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Too Pricey?

Going to a college football game nowadays is a pricey proposition, but the price on a ticket does not reveal the full expense, not even close. Certain tickets might state their list price at $45 per ticket, but in reality, the ticket could cost up to $900. Because demand has exceeded supply, universities have come up with their answer to the personal seat licenses: If you want the best seats in the house at a Division 1 college football game, chances are you will have to pay for the rights, often thousands and thousands of dollars a year, to buy them.

Tennessee Head Coach Phillip Fulmer

During the 2004-05 school year, the University of Tennessee’s athletic department raised a whopping $25 million, primarily tied to ticket purchases, to help counterbalance the football program’s $64 million budget. With so much money at stake, Tennessee head coach Phillip Fulmer e-mailed over 38,000 season-ticket holders, apologizing for the team’s “unacceptable” season. Because the athletic department is charging so much per ticket to counterbalance the budget, the team is going to have to play well in order to continue selling out games and to continue raising more and more money.

Tennessee is not the only college football team with this same issue. In order to sit on the 50-yard at the University of Florida football stadium, fans would have to make a yearly donation of $12,000! Just to have a decent seat at a football game, not only do fans have to pay for the actual ticket, which is far from cheap, but they also have to make very large donations to the football program. The unfair aspect? Someone who has been sitting at the 50-yard line since the time Steve Spurrier was quarterback in 1966 has to pay a per-seat fee of only $400, according to Doug Brown, director of the school’s Bull Gator program.

College Football Supply & Demand Chart

Because there are only a certain number of seats per stadium and several thousands of people want the tickets, why not sell the tickets for ridiculously high prices? The demand for college football tickets has nearly doubled or even tripled the supply per stadium. Even though schools are constantly looking to enlarge the size of their stadiums to compete in the arms race, there are those who are aware that the value of donations is based on how hard it is to get in to the stadium. When the demand outweighs the supply, wouldn’t you raise the price of the product too?

Supply and Demand is an area of economics that very much interests me. If supply is high yet demand is low and if demand is high yet supply is low then there is a problem that needs to be solved. Very rarely is there equilibrium between supply and demand, and that is a very fascinating aspect of economics. In economics, there is always a problem that needs solving.


Tennessee Head Coach Philip Fulmer Picture: http://www.wrcbtv.com/story/20250698/ex-vols-coach-fulmer-entering-hall-of-fame

College Football Supply & Demand Chart: http://www.teamspeedkills.com/2013/1/23/3904466/has-college-football-peaked

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