A recent freakanomics episode shed some light on ticket pricing, and I thought this would be of interest to the board. The epsiode was not specific to sport events, but I think the main message applies.
Problem: Most venues sell ticket prices below market value. The reason for this is fan outrage at high ticket prices (yes, I was very mad at dave brandon). However, the difference between the market value of tickets and the actual value goes to secondary brokers and scalpers (many people are willing to pay 100s for OSU ticket). Many companies operate bots that purchase large sums of tickets, and then resell tickets on sites like stubhub. These companies make a lot of money without adding a lot of value to the consumer or revenue to the production company (MI).
In the episode there is an example where the Rose Bowl sold 1000 tickets, and one company (TicketWise) used bots to buy 830 of the avialable tickets.
1) The way the athletic department gets around this now is by paring high value tickets with lower value tickets ( e.g. a package of OSU, Air Force, and Cincinatti). This solution works well for venues trying to offload low value tickets and high value tickets. However is ineffective if there are a large number of high value tickets.
2) Auction style. All tickets are auctioned off. In this case, Michigan would get a fair market value for all of their tickets and is not responsible for setting ticket prices, which may reduce fan anger towards them. However, this method creates a socioeconomic devide on who can attend games (atleast state fans would never get tickets).
3) No resale of tickets. If you buy a ticket, its because you want to go to the game, so go to the game. This method allows ticket prices to remain "low", and keeps 3rd parties from making a lot of money of of Michigan sports. However, if you buy tickets and can not go to the game the consumer has no recourse for selling tickets. Also, may be empty seats especially for the Rutgers games.
I like the idea of using a combination of 2 and 3. Sell some portion of tickets at a low price, but with the condiiton that they can not be resold. Sell the rest of the tickets to the highest bidder to maximize profit.
What say you MGoBlog? Do you like the system as is? Do you like one of the proposed solutions? Do you have a better solution?