How will the increased cost of living affect the EFL and non-League clubs? My prediction is that we will see a big leap towards better and more efficient CRM and ticketing solutions.
By Carl-Erik Michalsen Moberg, CEO of TicketCo
As a CEO of a ticketing company specialising in spectator sports, I have a keen understanding of the financial challenges facing football clubs today. With the cost of living crisis in full swing this winter, energy bills have doubled or tripled, putting pressure on the margins for every club in the pyramid.
The cost of running floodlights, pitch maintenance lights and other energy-intensive elements of stadium operations is a significant challenge for clubs, and the clubs are grappling with the delicate balance of making savings on floodlight usage while trying to maintain attendances and revenue. Moving to earlier kick-off times may offset electricity costs, but there are concerns that this will result in a reduction of hospitality revenue.
The cost of energy is also not just limited to matchdays, but a daily expense for the club, including pitch maintenance and operations. With energy bills more than doubling for some clubs, finding a solution to this cost of living crisis is a top priority.
At the end of the day, the success of a club relies on bringing in fans to the stadium. While finding ways to reduce energy costs is important, it's crucial not to disrupt the matchday experience and negatively impact attendances.
Luckily, we know that the event industry in general and spectator sports in particular has proven to be resilient towards recessions. Film, theatre and festivals flourished during the UK recession in 2008, with Britons spending record amounts on tickets.
Furthermore, several academic studies and research papers have examined the relationship between spectator sports and economic recessions, i.e. "The Impact of the 2008 Financial Crisis on the Sports Industry" by Seung-Yeon Lee and Tae-Hee Kim (Journal of Sport Management, 2013) and "The Determinants of Sports Sponsorship during Economic Downturns: An Empirical Study" by M. Erol, R. Kiraci, and I. Dogan (International Journal of Sport Management, Tourism and Hospitality, 2016).
These studies used a range of methodologies, including regression analysis, surveys, and case studies, to explore the relationship between spectator sports and economic recessions.
The results of these studies suggest that while recessions may have some impact on certain aspects of the sports industry, such as sponsorship, the overall demand for sports remains relatively resilient during economic downturns.
Based on this, I’m not too worried about the times ahead. They may hurt, but they will also boost innovation.
The pandemic generalised remote work tools and video calls. Climate change has amplified both the prevalence of renewable energy and disaster response technology such as drones for aerial surveillance and damage assessment.
My prediction is that the cost of living crisis now will encourage marketing, CRM and ticketing suppliers to develop even more efficient technology to help their clients become more coherent, and that this will benefit the clubs both short term and long term.
They are already tracking their players’ movements and performances through various technologies. There is no reason to be less tech-adoptive off the pitch.
As the industry continues to navigate this difficult time, I remain optimistic that football will endure and continue to bring joy to fans around the world.
Mark your calendar for our upcoming webinar on April 20th at 9-9:30am, where we will delve deeper into this topic and provide valuable insights. Don't miss out on this opportunity, register here!