Rise in College Football Ticket Prices

Wall Street Journal (via ProQuest)

As teams look for new revenue streams, ticket prices are particularly attractive. Unlike income from things like TV rights and bowl games, teams don’t have to share ticket proceeds with their conferences.

For years, colleges have awarded the rights to buy the best season tickets based on a candidate’s tenure as a season-ticket holder: Fans with a longer tenure get first dibs on the best seats. But more colleges are now adopting a system similar to the pro teams, which offer so-called personal seat licenses, or one-time payments that give fans the right to buy season tickets.

Many teams say they have no choice but to raise prices. “If we didn’t do something, the only way to cut costs even further was to look at dropping some sports,” says Joe Parker, a senior associate athletic director at Michigan, which has a program that requires about 45% of season-ticket holders to pay a fee of $125 to $500 annually. He says efforts in recent years to cut costs helped put the athletic department in the black, but staying there was getting increasingly difficult.

Sometimes, watching the local pro team is now a better option financially than taking the family to the college game. For a season ticket in the premier club seating area at LP Field, home of the Tennessee Titans, fans have to pay $4,050 — a one-time fee of $1,500 on top of the $2,550 price tag for the eight-game package.

Some 160 miles east in Knoxville, the University of Tennessee is now offering high-rolling fans seats in the new East Club, which has 422 outdoor, theater-style seats under a cover. The cost: $4,000 a year for the seats, plus a $25,000 donation payable in equal installments over five years, bringing the total annual price tag to $9,000 for each of the first five years. The section has an adjoining hospitality club room with private restrooms, pre-game and halftime buffets. (Food isn’t included in the Titans plan.)

Wither the Georgia Dome?

Arthur Blank wants a new stadium.

“People might say, ‘Why is it an issue now when you’re talking about 2015, 2016?’ The answer — and the reason it’s in the front of my mind — is that it now takes about eight years to build an NFL stadium when you include thinking it through, finding the right location, visiting stadiums around the world, understanding what the fans want.”

Blank cited two reasons for a new stadium: Atlanta’s football team is near the bottom of the NFL as a revenue producer, and the Georgia Dome, where the Falcons have played since 1992, will have some serious age on it in another decade.

Blank said the Falcons’ financial arrangement with the state-owned Dome is not competitive with other NFL teams. But he added that even if the team had a better deal a decade from now, “I think a new stadium would be needed. Domes tend to age more quickly than other buildings do. It will be 23- 24- 25 years old [by 2015-2017]. The facility itself will need to be replaced.”

Why does he want a new stadium?

Forbes Valuation

Forbes Ranking

Ballparks.com Info (look at club seats)

Although NFL teams share most national revenue equally — including the league’s mammoth television contracts — a wide disparity has developed among teams in recent years because of a growing gap in locally generated revenue that is not shared.

The key variable in determining how much local revenue a team can generate is its stadium arrangement.

While many teams have stadium deals that allow them most or all profits from concessions, parking and suite rentals, the Falcons’ deal with the Georgia Dome falls far short of that.

The deal — negotiated between state officials and late Falcons owner Rankin Smith — guarantees the team $4 million per year in revenue from the Dome in lieu of a percentage of concessions, parking and suite rentals.

In addition to the guaranteed amount, the deal gives the Falcons a share of the Dome’s annual profit after operating expenses and debt payments are covered. The Falcons get 70 percent of the first $2.85 million in profit and 50 percent of any additional profit.

Also, the Falcons have a separate arrangement with the Dome to market and sell club seats, suites and advertising, for which the club is paid a commission.

According to state records, the Falcons received about $10.7 million from the Dome in fiscal 2006 — the $4 million guarantee, $2,673,604 in profit sharing and $4,043,959 in commissions.

Check out the Redskins Valuation. See their ballpark.com profile.

Dan Snyder added a ton of club seats to a total of 15,000.