Football schools were early adopters of the two part pricing scheme as a method of generating revenue. Actually, the schemes used in ticket pricing are a bit more complicated than simple two part pricing, since they separate demand types by intensity, in addition to capturing the surplus associated with high value buyers though the fixed charge.
This surplus is in the range of $10m or more for top programs. Here are figures from 2005 for the University of South Carolina, as reported in The State. Listed below are the different membership levels in the Gamecock Club, the fee for the right to buy tickets, and the number sold.
- Golden Spur: ...$15,000 / 218
- Silver Spur: ......$3,000 / 1,321
- Full Scholarship: $1,350 / 3,761
- Half Scholarship: .$ 650 / 4,160
- Roundhouse: ......$ 350 / 3,294
- Century: ...........$ 150 / 2,650
- Other: ................$0 / 2,590
These figures indicate that the top three levels alone generate over $12m, most of this being fees for the mere right to buy tickets. Add the next three levels and you cross the $16m mark. Not bad!
Nevertheless, schools can spend money by the truckload, and the Gamecock Athletic Department has a deficit of $5m over the last two years. So whatever they're raking in, apparently it is not enough.
In its search for additional revenue, South Carolina appears to have an eye on developments at Auburn. The State reports that Auburn's new premium ticket-pricing scheme is expected to raise an additional $3.2 to $3.5 million. But adopting such a scheme means reassigning ticket priorities, which is a tricky issue: the tradeoff between current revenue and fan loyalty is not easy to assess. If you fail to win, the Johnny-come-latelys will desert you, and the displaced loyal fan might not come back.
Here's a listing of the benefits that come with membership at each level in the Gamecock Club, and the lead story which discusses the problem of allocating seats between high revenue buyers and long term loyalists.