Keeping Up With The Scarlet And Gray Joneses Comment Count

Brian

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anything you can charge I can charge at almost equal efficiency

A cherry-picked statistic from Michigan's worst home schedule in a long time and an eyebrow-cocking assertion caught my attention yesterday:

Michigan increased football ticket prices for this fall's six home games, but could another increase be in the works?

It certainly seems that's the direction.

Dave Brandon, Michigan's athletic director who spoke to the Wolverines Caucus on Tuesday, said 43 percent of the athletic department revenue comes from ticket sales.

"We're woefully under-market," Brandon said.

Michigan earlier this spring announced what it called a "modest" increase in football ticket prices. The six home-game package is $390, or an average $65 per game. Ohio State charges $75 a game, and Brandon said that gives the Buckeyes more money to put back into their athletic program and makes them more competitive.

This claim probably catches anyone who writes a check to the university by surprise so I thought I'd check it. It's hard to do so since the documents you can FOIA from the two schools list things a lot differently. They also do things differently: OSU has no mandatory annual PSLs. Instead they have a "Buckeye Fund" you donate to which gets you points that gets you priority, etc.

But the bottom line is I don't think Michigan fans are getting off easy. In 2010 OSU's eight-game home schedule netted them a total of $42.1 million. Michigan's seven games that year brought in 33.1 million. In 2011 OSU's seven home games were projected to bring in $36.4 million; Michigan's eight were projected to bring in 41.3 million. Over those two years that's a deficit for Michigan of about 270k per game, or about $2.45 a ticket.

It's hard to get a grip on exactly what the comparable numbers are in donationland but Michigan seems to have an advantage. In 2010 Buckeye Fund donations were around 10 million. Michigan's PSDs were $8.9 million plus another three million in "other gifts." Their nascent club seats and suites brought in $7.8; the year after things got in full swing and the fancy seat donations brought in $13 million. In 2011 OSU brought in $11 million from its fancy seats and another 3.5 from a "stadium ticket surcharge".

Add it all up and…

2010/2011 OSU Michigan
Regular ticket sales 78.5 74.4
Suites and club* 22 26
Generic Donations 20 24.8
Ticket Surcharge 7.5 N/A
Total 128 125.2

*[I used the 2011 numbers twice here since it was clear Michigan expected the 2011 number to be closer to accuracy going forward.]

…the gap is essentially nonexistent, the equivalent of $1.70 a ticket over those two years. Without the temporary surcharge Michigan would have an advantage. It's not clear what market Brandon's looking at. If it's the one in Columbus he's wrong.

Comments

Maize_in_Spartyland

June 6th, 2012 at 12:54 PM ^

Brandon picked an interesting time to talk about price increases, especially with a pretty weak home schedule. Keep in mind he indicated future schedules will have dates filled shortly - maybe a way to sooth the masses?

Keep in mind if FBS schools go the route of compensating players, especially with Spurrier-like numbers, the money is going to need to come from somewhere. Licensing fees and ticket increases may be met with some resistence, but likely will still bring the money in.

You can only charge so much for a hot dog and coke.

Craig

June 6th, 2012 at 1:00 PM ^

Wait a second...wasn't one of the points of putting in the suites and lux boxes was to keep regular ticket prices from increasing? Back me up on this. Does anyone else remember that statement when they were pitching the suites?

Feaster18

June 6th, 2012 at 3:41 PM ^

Both Martin and Brandon repeatedly stated that the addtion of premium seating would lessen the need for ticket price increases .  Those promises lasted for oh, a good 3 or 4 months or so.  They'll never reach a point where they feel they have enough money. 

Ed Shuttlesworth

June 6th, 2012 at 1:06 PM ^

Why are Dave Brandon and his business/marketing ideas so consistenly in the newspapers and internet?  Can't he shut up for a few days?  His musings are tedious and banal.

I Blue Myself

June 6th, 2012 at 1:14 PM ^

Ohio State should be able to make more money from ticket sales.  Ohio is a larger state than Michigan, and OSU has no major football program in-state to compete with (sorry Cincinnati).  Imagine if MSU had never existed.  Michigan would have a lot more fans (and a fan base more similar to OSU's), and tickets would be a lot harder to come by.

Not surprisingly, then, it's much more expensive to get OSU season tickets than Michigan.  Unless you're a varsity letter winner or have been buying tickets since the 1980s, the only way you get OSU season tickets is with a minimum $1,500 annual donation.  Every single year.  I'm not a Michigan season ticket holder, but it looks like the equivalent minimum donation for Michigan is $50 per year.

Of course there are a lot of other variables to take into account: number of season tickets vs. individual game tickets sold, revenue from suites, etc., and I don't know how all the numbers add up.  But if Brian's numbers are correct and Michigan is anywhere close to OSU on ticket sales, I'd be very impressed.  I also think Michigan will reach its maximum possible ticket revenue a lot sooner than OSU would, and Dave Brandon should not expect he can massively raise prices and still sell out.

 

Blake

June 6th, 2012 at 3:36 PM ^

This is well said and exactly what I was thinking.  Beyond that, OSU needs more money because they have an incredible 39(!) varsity sports compared to Michigan's 27, so OSU needs to rely a lot more heavily on its football (and basketball) ticket revenue to fund the 12 extra sports budgets, scholarships, coaches salaries, etc.

This is not a 1:1 correlation and Brandon is just searching for an excuse to raise prices again once another "premium" football season comes along next year with ND, Nebraska and OSU come to town.

Regardless, I have resigned myself that college and pro sports are working their way to pricing fans out...it just depends on when the tipping point happens, but it's just dangerous to keep pushing yourself until you find out when you get there.

winterblue75

June 6th, 2012 at 1:30 PM ^

The $2 million needed to break the contract for the game @UConn has to come form somewhere. DB didn't sign that contract so why should he have to pay for breaking it.

wolvrine32

June 6th, 2012 at 1:44 PM ^

Someday soon in our internet age, you will login to your account.  You will type in the largest amount you would be willing to pay for next season's tickets, along with everyone else.  The highest 114,000 per seat bids will get the seats in the order of $'s bid (highest $ bid gets 50 yard line, 20 rows up, etc.)

The end.

(We're headed there, deep down you all know it.)

Alton

June 6th, 2012 at 3:04 PM ^

Yes, almost, but they wouldn't bundle the tickets into season-ticket packages if they really want to maximize revenue.  They would have a separate auction for each game.  Otherwise, you would be leaving money on the table from people who really want to see one specific game but don't want to see any of the others.

M-Wolverine

June 6th, 2012 at 3:50 PM ^

You'd be taking gas on games like Eastern, because people wouldn't even pay the minimum, and the Stadium would be half empty.  There are those going to one game a year, and buying individual tickets; those will remain.  But a lot buy the whole season and go to Eastern because they have it, but are buying it for ND or OSU.

Alton

June 6th, 2012 at 4:22 PM ^

It's always more money for you if you have a separate auction for each game, even if it means that some games are not sold out.  Here's a hypothetical:  Let's say I have 100K seats, and a 3-game schedule:  Eastern Michigan, Delaware State and Ohio State.

10,000 fans value the EMU game at $100, and the other 2 games at $0.

80,000 fans value the OSU game at $100, the EMU game at $10 and the DSU game at $0.

20,000 fans value every game the same--$40 each.

If you auction off season tickets as a package, you sell 20,000 season tickets for $120 and 80,000 season tickets for $110--a total of $11.2 million.

If you auction off tickets game-by-game, you sell the EMU tickets for $2.5 million, the DSU tickets for $800K (and you have 80,000 unsold seats), and the OSU game for $8.8 million--a total of $12.1 million.  The question is whether you want the extra money at the "expense" of looking bad with all of the empty seats. 

There is no scenario you can construct where auctioning the season tickets will make more money for the university than auctioning single game tickets. 

momo

June 7th, 2012 at 9:14 AM ^

Mathematically, your analysis is correct. However, you are making, at least, the following two assumptions about the ticket buying population in drawing your conclusion:

A) they are rational economic actors

B) they assign no value to holding a season ticket (same seat for each game, I'm not even necessarily talking about the year-to-year renewal value)

Neither A) nor B) is supported by the evidence.

BBA1994

June 6th, 2012 at 1:53 PM ^

would hit the maximum ticket prices before Ohio would based on all of your points.  However, I think Brandon subconscious point is that Michigan is nowhere near that price point yet, ie, UM can raise ticket prices and still be selling out easily.  I say maximize the revenue to support the athletics and the general University.

chitownblue2

June 6th, 2012 at 2:01 PM ^

Michigan clearly tries to make as much money as possible off of football: it does this for a variety of reasons

-Supporting the array of non (and low) revenue sports.

-Contributing money to the schools general scholarship fund.

As an organization (UM Football) that tries to make the most money, I am not surprised they are trying to make the most money possible.

Are you?

lilpenny1316

June 6th, 2012 at 3:04 PM ^

MSU seems to be the only appetizing game on the schedule those years, barring a surprise non-conference foe that's outside the MAC or 1-AA.  Who knows what PSU will be like in 2014?  

Unless the conference expands to 14 or 16 teams before then, those schedules look abysmal.  They should lift the beer ban on those years.

Section 1

June 6th, 2012 at 9:54 PM ^

The answer would be: It would be almost impossible to tell.

The reason for that answer is the fact that the Stadium renovations were ongoing during most of that period of time.  And at more than any time in recent Michigan football history, season ticket assignments were in a state of flux.  The Athletic Department was "banking" every non-renewed season ticket.  Those tickets wer not being resold as season tickets.  The reason for that was that they were trying to conserve the seats in the main bowl, so that they could widen aisles and re-number seats when the two councourses were completed.  As they have now done.  In the interim, all of the "banked" season tickets were resold as "packages" or as non-renewable season tickets.  Or in some cases sold as singles.

So you can see it is just not possible to acurately guage anything because the supply of tickets was so skewed.  People had the very rare opportunity to buy non-renewable season tickets, or other oddball packages that have mostly gone by the wayside now.  Hard to judge "demand" when the supply is so skewed.

salami

June 6th, 2012 at 4:23 PM ^

can't DB simply call up say, Nebraska's T.Osbourne, and make a deal to agree to play Nebraska in Lincoln two consecutive years in a row, therefore switching the current scenario and getting them at home on the opposite years of OSU and ND?

A line up of MSU, Iowa and Nebraska on the off-years of ND and OSU would seemingly even out our home strength of schedule, and provide a more palatable and desireable annual line-up of home games.

Section 1

June 6th, 2012 at 4:47 PM ^

So true.  Now all we need to do is to figure out what it would mean to Nebraska's schedule to flop the years they travel to Ann Arbor.  It might work.

I'd happily send the team to Lincoln two years in a row to get our permanent in-Conference schedule squared away.  Schedule a really great out of conference team the year that we take an extra trip to Nebraska.

In reply to by Section 1

Alton

June 6th, 2012 at 5:58 PM ^

We need more than just one team to work this out, though.

Teams have 6 permanent in-conference opponents.  Those teams must be on a rotation of 3 home and 3 away every year.  You can't play 4 home and 2 away one year and 2 home 4 away the next.  Well, one pair can but the other 10 teams would have to be on the 3/3 rotation.  I can't see the conference giving special permission to Michigan and Nebraska.

To make it work, the 2 teams would have to bring in either Northwestern or Iowa on the deal, and do a 3-way swap.  The question becomes:  why would Nebraska plus either Northwestern or Iowa agree to such a deal? 

Section 1

June 6th, 2012 at 6:18 PM ^

Your explanation is an excellent one.

Essentially, our "Even-year home conference schedule" features:

  • MSU
  • Iowa
  • Northwestern

And the "Odd-year home conference schedule" features:

  • OSU
  • Nebraska
  • Minnesota

Dave Brandon would probably argue, "That's as close to balance as we can get," and he'd have a good point.  It becomes essential, in even-numbered years, for Michigan to obtain at least one and probably two marquee home-game matchups.  Notre Dame, or a PAC- team or perhaps an ACC or SEC team (!?) and perhaps another quality game.  Our current rotation with Notre Dame should get adjusted, if we are going to keep playing them at all.

This year's special scheduling suckiness (Alabama "road" and ND away) just highlights those issues.

JeepinBen

June 7th, 2012 at 10:05 AM ^

Take a year off ND. Just skip the ND game for 1 year and then resume it. Then we'd have MSU/ND in the same year and Nebraska and OSU in the same year. Not to mention we could schedule a home and home with another marquee opponent when we don't have ND that year.

Alton

June 7th, 2012 at 11:42 AM ^

That would be much easier than trying to get the Big Ten to change its schedule, but would Notre Dame agree to it?  They would then have Michigan and Southern California at home on odd years and on the road even years.  Since those are their two highest-demand games for tickets, I would think that they would like to keep the 2 separated.

Our best bet is finding a marquee non-conference opponent to replace Notre Dame--one who is willing to come to Michigan Stadium on even-numbered years. 

Yellowdart00

June 8th, 2012 at 3:34 PM ^

Don't increase ticket prices! As a recent Alum just getting on his feet, it's hard enough to pay the $500 minimum donation + $400/per package. Hell, just to get in the door this year cost me $1300 - and that's just for 6 games! Freaking ridiculous! I want to come and support my boys, but even a modest increase, plus seat donations, could easily be over $1000/year (not that my situation is unique). It's like a kick in the nuts I tell ya!