Wembley Stadium Pricing Study
Ticket Pricing Strategy for the new Wembley Stadium
1 Introduction
OBJECTIVE To maximise profits from ticket sales at Wembley Stadium
KEY ASSUMPTIONS 1. Wembley has a monopoly on certain types of match
2. Wembley is run by profit maximising managers selling tickets to utility maximising buyers
STRATEGY Set prices for seats as close to the willingness to pay as possible using price discrimination
KEY CHOICES What type of seating to sell and at what price?
2 Scope
This strategy is limited to the following football matches:
England home matches competitive and friendly
Major cup semi-finals and final
Lower league play-off finals
Wembley has a monopoly on these matches due to Football Association (FA) policy2. Theory states that Wembley should charge as close to the willingness to pay of its customers as possible to maximise its profits1. The ability to do this depends on demand and the ability to price discriminate between market segments.
3 Absolute Demand
Absolute demand for tickets will be high due to several factors:
Football is England 's national sport
Watching live matches is popular
Wembley Stadium is the home of football ' with a long and distinguished history
There is good evidence for assuming high demand:
The last three competitive England home games were sold-out2
Attendance figures for club matches are consistently high3
Recent cup finals at Cardiff Millennium Stadium were sold-out4
Actual demand varies between market segments but can be found from market research, e.g. membership schemes and studying events at similar grounds.
4 Market Segmentation
The table below shows the range of customers that buy tickets for football matches. Elasticity of demand is shown for each category and explained below:
Market Segments Elasticity of Demand Reason for Elasticity
1 Adults High Loyal but can choose to watch on TV instead Children High Guardians are paying and have other options Families
1 Introduction
OBJECTIVE To maximise profits from ticket sales at Wembley Stadium
KEY ASSUMPTIONS 1. Wembley has a monopoly on certain types of match
2. Wembley is run by profit maximising managers selling tickets to utility maximising buyers
STRATEGY Set prices for seats as close to the willingness to pay as possible using price discrimination
KEY CHOICES What type of seating to sell and at what price?
2 Scope
This strategy is limited to the following football matches:
England home matches competitive and friendly
Major cup semi-finals and final
Lower league play-off finals
Wembley has a monopoly on these matches due to Football Association (FA) policy2. Theory states that Wembley should charge as close to the willingness to pay of its customers as possible to maximise its profits1. The ability to do this depends on demand and the ability to price discriminate between market segments.
3 Absolute Demand
Absolute demand for tickets will be high due to several factors:
Football is England 's national sport
Watching live matches is popular
Wembley Stadium is the home of football ' with a long and distinguished history
There is good evidence for assuming high demand:
The last three competitive England home games were sold-out2
Attendance figures for club matches are consistently high3
Recent cup finals at Cardiff Millennium Stadium were sold-out4
Actual demand varies between market segments but can be found from market research, e.g. membership schemes and studying events at similar grounds.
4 Market Segmentation
The table below shows the range of customers that buy tickets for football matches. Elasticity of demand is shown for each category and explained below:
Market Segments Elasticity of Demand Reason for Elasticity
1 Adults High Loyal but can choose to watch on TV instead Children High Guardians are paying and have other options Families
References: 1. Cabral, Luis. "Introduction to Industrial Organization", MIT Press, 2000. 2. www.thefa.com 3. http://stats.football.co.uk/dom/ENG/PR/attend.html 4. http://stats.football.co.uk/dom/ENG/trn/ENGFAC_F.html#F 5. www.wembleystadium.com 6. www.millenniumstadium.com