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Success in Year t, Greater Demand in Year t+1

2008 July 9
by Phil Miller

Two things are well-known among sports economists.

  1. Ticket prices do not drive team performance. In other words, when a team says it must raise ticket prices to become/stay competitive, you should detect a whiff of stinky sulfur.
  2. When a team performs well in one year, especially when the performance is unexpected, it faces a higher demand curve the following year, all else equal. This results in higher ticket prices and in the following year.

The Missouri and Kansas football programs provide a nice anecdote.

In sports, winning sells, especially the year after.

When a team posts a better-than-expected season, the financial rewards through ticket sales typically follow in the next calendar year.

So it should be at Missouri and Kansas, both on a record season-ticket sales pace with football programs coming off 12-victory seasons and high-profile bowl triumphs.

With that kind of wind in the sails, the schools haven’t needed to launch major ticket-selling campaigns.

…In 2007, KU set an attendance record, averaging 46,784 for seven games at Memorial Stadium. That happened with a record 31,000 season tickets sold.

The Jayhawks expect to top those marks this year, even with an increase from $275 to $300 for a full-priced season ticket. Priority seating goes to donors of the Williams Educational Fund, and that’s where associate athletic director Jim Marchiony said the school is seeing growth.

…Last season, the Tigers averaged 60,232 and sold about 34,000 season tickets. Earlier this month, MU had renewed 90 percent of its season tickets.

“That’s a figure we’re used to seeing in August,” Grinch said.

Missouri also had 3,500 new season-ticket accounts. When it’s added up by the Sept. 6 home opener, the Tigers should easily surpass the season-ticket record of 34,800 set in 2004.

Cross-posted at Market Power

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