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If you want to see Michigan at Ohio State next year, you’ll be paying a record-high price to purchase the ticket through the athletic department: $195. While that might not sound like much on the secondary market, it is a high-water mark for face value at Ohio State.
Ohio State’s new variable ticket pricing methodology means the better the game, the more you’ll pay to get in the door. Variable ticket pricing has become commonplace in professional sports, but it’s only beginning to infiltrate the collegiate ranks.
Ohio State began using the variable pricing model in 2013, and reportedly will now make the move to variable pricing permanent.
The outrage was almost immediate when I tweeted out the news. People said the common fan is being priced out of the game. They said the move is pure greed.
I couldn’t disagree more. But then I understand how the business of college sports works.
Fans have no idea how the business of college sports works.
Ohio State supported 929 student athletes last year, according to a report it submitted to the NCAA, and it is annually one of the top athletic departments in the country in terms of the number of student athletes supported. And the number of teams it supports is astounding.
Ohio State is one of just 76 Division I schools that still competed in men’s wrestling in 2014-15 (compared to 250 participating in football). The Buckeyes still compete in men’s gymnastics, one of just 15 Division I schools still supporting a men’s gymnastics program last year.
Since 1988-89, 101 men’s wrestling teams have been cut, according to the NCAA. Men’s gymnastics has been discontinued at 38 schools during the same time period. But not at Ohio State.
The same fans that are calling Ohio State greedy for raising football ticket prices would have pitchforks in hand if Ohio State was cutting these sports like so many other schools. Shots of student athletes with tears in their eyes would be on the front page of the sports section in Columbus.
Where do you think the money comes from to fund those sports? It doesn’t come from the sports themselves.
Football is an athletic department’s best chance to support itself.
Let’s take a look at Ohio State’s men’s wrestling and gymnastics programs.
Ohio State won the national championship in men’s wrestling this year. Yet, just last year the program was -$772,487 in the hole (and I would be surprised if they aren’t again when the numbers are released for this year). Ticket sales accounted for just $101,929 in revenue. That’s not even enough to cover the tuition, room and board for the wrestling student athletes, which cost the athletic department $355,236 last year. Adding the cost of attendance stipend this season will make that number even higher in every year to come.
In total, men’s wrestling at Ohio State accounted for $925,472 in revenue last year. Expenses — everything from tuition, room and board, travel, equipment and uniforms, coaching salaries and medical expenses — ran $1,697,959.
Men’s gymnastics didn’t fare much better. It produced just $114,202 in revenue but had $963,158 in expenses. That program didn’t generate a single penny in ticket revenue.
Football, on the other hand, generated $40.4 million in excess revenue last year, meaning it still had money left over after covering its expenses. Men’s basketball, generally the only other sport with the opportunity to produce excess revenue, added $14.2 million to the collective pot.
That money doesn’t just sit in vaults marked for football and basketball, waiting to be spent on the next facility or the next head coach. It funds the $32 million in expenses left over after revenue from the other sports has been applied to their expenses. It funds the $8.6 million athletics contributed back to the university last year. It pays down the $191.2 million in debt service on athletic facilities.
The Buckeyes field 17 men’s sports, 17 women’s sports and two mixed teams. NCAA rules only require it to carry 16 sports total.
Why should the scalpers make all the money?
That’s a lot of extra opportunity for student athletes, funded in part by taking advantage of the demand in the marketplace for tickets to a premiere game. Money would be made on the secondary market (and make no mistake, there’s still money to be made there) and lining the pockets of scalpers if the Buckeyes didn’t capitalize on the opportunity.
This year, the average price in Ann Arbor on the secondary market is $428.72, according to TiqIQ. The get-in price (i.e., the cheapest ticket you can get) is $231.
A look at the average price in Columbus the last three times Michigan has come to town further supports Ohio State’s decision to raise to $195 face value next year:
Fact: Ohio State is still asking for less than history tells us the market can command.
Fact: Ohio State is one of the few self-supporting athletic departments in the country because of the demand for its football and basketball products.
Fact: Ohio State’s financial success in football and basketball funds the shortfall of every other sport on campus.
Move along, folks. There’s nothing to see here.