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Malcolm Glazer, cartel buster

The Times (UK) claims to have seen documents which reveal the nature of Malcolm Glazer's business plan for Manchester United. Item one is higher ticket prices:

Manchester United ticket prices are to rise by 54 per cent within five years, under plans by Malcolm Glazer, the club'’s new owner, to boost club revenues to £246 million by 2010.

This won't make United fans happy, but it makes sense. Lately I have been reading on ownership issues in English football. On the surface at least, English clubs appear to underprice tickets relative to a profit maximizing standard. English ownership certainly caters to the interests of supporters in a way that North American clubs don't. The new book by Syzmanski and Zimbalist makes this point, and it's also evident in the papers available at the University of London's Football Governance Research Centre.

Underpricing might make sense in a world without international competition for talent. Suppose it is true that English clubs operate on the principle that costs (think player wages) are constrained by club revenue. In this case, a tacit agreement among the clubs to restrain gate revenue is merely translated into lower player wages. Most fans are happier as a result, and so they sing merrily in the stands, or not so merrily when they're mad at the referee or Arsene Wenger.

Such a tacit agreement breaks down in a world with international competition for players. Internationalization has only recently become rampant however, and there are significant restraints on this competition. Further, the English League's revenue position as it stands is substantially better than any other country. Thus, a tacit agreement could survive in some form for some time before it unraveled.

Enter Malcolm Glazer. He is certainly hastening the demise of the "English way" of club organization. But more than that, he's the cartel buster.

It could be as simple as this: Glazer realizes "the cartel" is doomed, and is willing to be the active protagonist. He'll take both the profits and the public abuse that comes from breaking down a gentlemen's agreement among English clubs. It's part and parcel of being the agent that busts a cartel. A cartel which in this case is a more gentlemanly form of club organization whose days - at the top flight at least - may be numbered.