to cape for Liverpool owners Fenway Sports Group by saying their investment in Anfield’s redevelopment entitles them to raise prices in order to both recoup their losses and remain competitive— in business and sporting capacities— with the likes of Manchester United and Arsenal. It also points out the likely inflation in transfer fees and player wages that will accompany the new TV rights deal that kicks in next season, a point Arsène Wenger made last week. The piece closes by dismissing criticism of the price increases by insisting the club is charging what the market will bear, that FSG are fully entitled to maximize profits however they see fit and that, if the fans are fortunate, they’ll be treated to better football as a consequence.

Needless to say, the piece was generally not well-received.

So, there are a few problems with the article.

The author spends too much time defending FSG by disparaging both the club’s fans and the city which it calls home. “[W]orking-class roots in a downtrodden city that has had little else to cheer about” reads like the kind of smarmy neoliberal negging that seems more at home in a GOP strategy conference. Framing Liverpool fans as economically disadvantaged and clinging to some halcyon past— also known as the time before Margaret Thatcher set about dismantling the welfare state— is an effective way of casting them as short-sided and unreasonable, and that FSG (and, by implication, anyone who champions free market economics above anything else) are the only rational actors in this conflict. For anyone who leans even modestly left on the political spectrum— or, indeed, hails from Liverpool— this play is all too familiar.

The piece also makes some fundamental assumptions about the economics of modern football that don’t necessarily hold up to scrutiny.

First, the article proceeds as if matchday income is the primary revenue driver for Premier League clubs, which simply isn’t true. Even if you ignore the massive broadcast contracts, most clubs in the Premiership make more money from commercial revenue than from gate and matchday income. Outside of England the difference is even more pronounced; Bundesliga clubs maintain modest ticket prices by maximizing sponsorship deals to make up the difference, while Real Madrid can afford to keep tickets for their home fixture against Athletic Bilbao this Saturday at about ?€35 because they know they have, among other things, a ?€140 million per year deal with Adidas in their back pockets. So the article’s presumption that matchday income is every club’s bread and butter isn’t exactly true.

Second, English clubs do make most of their money from the league’s fat TV contracts, reflecting the Premier League’s status as one of the world’s most popular broadcast properties. There’s a widely-held perception that one of the things that makes the Premier League such compelling television is the unique atmosphere at English grounds. Said atmosphere is also widely perceived to be in decline and, while correlation isn’t causation, there is a growing sense that the steady rise in ticket prices in the Premier League era is tied to the decline in fan atmosphere. If you buy that, it’s not a huge leap to say that raising prices more and chasing away the fans that make English football such a visceral experience will eventually have a negative impact on the games as a television product. To defend raising prices is to, essentially, bet that the link between prices and atmosphere is overblown and that people will still watch on television even if they start to sound like tennis matches. That’s a pretty big bet.

Third, the article operates under the assumption that football clubs exist primarily as a profit-generating venture for their owners, an assumption that may not necessarily be true. David Goldblatt, a sociologist and sportswriter who penned one of the definitive texts on the socio-economics of English football in his book The Game Of Our Lives, wrote last year that football clubs aren’t really about making money.

If they were, there would be at least a modicum of support for salary controls, but there isn’t. Unlike other economic sectors, most owners are out not to maximize profit but to maximize utility — with utility measured in the quality of soccer served up and the benefits in media coverage, social status and networking that accrue. There are rare exceptions, like the Glazers at Manchester United, and some investors may buy soccer clubs in the hope that they can sell them later to a vanity investor at a substantial profit. But the royal houses of Abu Dhabi and Qatar bought Manchester City and Paris Saint-German [sic] not as a rational business investments but as instruments of soft power.

It may be that Fenway Sports Group are looking to make a profit from their investment in Liverpool, but to say that this is just how modern football works paints an incomplete picture of the economic and political landscape of the game.

The Economist does make one salient point when they say that Premier League clubs “… will never voluntarily disadvantage themselves by cutting ticket prices significantly. So unless they agree a league-wide pricing protocol, they will be more influenced by what the market will bear.” It’s becoming increasingly clear that leaving clubs to their own devices with regards to ticket prices is creating havoc by pricing their most loyal supporters out and establishing scaffolds of inequality throughout English football. It may be that the solution is a league-wide cap on ticket prices. The consensus among fans seems to be that £30 is a good maximum cap across the league. That seems reasonable to me, but I suppose I’m biased. Yet even if an agreed-upon cap splits the difference between the linked survey and, say, Liverpool’s proposed price ceiling of £77 next season (which will be the highest in the league), that would result in a maximum price of roughly £54 across the board, which would still be an improvement.

Regardless of how the ticket price debate plays out, all parties will have to come to some equitable solution. And indeed, with the club’s announcement earlier today that walks back most of the proposals from last week, it seems Liverpool are a lot more willing to play ball and work with the supporters than The Economist thinks is necessary. The publication, famous for not giving individual authors a byline in order to present a uniform voice, insists that passing increased costs onto supporters is a fait accompli, and that it’s up to fans to either pay the price or… not. This neoliberal reading of the sport— taking the Melian Dialogue approach to socio-economics by saying the rich do what they can and the poor suffer what they must— is, among other things, smug and presumptive, and fails to understand both the economics of English football and its role as a cultural institution. Such libertarian sentiment has no place in modern football.

 
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