Observer economics

Or rather, Observer reader economics.

Grossly overpaid footballers are a constant topic among sports lovers. They are resented for the impact their excessive salaries have had on admission charges;

You\’ve got the cause and effect arse over tip there.

It\’s the ability to charge high admission prices (plus all the other cash, TV, replica shirts etc) which drives up footballers wages. This is true opf any business where it\’s human capital that makes it all work: the cash is going to flow to those with the scarce item, the human capital. True of banking, true of the movies, true of football.

As the surrounding society has got richer, as the amount being spent on leisure increases even more rapidly, that cash flows as a river in spate through football clubs. And it\’s the footballers who get the bulk of it. Just as it\’s the film stars who get most of the money in the movie business: rarely indeed is it the investors.

So, no, high wages do not lead to high ticket prices. It\’s the ability to screw high ticket prices out of people that leads to the high wages.

16 comments on “Observer economics

  1. But isn’t it like a dam?

    The trickle of admission charges drives up wages until a point comes when the demand for wages becomes so great that the driving force becomes the wages and then the clubs have to start looking for more and more ways to keep the income stream going.

    As footballers get more then other footballers demand more to be one better because they are that little bit better. When salaries are in thousands then the next footballer will demand an extra thousand or two. When it’s into the millions, they won’t demand an extra thousand or two, but an extra million or two. Result? Exponential growth in wages.

    A bit like CEO bonus schemes. Each round of bonuses has to be higher than the oppositions’ and this happens no matter what is happening in real life (inflation, business success, etc).

  2. I know this is irrelevant, but I’ve never understood sports. I mean, playing them can be fun, if they’re not too much effort, or if they’re some kind of contact rough’n’tumble involving girls perhaps. But why watch other people doing them? I can’t get my head around that. It’s like, “I don’t exercise, so I compensate by watching other people exercise”. I mean, when these people are saying “We won the Cup”, don’t they actually mean, “I stood and watched some other people win the Cup”. What’s with the “we” thing?

    So I think my attitude is that anyone who buys these tickets is a few sandwiches short of a picnic, really, so no wonder they’re being ripped off. If they are.

  3. And thinking about it, what about the Olympics? Why are people buying tickets? It’s not like they watch these sports normally. How many times have you heard someone say, “God, I wish there were a local velodrome so I could watch other people ride bicycles!”. They don’t, do they?

    It seems to be a kind of “because it’s there” thing. Like, when Lady Diana Princess Of Hearts died and everyone went to London to participate in the making of large compost heaps in public places.

    Maybe we should regularly sacrifice a Royal, to give people something to be involved in. It would be much cheaper than building velodromes.

  4. Ian B,

    It seems to be a kind of “because it’s there” thing. Like, when Lady Diana Princess Of Hearts died and everyone went to London to participate in the making of large compost heaps in public places.

    Oh, very much so.

    I met a few people who have bought tickets and it’s partly about “the kids should see it”, but there’s also a social element to it (like many people go to art exhibitions to tell their friends they went).

    I was hoping to go because I do quite like athletics and fancied seeing the decathlon, and the seats for it were quite cheap. Didn’t get any, but having seen how long it’s going to take to get into the stadium (2 hours from Paddington with tube times and security), I’m not that disappointed.

  5. Ian B,

    People who watch sports fall in to two broad categories:

    1. I watch rugby union because I appreciate the skill levels and watching the competitive battle. I watch it on TV because I like the analytical side and I go to games because I enjoy the camaraderie and banter, often between fans from the opposing teams. Except when I watch Wasps, I used to live near the ground and go to their home games and I like to see them win, but not at the expense of watching a good game. Which brings me on to the second group…

    2. Having watched a bit of football in my time I conclude that a large majority of those who watch it regularly are just tribal and the game is a diversion, or at least something to bind the tribe. Again because I was close I watched Wycombe Wanderers for a while, before Wasps started playing there, and I have to say that even at that lowly level I always had a feeling that violence could break out at any time. I felt that if I was to applaud some skill from an opposition player I was likely to get thumped, at best.

    Its this tribalism that leads to fans claiming “we won the cup”.

  6. What IanB says certainly chimes with me. Watching sport may be mildly interesting at times but I’ve certainly never had any particular interest in which of the participants triumphed. Unless of course one of the participants is someone I’m connected to. Say a friend. But the connection would have to be pretty strong. A friend’s brother? possibly. A friend’s brother’s son? By that time I’ve lost interest altogether.

    So why do others find sport so engrossing?

    My best guess is the desire to be part of a ‘tribe’ is hardwired into human nature. Originally, probably, as a device to ensure the individual’s offspring were nurtured, even if the individual themselves perished. Much the same survival strategy as is pursued by many herd & pack animals. Just because humans have become ‘civilised’ doesn’t mean the drive has disappeared. it’s still there & because it’s very strong is easy to manipulate.
    Look at one of humanity’s most abiding hobbies, warfare. What motivates a man to freeze in the snow outside of Moscow, charge the cannon in the Crimea, walk into machine gun fire on the Somme? The only difference in outcome to the individual is who’s head will be stamped on the coinage. The common sentiment is the “it’ll all be over by Christmas” one. That after the battle the soldier can return to the hearth & home. The previous status quo. So if the desire is to remain in undisturbed tranquillity, why go to war in the first place?
    All down the ages, the military have used manipulation of the ‘tribal’ loyalty to provide armies. Take the recruit away from his home, family,community. Stick him in amongst strangers. Impose an arbitrary set of rules & harsh punishments for transgressing them. Is it any wonder the resulting overwhelming sense of insecurity induced causes the recruit to seek a ‘tribe’ to identify with? His squad. His regiment. A general, a leader a flag.
    Modern society’s a lot like an army of recruits, isn’t it? It’s become so large, impersonal & overwhelming there’s not much left of natural ‘tribes’ to identify with. Many of its rules & effects are arbitrary. It’s not one’s personal endeavour that decides whether one has a job & an income. It’s the ‘economy’. Where one lives & who one’s neighbours are is a result of all sorts of external pressures from housing planning to immigration policies. The individual
    is more & more isolated.
    Little wonder then folk look for something to identify with. A ‘tribe’ to be a member of. Sport provides it. You may be an insignificant nobody but ‘your’ man or ‘your’ team is triumphant. You feel more secure because of their success. And there’s a strange, quasi religious, element as well. That somehow *your* support will somehow influence the success of your champion. That wearing pyjamas in your team colours will somehow encourage the allseeing allknowing god’s of sporting chance to favour your cause. That their success will in some way influence the fates surrounding your own life.
    And drawing on this enormous desire to belong come all the industries to supply the need. Soccer clubs & fan clubs. Soap operas & that inexplicable recent phenomenon of TV, the X Factor. All encouraging the needy to identify, take sides, be part of.
    So what of people like IanB & myself who don’t buy into the great consensual illusion. Who have little drive to be part of anything much greater than our immediate circle?
    Generally we’re not good team players. Often we’re regarded a misfits. Likely we share the company of some of the worlds greatest leaders & greatest despots. And the greatest cowards. We produce more innovators & more idle layabouts. Fewer heroes & more psychopaths. To us, supporting a football team or tennis player would be like supporting a particular brand of detergent or individual train spotter.
    We’re just not interested in buying the product.

  7. Actually those of us who like sport like it for all sorts of reasons, one of which ( a minor one in my case ) may be some degree of tribal loyalty and it’s perfectly possible to identify with a team without hating your opponents, even in football. Other questions might arise from this, why are there so many people in the world who have difficulty coping with the concept of others having different interests from themselves ? Why, in particular, do they seem to find a liking for sport so incomprehensible ? Why do they have to subject it to psychoanalysis worthy of a Guardian article ?

  8. “Why, in particular, do they seem to find a liking for sport so incomprehensible ? Why do they have to subject it to psychoanalysis ……”

    Maybe because it’s an attempt to fathom out why footballers can command stratospheric wages with remarkably little public censure yet CEOs of major companies attract opprobrium for much smaller sums.

    “why are there so many people in the world who have difficulty coping with the concept of others having different interests from themselves ?”
    Indeed. Why does a visitor to one’s home think it perfectly natural to insist on the TV being put on to view “the big match”, despite being the only one present interested. What difference does it make watching it ‘live’ rather than the recorded event later? Why would anyone risk personal injury over which channel a pub TV’s tuned to?
    Damned if I’ve ever understood.

  9. Whether it’s bankers or footballers, what is it the left has against the workers getting a slice of the cake, I suppose they’d rather see the capitalists get it all.

  10. Sort of agree with all the comments above. But it’s still (even of you’re past it) good, even instructive, to see top sportsmen or even CEOs perform. Wales v Scotland was a cracker today.

  11. From listening to the BBC at night it has seemed to me that sports especially soccer are encouraged by the State. This as an opiate of the people. Maybe it is better for the government for you to scream for MU that scream at the local ethnics.
    Such tribalism has always been encouraged by the bosses — military or otherwise.

  12. The ticket prices are part of it but only a fraction. It is the ability of footballers to digitise (i.e. televise) the experience which is where the money really is.

    This is why Brad Pitt makes more money playing a doctor than the most talented medic makes actually doing doctoring. Because Brad Pitt can sell what he does to everyone on the planet for a small price, whereas a real doctor is constrained by his physical capacity to the number of patients he can treat.

    It turns out that people would rather watch the best footballers on the planet play football than their local team. This makes the best footballers on the planet very very rich. (The fact that the best footballers on the planet tend to play for our local teams can obscure this fact for us).

  13. Nicola’s certainly right about the way media can bring sport to the world but not sure if “people would rather watch the best footballers on the planet play football than their local team” really covers it.
    Talking with a Senegalese guy last week. He’s a staunch Manchester United supporter despite never having been north of the local bus station. His pal’s from Ghana & is just as enthusiastic about Arsenal. Why? It’s not as if they don’t have two ‘local’ teams that are world class. Barca & Madrid.
    The important factor seems to be to support a team that wins. English League is the one most televised so winning in that arena is more attractive. But is that where the best football is played? A lot of enthusiasts are of the opinion the Spanish game is better football.

    An answer to this riddle might explain why two very poor West Africans are channelling a sizeable portion of their income, via football shirts etc, to two UK PLC’s.

  14. SimonF said “I felt that if I was to applaud some skill from an opposition player I was likely to get thumped, at best.”

    For the past three years, I have attended the British Formula 1 Grand Prix at Silverstone, and have, particularly on the last two occasions, been surrounded by fellow McLaren supporters. On each occasion, we have all cheered and applauded the winner, despite him driving for “the opposition”.

    Perhaps F1 followers are more polite than soccer or rugby fans.

  15. Nicola.
    “It turns out that people would rather watch the best footballers on the planet play football than their local team.”

    That’s not true, check out how many football and cricket leagues there are. You’re mistaking numbers attending local games, inevitably smaller that big matches, with total numbers watching and playing.

Leave a Reply

Name and email are required. Your email address will not be published.