Cashing In On Success

The University of Michigan's announcement to turn to dynamic ticket-pricing for single-game college football tickets is a significant move for not only the school, but for all of college athletics.

Though the South Florida football and Georgetown basketball programs have previously used the ticketing model, Michigan --- as any of their 500,000+ alumni will tell you --- is at another level. The Michigan Athletic Department, one of the only profitable programs of its kind in the nation, is big business. As a result, the nation often pays very close attention to what happens in Ann Arbor.

Beginning this fall, the school will use dynamic ticket-pricing for all single game football tickets. The cost of these tickets will be based on demand; which will be calculated electronically by computer program QCue. Prices will change over time, but will never fall below their stated face value of $65. However, tickets for the Wolverines' premiere home games against rivals Notre Dame and Ohio State will likely triple to over $200. Though this may upset many Michigan fans, it will not affect any of the season ticket-packages, which are main vehicle through which alumni and students purchase their tickets.

For the university, the decision is a no-brainer. While low-profile non-conference games such as the team's opener against Central Michigan will likely not sell for more than face value, its games against the Nebraskas and Penn States of the world will fetch over $100 per ticket. This will boost ticket revenue significantly for the university, which has recently invested millions in the renovation of Michigan Stadium and Crisler Center, the school's basketball arena. Given the school's rabid fan base, the higher ticket prices will not prevent the team from selling out the Big House each Saturday, irregardless of team record or weather. Many fans typically pay these higher prices on secondary ticket sites such as StubHub anyway. The only difference is that the school will be profiting directly.

Many experts predict that Michigan's decision to embrace dynamic ticket-pricing will have a domino effect throughout collegiate sports. However, while the model makes sense for schools such as Michigan, it may not be the right decision for smaller universities. Universities such as Michigan already operate their athletic departments as if they are professional teams. The Wolverines even lured current CMO Hunter Lochmann from his former post as VP of Marketing for the New York Knicks. For smaller schools, with less loyal fan bases, the move towards dynamic ticket-pricing may not prove as beneficial to the bottom line. With less demand for tickets, prices may not rise significantly above face value. Furthermore, it risks alienating the school's fans forever. And for those programs with a not-so-Big House, this may actually prove a costly mistake in the end.