The Price of Michigan's Admission

Rick Osentoski-US PRESSWIRE

The Michigan Athletic Department seemingly makes an annual pledge to do its best to not increase the cost of football tickets. This season, the students are seeing an increase alongside the move to general admission, and season ticket holders will again see a few dollars bump spread out over the seven game home schedule, and individual ticket costs go up in accordance with other programs. Football ticket revenue is a huge source of income for Michigan, but are the cost increases really that outrageous or outside the norm? Let's find out.

Michigan fans across the country have been receiving those nondescript brown envelopes in the mail containing the season's football tickets over the last few weeks. A prized possession among fans, tickets to Michigan games are a commodity of sorts, freely traded between eager attendees. Just don't try to corner the market on them like the Duke brothers tried with frozen orange juice in the movie Trading Places, that never works. Like any other hot commodity, tickets to the games have been steadily rising, because Michigan is good at football, and demand is higher than ever. But what factors into the price pattern of tickets besides simple supply and demand is a combination of keeping up with the rest of college football and the athletic department's own operating budget.

This year, Michigan will move to a dynamic pricing model for individual tickets, allowing the market value to dictate how much people pay to go to a game. For example. the face value of tickets to the game against Akron is likely not going to move much above the $65 price point, because there will be no short supply out there in all possible locations around Michigan Stadium. For the night game against Notre Dame, however, individual ticket prices will go up far beyond their face value of $65.

That's not a new concept of course, because people selling tickets outside the stadium, and in the last few years, over the internet, have made tidy profits for high-demand games.

Then Bill Martin came to town in 2000, alongside a consistently good product on the field year in and year out.

Upon coming across Michigan's ticket pricing on ticketmuseum.com (hat tip to Greg Dooley of MVictors.com), the upward trend is obvious. Ten years ago, a ticket to the 100th Michigan-Ohio State game bought on game day was at least $120 a seat (I know this because I saw my kind father pay that), but the face value of tickets in that 2003 season was just $55. Martin's first year on the job, face value of season tickets was $35 per game. The next season, it was $51, and continued to go up from there.

Michigan often spreads out the yearly ticket price increase across the whole season, adjusting the value of the big-time games to be (understandably) more valuable than say, a game against Akron. This year, they get the big three -- Notre Dame, Ohio State and Nebraska -- at home, probably for the last time in the foreseeable future. Thus, those tickets are $95 apiece and all the others are $75. That change happened when Michigan realized they could charge more for suites, premium seats, and licenses inside the stadium bowl, distorting the true face value to a much higher level when those "buy-in" fees (explained here) are added.

With the dynamic pricing model instituted for 2013, face value is essentially a moot point for anyone besides season ticket holders, but the overall pattern for Michigan's ticket valuation is not that far outside the other big college football programs around the country.

Among all of Michigan's games this year, Notre Dame and Ohio State are of course the biggest draw. Current data from Vividseats.com shows that the average cost of a ticket to the night game against the Irish is $418-$439 apiece, whereas the battle with Ohio State is at $363 per ticket. Notre Dame's value erupted after a 12-0 regular season, and the Irish are participating in four of the top nine priciest games this year. Michigan is fourth in the data (also given out by VividSeats) for highest average ticket cost behind Notre Dame, Ohio State, and Alabama.

The big programs all stay pretty consistent in their positioning for ticket values, and TiqIQ.com has Michigan at eighth nationally in 2012. Michigan requires a minimum $500 donation to even be considered for season tickets, and so does Alabama and the other heavyweights. The point is, when demand is this high, of course ticket prices are going through the roof. Notre Dame requires "ticket rights fees" of over $1,000 per ticket annually plus a $50 buy-in for their lottery wait list. Michigan's requirement is $75 for an annual deposit to keep a seat.

Michigan's Athletic Department budget for fiscal year 2013-2014 is $137.5 million and using 2012 football revenue as a guide, a little under a third of that will be football-related revenue ($85.2 million last year). A total of $49.3 million will come from the three major sports' ticket revenue this year. Compare the list of the most profitable football programs in the country to the list of those with the higher average ticket prices. More than half of them are programs in the top 15 of both lists.

Athletic departments are expensive to operate, or so says Dave Brandon and most of the other major FBS athletic directors. Football funds most of the other varsity sports, and I used to think ticket prices were keeping pace with inflation and operating costs. The last decade, it's more about raw demand and revenue. It's a recession-proof business, there's no turning back. If Michigan's ticket prices had been keeping up with inflation, that 2003 ticket to the game against Ohio State would cost only $69.82. Instead, this year it's $25.18 higher, at $95. Same goes for those seat licenses and premium fees, not to mention the increase of student ticket prices 23 percent for this year. Everything goes up when the potential for greater revenue is there.

In direct contrast to Michigan's pricing policies, this experiment on StubHub versus paying for season tickets illustrates just how inflated the cost has become. Monetizing demand for football tickets at Michigan is right in line with the rest of college football, it's the model going forward in the post-BCS era. Michigan was one of the last schools to adopt similar ticket cost plans, but it has become incredibly lucrative in a very short time. College football will continue to be a business while the demand is there, Michigan is simply cashing in along with everyone else.

Correction: A source was incorrectly cited in the original version of this piece. It has been updated to attribute the ticket price data to VividSeats.com.

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