Thursday, January 12, 2006

Valley of Dreams?



The club, as is well-documented, is in the process of seeking planning permission to increase the capacity of the Valley from 27,000 to 31,000 and ultimately 40,000. Judging from Peter Varney's comments this should be celebrated. Wouldn't it be great, all other things being equal, to be able to accomodate more fans than say Spurs and Everton? Well yes, of course, but all other things are not equal, and more importantly it is an unnecessary and misguided development in my view.

When assessing the viability of a stadium expansion, there would seem to be three key issues to address. First, what is the current demand for seats, and how is it being met? Second, what are expectations for future demand and how can it be met? And third, what are the financial risks of proceeding with any expansion? I would like to address each in turn.

Charlton have 24-25,000 tickets available for home fans at each game. The vast majority of these are sold in advance in the form of season tickets (though notably season ticket sales have been falling recently). If there was clear excess demand for tickets, then the minority of tickets available for match-by-match sales should sell out quickly. Infact, the club is currently forced to resort to various promotions to sell just a few thousand tickets, and on more than one occasion has failed to sell out. The club is currently advertising a special offer for the vital Birmingham game which kicks off in just three days time. The attendance versus West Ham was 25,952 and less recently, the attendance versus Wigan was just 23,453. Even more surprisingly, the Chelsea home game did not sell out until just days before kick-off. If you cannot sell just a few thousand tickets for the Chelsea game weeks in advance, then it is clear to me the club does not have an excess demand problem currently.

Successful organisations are forward-looking, so perhaps the club is ignoring the lack of excess demand currently by anticipating excess demand in the future. Peter Varney has raised the point that the club's catchment area is poised for rapid population growth and hence the club should anticipate (and market to) the new entrants to the area. However he misses the point that football is perhaps a unique business. Most people that attend football matches do so because of some intangible personal link to the team and the sport, not because they expect to be entertained. Unlike films or plays, football matches are unpredictable but people attend because they care about the eventual outcome. For those of us that have been brought up supporting a team, this is of course its very essence. However to a neutral all of this is irrelevant, not least when the club is asking for £30+ for admission. Sport in general is not meaningful unless one cares about the outcome - often this emotional involvement can come from a financial involvement (witness the explosion in sports betting).

More importantly however, if Varney's theory holds then one should expect that those parts of the country which have experienced depopulation should have seen their local teams experience declines in attendances. Cities such as Manchester, Liverpool, Glasgow and Newcastle have all seen material decreases in population over recent decades, yet their football teams have, if anything, seen an increase in attendances. Indeed their slow decline can probably in part explain the increase due to the importance of passion implied above - during difficult times, the local club becomes the focal point for local pride. More generally it is notable that, within certain ranges, club attendances are remarkably stable. Ironically, Charlton is one of the few clubs that has seen material and consistent increases but these now seem to have plateaued and are based more upon our 'friendly atmosphere' and low ticket prices (relatively speaking), rather than a sudden awakening of passion for the club's fortunes. For further evidence of this phenomenon, you only have to witness our diabolical away support which is perhaps the worst in the Premiership.

Charlton is perhaps the ultimate 'community club' and it is something that all decent fans are proud of. However, they will never in the short or medium-term make a meaningful impact on attendances in the absence of material (and hugely unlikely) falls in admission prices. My passion for Charlton knows few bounds, but I wonder if I would myself baulk at attending every game if forced to pay ready cash at the turnstile instead of handing over a season-ticket, paid for in advance on a magic credit card. Then you have to ask yourself how Mr New-to-Greenwich is likely to weigh up the possibility of attending Charlton vs Portsmouth.

The third point relates to the financial implications of expansion. I am not privy to the ways the club intends to finance expansion, but assuming it involves some additional debt, this would seem imprudent given the football industry's notoriously poor visibility of future cashflows and revenues.

Indeed, there is an important point which I believe the board is missing entirely. Infact I think it is so vital that I wrote to Richard Murray about it in some length. In short, I believe that the limited capacity of the Valley is boosting attendances, and moreover that its expansion would cause a material decline in attendances.

I do not believe that Charlton have 20,000+ devoted fans. Instead we have perhaps 12-14,000 devoted fans (as evidenced by our typical Cup attendances) and a further 6-8,000 'fairweather' fans who feel obliged to purchase a season ticket to ensure they are able to attend the handful of games that are meaningful to them (Chelsea, Arsenal, Man U etc..). If the club goes ahead with its plan to add 4,000 and ultimately 13,000 additional seats, those 'fairweather' fans will be confident in their ability to purchase tickets for the glamour games, and will resist buying a season ticket. As a New York-based fan essentially 'wasting' £450 pa on a season ticket, it is fair to assume I wouldn't be renewing mine in the context of a stadium expansion.

There is an unfortunate confluence of events occurring currently which tell me that the club's stadium expansion could well lead to several unintended consequences. There is, in short, a combination of the club's poor form (especially at home) combined with a generalised apathy for football, set alongside a gradual deterioration in consumer confidence and all analysed within a rose-tinted view of the impact of demographic changes.

The Valley is almost the perfect compact Premiership stadium, and we are able to fill it on a fairly regular basis. Perhaps some improvements to the ageing Jimmy Seed Stand would improve the aesthetics, but given that it houses away fans, who cares? Instead I can visualise the team running out in a half-full but spanking new stadium (just like Coventry, Derby, Leicester, Wigan and Sunderland) but where the very absence of any atmosphere discourages those potential supporters from attending in the first place.

If it ain't broke, then why fix it?

10 Comments:

At 5:08 AM, Blogger BC Addick said...

I can see what you are saying and agree to a point. I remember going to the Valley for the second game after our return there. It was against Oxford and quite possibly the most drab game I have ever seen. I was having a drink in the horse and groom with my Dad before the game and could walk straight to the bar and get a pint! Now, that takes a good 30 minutes and you have spilt it by the time you manage to escape the bar area. Back then (and it wasnt that long ago) you would have laughed in the face of someone telling you we would get 26000 fans every league home game. The chaiman is a very clever man...target 10000 worked very well, then the east stand opened and we got 15000 every game and so on and so on. I think 40000 is a long way away but the next step of 31000 is very realistic and the sooner the better. The most important thing at the moment is to somehow increase the atmosphere there...good performances and some crowd lifters like robinson and kinsella are needed. thanks for the good read.

 
At 8:54 AM, Anonymous Anonymous said...

Even if we only use the extra capacity for big games it will be worthwhile. It will be financed by long-term loans and have little impact on Curb's spending power. I don't get why you are so anti.

 
At 9:06 AM, Anonymous g carter said...

Its a good job you weren't involved in Target 10000 isnt it, we wouldnt be where we are now!!

 
At 9:09 AM, Blogger Wyn Grant said...

You make some good points, but if we can't drive up incomes from gate money our long-term prospects in the Premiership are not good. This can be done incrementally, building the East Stand upper first. There is, incidentally, some cash in hand (about £3m) excluding transfer money.

 
At 11:29 AM, Anonymous Anonymous said...

The problem involved in selling out every game is not one of demand, as you outline in the first few paragraphs, but primarily one of single seats, I believe. We haven't sold out completely, even for supposed big draws, because it is hard to market single seats dotted around the ground when people want to bring mates and partners, kids and the like. Very few go by themselves. A bigger ground (incrementally moving up as demand increases) and precision seat planning systems will sell the majority of seats, I am sure. And, on a related not, initiatives must be implemented so that those that begin as Happy Clappy Premiership watchers reach that defining moment, as we all have, when they think to themselves: "God I love this Club!"

Up the Addicks!

 
At 12:23 PM, Blogger noel said...

I have a season ticket. I also now have 3 kids. They are mustard keen to go to games, but no way can I afford it. So I find it more difficult to get to games myself as a consequence. Next season it's unlikely that I'll renew precisely for the reason that I'm confident that I'll be able to pick up tkts when I want them (and take the kids to cheaper games eg Orient). So in many ways I agree with NY. I'd far rather sit in a full stadium, so if the club has the gumption to drop prices to fill the seats than it could work, although I doubt this would happen. Selling 40000 seats at £16 raises the same revenue as 26000 at £25. 40000 fans would buy more shirts and duvet covers etc and have spin-offs in sponsorship deals, attracting players, help to lose the 'little Charlton' tag etc. Incidently, am I alone in enjoying the games against non-glamour sides much more than the recent processions vs the big clubs?.

 
At 12:26 PM, Blogger New York Addick said...

I don't think we would sell out a 40,000 stadium for the big games anymore. The novelty of Premiership football is wearing off, admission prices are too high and the League is not competitive. Target 10,000 etc.. were good initiatives but in my view they succeeded because the club was never as small as the early-1990s attendances suggested, but it is now not as big as our 25,000+ attendances suggest.

 
At 12:30 PM, Blogger noel said...

it's a right old scrum getting out of the ground as it is...imagine another 14,000!

 
At 12:42 PM, Blogger New York Addick said...

Between myself, my Dad and some friends, we own a group of approximately ten season tickets in the West Stand. The idea was to take various friends, relatives, clients, work colleagues and even shock horror, friends who might support the opposition (I know how much Varney hates that one). Anyhow, we have all found it increasingly difficult to persuade people to attend, even for nothing.

Given the hype around the Premiership, it's surprisingly hard to persuade people to come along, even when you thrust a free ticket in front of them. The problem is that going to games, unless you live very locally, requires guests to give up their entire Saturday afternoon with all the related hassles of parking or getting onto packed trains. For devoted fans, this is a small price to pay for endulging in a lifelong passion, but it's a step too far for many neutrals. Ask them to pay £30 for the pleasure, and suddenly a shopping trip with the wife is strangely appealing.

However, and here is my point, whilst the Valley remains small, we will probably keep all ten season tickets, even if they sometimes go to waste, because we are willing to pay up for the option of having them available when we need them. However the expansion of the stadium could well see all ten given up. With the near-guarantee of as many tickets as we need for every game that we want to attend (which will work out at far fewer than ten per game). I really don't think the club has thought about this issue and could be shocked at how low the attendances could fall for the lower-profile games. The Charlton vs Blackburn attendance in the Carling Cup (14,093) should have been a wake-up call.

As far as the bigger games go moreover, in recent seasons these have ironically been some of the least enjoyable fixtures, as we are invariably outclassed and have failed to secure so much as a draw against Chelsea/Man U/Arsenal since Boxing Day 2003.

 
At 2:51 PM, Blogger Kappacino Kid said...

two factos that you have not commented upon, I think, one being positive towards the filling of the capacity, is if we were to give over capacity to visiting fans, I thik we could then reach the magic 40,000 for the 3 or 4 big games a season - will that give sufficient payback & will there be crowd security issues. On the negative, I don't know how many 5 year season ticket holders there are but if they make up a reasonable share of the valley capacity then it will be interesting at the end of this season to see how many do not renew to a season ticket as the scheme comes to a close in May. The relatively small drop in season ticket holders may well climb rapidly in May.

 

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