Milking the Cash Cow
By Will Stewart, HokieCentral.com, 2/24/00

One thingís for sure: when it comes to Hokie football success, and the associated trappings like stadium expansion, be careful what you wish for, because you may get it. This is particularly true when youíre talking about ticket prices.

Every Hokie fan wants a successful football team and a Heisman Trophy candidate. Playing in the national championship game and having the most exciting player in college football playing for your team is every fanís dream. But what itís doing to ticket prices is no oneís dream, and some Hokie fans are starting to get priced out.

From 1994 to 1999, Hokie football season tickets went up only 6.1% total, or a measly 1.2% per year. Times were pretty good for season ticket holders, as the Hokies featured some of the lowest ticket prices available for a perennially ranked team.

In 1997, for the first time, the Virginia Tech Athletic Department introduced discounted season tickets. (Until then, season tickets cost the same as a complete set of individual game tickets.) From 1998 to 1999, the price of a season ticket or single game ticket held steady. As Tech football got better, the cost of going to the games stayed level.

The good times are over. Season ticket holders who havenít yet heard last weekís news about prices for the year 2000 are in for a shock, and fans who used to purchase tickets on the Family Plan are in for a double-whammy. Namely, there is no more Family Plan.

Welcome to the evolution of a program. Along with the success has come a higher cost for being able to witness that success in person. And as expected, some unhappy fans are watching this progression with dismay.

The Rising Cost of Season Tickets

The following graph and the accompanying chart show the gradually rising cost of season tickets in recent years. As you can see, from 1994 to 1999, the cost of season tickets grew from $21.67 on a per-game basis to just $23.00 on a per-game basis, a small increase of $1.33 per game over the course of 5 years. Not bad.

SEASON TICKET COSTS, 1994-2000

SEASON

PRICE

#GAMES

COST PER
GAME

SINGLE GAME
AVE. COST

1994

$130

6

$21.67

$21.67

1995

$106

5

$21.20

$21.20

1996

$154

7

$22.00

$22.00

1997

$132

6

$22.00

$23.00

1998

$138

6

$23.00

$26.00

1999

$138

6

$23.00

$26.00

2000

$168

6

$28.00

$29.67

The average cost of individual game tickets (in other words, tickets purchased one at a time, instead of through the season ticket package) went up more precipitously, from $21.67 per game to $26.00. This is an increase of $4.33, or 20%, equating to 4% per year.

The disparity is due to the fact that Tech didnít even begin to discount season tickets until 1997, a policy that encourages people to buy season tickets and is a smart business move.

But in the year 2000, the jump is breathtaking. Last week, the Tech Athletic Department announced that season ticket prices will be $168. The BCA game with Georgia Tech, the 7th home game, will be an additional $35 if purchased, driving the season ticket price up to $203 if the buyer chooses to include that game. For purposes of discussion, that game is not included in this analysis.

The season ticket prices for 2000 represent a jump of $5 per game, or almost 22%, in one year. Not many Hokie fans have voiced complaints about this one. They all seem to understand the economics of whatís going on, and as usual, each fan will make his or her own buying decision independently.

Death of the Family Plan

But something that did set some Hokie fans off and inspire a few angry emails to HokieCentral and a discussion on the HokieCentral message board was the demise of Techís "Family Plan" season ticket package.

The Family Plan allowed a season ticket buyer to purchase discounted season tickets under the premise that the buyer would use the tickets to take the family "out to the ballgame," as it were. According to the Tech ticket office, the last version of the Family Plan season ticket, available in 1999, was priced at $102 per season ticket, as compared to $138 for regular-priced season tickets.

In exchange for the discounted tickets, Family Plan buyers, shall we say, didnít get the best seat in the house. They were restricted to seats in sections 18 and 20 (see HokieCentral's Lane Stadium seating chart for the location). But both sides were happy with the transaction. Family Plan buyers on a budget got to go to the games, and the Tech ticket office unloaded some of their more undesirable seats with no complaints. In recent years, the Family Plan tickets sold out easily and had accumulated a waiting list.

But last week, Family Plan buyers were told that the program will be discontinued for the 2000 season. Buyers can keep their existing seats, but only if they pay full season ticket price. As you can imagine, that piece of news doesnít sit well with former Family Plan purchasers, who are, by definition, more budget-conscious.

Itís Simple Economics

What Hokie fans, some of whom are disgruntled, are finding out is that theyíre involved in simple economics. When demand for a product starts to meet or exceed supply, then the supplier raises the price of the product, in order to maximize profit. And the demand for Hokie football tickets is most definitely meeting the supply, regardless of the North End Zone expansion slated for the year 2000.

Hokie fans are also discovering that stadium expansion, like the expansion slated for Lane Stadium over the next few years, costs money, a lot of money, and one way to raise that money is by charging more for tickets.

Those two combinations together Ė the supply and demand points meeting, and a stadium that will soon be expanded Ė are driving up the cost of game tickets drastically.

But sometimes, lost amidst the theories of economics are the people that are caught up in it. Sometimes sports programs collapse and attendance decays (menís basketball, anyone?), and sometimes, a sports program grows by leaps and bounds, as Techís football program and womenís basketball program have done.

When attendance declines, the ticket prices hold steady. Tech menís basketball tickets are a mere $10 per game, an incredibly low price when compared to other schools in the Big East, Techís new home starting this summer. I read an article recently that said that WVU charges $15 and $20 per game for tickets, and that those tickets are "among the lowest priced in the Big East." A quick look around the web shows that Syracuse charges $16 per ticket, Connecticut charges $25 per ticket, and Georgetown charges $15 and $22.50.

So Tech menís basketball fans are happy with ticket prices. Economics are working in their favor.

But as a program grows and advances like the Tech football program is doing, many people who canít afford the rapidly rising cost of admission get left by the wayside, and in their place are new fans who are willing to pay the prices being charged. In between are the fans who have always been here and will always be here, willing to pay almost any price, within reason, to watch Tech football.

If you listen carefully to the din surrounding Tech football now, you can hear individual voices, and some of those voices are angry and are saying that theyíre getting out now. Some of these fans are long-time ticket buyers who feel that their loyalty is somehow being betrayed.

Virginia Tech is banking on hearing enough voices that are saying "yes" to paying the increased prices, such that those who wonít and are canceling their season tickets wonít hurt the bottom line too much. Tech athletic officials are probably making a safe bet, because Hokie football is extremely hot right now, and theyíll probably not only get the prices theyíre asking, but they may sell out, as well.

Thatís big business for you, which college athletics certainly has become. And with a $50 million stadium expansion project looming on the near horizon, itís not just the economics of supply and demand that are affecting prices. Itís the need for more income to fund stadium expansion, not to mention the exorbitant cost of Big East all-sports entry, Olympic sports funding, and Title IX restrictions.

The Rising Revenue from Season Tickets

If you take the number of season tickets sold from 1994-1999 and project an ambitious (but not unreasonable) figure for the 2000 season, it becomes quickly apparent what a golden goose the Tech football program has become for its athletic department.

SEASON TICKET REVENUE, 1994-2000

YEAR

PRICE

TICKETS SOLD

REVENUE

1994

$130

12,280

$1,596,400

1995

$106

14,124

$1,497,144

1996

$154

16,087

$2,477,398

1997

$132

16,675

$2,201,100

1998

$138

18,433

$2,543,754

1999

$138

23,500*

$3,243,000

2000

$168

30,000**

$5,040,000

* Estimated     ** Projected

Of course, the chart and the associated graph assume that all season tickets sold are at the full price, not discounted like Family Plan tickets and Faculty/Staff tickets. It also does not include revenue from student season tickets, which were introduced in 1999. It makes the data a little inaccurate, but simpler to calculate and discuss.

Assuming that Tech is able to sell 30,000 season tickets in 2000, this means that season ticket revenue will have doubled in just two years.

The Little Guy

What do I think of all this, of the rising cost of admission and how some fans are starting to get shut out? Do I approve or disapprove? I donít think anything, other than what Iíve expressed here, and I donít approve or disapprove, I merely recognize whatís going on.

This juggernaut was set in motion way back in 1993, when a beleaguered coach named Frank Beamer went 9-3 and took his football team to the Independence Bowl. He, his players, and his coaches started Virginia Tech football down this path, and kept it on that path through three Alliance/BCS bowl bids and a national championship game.

The cost of running a small-time program is low, but of course, Virginia Tech football quit being a small-time program a long time ago. The cost of running a big-time program, and running it successfully, is high. Along the way, costs go up, and some of the little guys get squeezed out.

As I said in the beginning of this article, welcome to the evolution of a program.

Will Stewart is the founder and General Manager of HokieCentral.com.  He writes the News and Notes section, game previews, and game reports for HC, and he contributes a column when time permits.

          

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