Source: Politics
Americans are breaking the bank to attend the FIFA World Cup.
This year’s tournament is historically expensive for fans looking to support their favorite teams in person. Tickets for group stage matches routinely cost more than $1,000 in the months before tournament kickoff, reportedly even drawing the ire of President Donald Trump.
Ticket problems don’t end there. A number of states have launched investigations into whether FIFA misled fans over the location and quality of seats they bought to attend matches. Many fans who bought tickets on resale sites have fallen victim to ghost ticketing, in which resellers flog tickets they don’t actually have.
To get a better sense of it all, POLITICO talked to Florian Ederer, a professor of markets, public policy and law at Boston University’s Questrom School of Business — and a soccer super fan. He’s written extensively about World Cup ticket pricing and access during the tournament, and hopped on the phone the day before his beloved Austria takes on Spain in a knockout match Thursday.
This interview has been edited for clarity.
Why are World Cup tickets so expensive this year?
Well, there are several factors in this. Number one is that this is the biggest sports event in the world. There’s tremendous demand for it. It only happens every four years. FIFA basically has a monopoly on this biggest sports event, there’s nothing that sort of can supplant it. You can’t start a rival league or anything of that sort. Secondly, the event is being held in the United States and in Canada and in Mexico, in particular the U.S. and Canada. These are some of the richest countries in the world, they have also very, very, very large populations, and Mexico does too.
You also talk about another phenomenon, that FIFA has realized this is an opportunity to maximize profits.
It has also adopted two additional things. One is price discrimination, which is that all the group stage matches of previous World Cups were all priced exactly the same. And here, FIFA has taken the approach, well, England vs. Croatia is a more interesting match than Algeria vs. Jordan, and so we’re going to set prices higher for England Croatia than for Algeria Jordan.
They’ve also introduced dynamic pricing, so the price that I get charged for buying a ticket, even if it’s the same ticket for the same game, is going to be different depending on when I buy. Basically like buying a ticket for an airline.
The third tactic that FIFA has engaged in — in addition to price discrimination, dynamic pricing — is that they’ve also done some very opaque supply management, where they’ve not made it clear at all as to how many tickets are actually available at any given time, and they’ve created a little bit this artificial scarcity where they want to keep fans in the dark as to whether they should buy now at higher prices, or just wait until the very end, and maybe get a good deal close to the start of a game.
Then there’s ghost ticketing and other practices out on the secondary market that sometimes leave fans outside a World Cup stadium arena with no tickets, even though they spent the money on a resale platform.
This is something that I think is separate from FIFA. I think the problem there is that the platforms have not used sufficient fines and punishment for resellers that are not fulfilling these promised transactions. The reason they are not fulfilling those transactions is because they resold those tickets for a potentially very interesting match already three months before, and then the prices increase even further, and then the temptation is, of course, to not deliver on that transaction, and instead resell it on another platform for even higher markups. And this is, of course, when these platforms should step in and say, look, you know, somebody was deceived here. We need to institute fines to keep those non-reputable sellers off our platforms.
Are there any steps the federal government could take to make things easier for consumers next time around?
I think there should be much clearer guidance that gives consumers information about how many seats are actually available and what are the prices, and then I think that’s an issue of just consumer transparency and lack of deception that can absolutely pass with legislation. Similarly, with those ghost tickets, I think you should be able to hold the platform liable for these issues, rather than just any particular seller, and the platforms should have to compensate these buyers for other charges that they incurred. If I’m buying a vacation to Dallas to see Austria vs. Argentina, then I’m not just buying the ticket on a platform, but I’m making everything else reliant on that ticket.
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FIFA President Gianni Infantino has defended the high cost of attendance in recent months, telling an audience at the Milken Institute Global Conference in California in May that the organization was applying “market rates” to its tickets.
“We have to look at the market — we are in the market in which entertainment is the most developed in the world. So we have to apply market rates,” Infantino said. “In the U.S. it is permitted to resell tickets as well. So if you were to sell tickets at the price which is too low, these tickets will be resold at a much higher price.”
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