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How are dynamic ticket prices affecting alumni?

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By Everett Cook, Daily Sports Editor
Published September 5, 2013

It’s July 2013. You’re a couple years out of school, old enough to be making money but not old enough to be making a lot of it. Maybe you remember the 2011 Under the Lights game and want to experience that for yourself this year in what could be the last Michigan-Notre Dame game in the Big House for the foreseeable future. You’ve got a group of friends together.

There’s only one problem: average tickets for Under the Lights II are running at about $300 each. Good seats are close to $500. The best seats might cost you $1000.

In the past, single-game tickets could be bought through the Athletic Department for face value. There was always high demand for big games, but seats could be had if you were familiar with the system. This year would be different.

There was outrage when the Athletic Department announced that single-game tickets for the 2013 football season would be using a new dynamic pricing system, meaning that per-ticket prices fluctuated depending on the game. Groups of alumni felt like the University was trying to siphon as much money as possible off the bottom line, at the expense of former students.

But what’s the better way to do it? If the Athletic Department continues to sell tickets at face value, they are basically giving money away to a secondary ticket market. In years past, people would buy tickets from Michigan and sell them on sites like StubHub.com or ticketmaster.com for two or three times more than they bought them for.

This year, Mark Bonges, a 2004 alumnus who is on the department’s email list, got on the Athletic Department’s website to find that the cheapest tickets available cost $450. They were well out of his price range, but tickets in the same section were selling for a lot more on StubHub. He bought from the Athletic Department, thinking that someone in his group of friends would want these “cheaper” tickets.

Nobody did.

He didn’t want to scalp the tickets, but still ended up making $500 on the secondary market, because here’s the problem: regardless of whom the money is going to, right now, there are enough people willing to spend an ungodly amount of money to go to a premium Michigan football game. It’s just a matter of where the money is going.

Should the Athletic Department try to capitalize on that?

“It makes a lot of economic sense, but the fallout could be if the alumni don’t see it as fair and if that affects the alum’s relationship with the school,” said Tammy Feldman, a University economics professor. “Will they donate less? Will they go to fewer games? What does it do to the relationship with alums? The bottom line is that most people don’t like change.”

The new policy doesn't affect anybody that has season tickets — those prices stay the same regardless of the game. But season tickets aren’t cheap, as mandatory donations and personal-seat licenses raise the price well above the face value of the ticket.

The fans this ticket policy affects are people like Kara Jasina, a 2012 alumni who is in graduate school at Wayne State for social work. She lives close, but can’t afford season tickets and wouldn’t be able to afford single-game tickets with the new policy. Her plan was to tailgate in Ann Arbor and watch the game on TV before she won the right to buy tickets in a lottery run by the Football Saturdays program in the Alumni Association (see chart). Without that lottery, she wouldn’t have been able to go to the game.

The ticket policy affects people like the engineer who works for one of the automotive companies in the area and who graduated last year but is using student tickets again this year. He requested his name be withheld because of his unauthorized use of student tickets. He couldn’t afford season tickets, and through a loophole in the system, got student tickets again this year (see chart). After his remaining friends still in school graduate, he won’t be able to afford season tickets anymore and will have to scalp them.

Most of all, it affects people like Bonges, who has younger children and lives in Chicago. Every year, he goes to one Michigan game with his college buddies. This year, it will be Notre Dame. He won tickets through the lottery, but two of his friends didn’t. They couldn’t afford the single-game ticket, and are going to scalp before the game.

Again, tickets were going to be expensive anyway. Either the Athletic Department makes the money or the secondary marketplace does.

Feldman, the economics professor, compared it to concert tickets.

“Musicians set their ticket prices really low because they want their base fans to be able to afford it, but they know a lot of those tickets are going to be bought up by a lot of people who intend to re-sell them,” she said. “Because they don’t want to turn off their fans, the performers don’t want to charge the $500 a ticket for their concerts. What’s happening is that the alumni are saying, ‘Is a football game more like a Bruce Springsteen concert, or is it more like buying an airplane seat.’ The alumni reaction is saying that it’s more like a concert ticket, where you want to make it affordable for everybody.”

At what point does it become too much for just a football game?


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