The Michigan athletic department expects to make approximately $5 million from the implementation of dynamic pricing.
Approximately 20% of Michigan football tickets are available and they expect about half of such allotment to be included in the dynamic pricing roll-out (i.e., less than 10,000 tickets).
“There’s so much money to be made in the whole college football ecosystem that to think that they would not maximize revenue is a bit naïve frankly,” Lawrence said. “It is business, even though it’s a collegiate program. They’re obviously dedicated to making as much profit as possible.”
Further, there may be a tweak that could result in additional revenue for Michigan - the athletic department may withhold a certain allotment of tickets on the first day of sale in order to control the amount of supply so that they could sell some of the tickets as the prices rise higher.
The athletic department is set to release tickets on July 31 to the public, at which point it could decide to withhold a percentage of those tickets for a later time. Lawrence said he estimates that the athletic department could make up to another million dollars should they hold on to the tickets while the price goes up.
“If they wanted to be as greedy as possible, they probably would have jacked it up higher than that,” Lawrence said. “The market would have dictated that the demand would be enough to absorb the prices.”