Gene Smith: ticket price increases needed to sustain Ohio State athletics

Ohio State has one of the seven athletic departments in the country that pays for itself, and athletic director Gene Smith said in an interview with The Lantern that maintaining that status doesn’t come easy.

“We are one of the few self-sustaining programs in the country, and we want to stay that way,” Smith said. “We get no tax dollars, no general fund dollars, no student fees.

“We try our hardest to make sure that we are sensitive to the pricing and the marketplace, but in order for us to continue to strive for excellence and have winning programs and take care of the responsibilities that we have, ticket prices are one of our largest revenue streams.”

The Board of Trustees approved men’s football and basketball ticket price increases Friday. The public football ticket price will be $79 starting next season, a $9 increase, while student ticket prices will increase by $2 to $34.

Men’s basketball ticket prices for conference games will increase by $6 to $46 for public personal seat licenses and lower bowl tickets, and by $4 to $22 for public upper bowl tickets. Faculty and staff tickets for home games will also be increased by $4.50 for lower bowl tickets and $3 for upper bowl tickets, while student tickets will be increased by $1 for all seat locations.

Additionally, OSU is implementing “Premier Game” pricing for both sports. Up to two home football games will be designated as Premier Games each year, with public tickets for two games increasing up to maximum prices of $125 and $150, or for one game up to a maximum of $175. Student ticket prices will not be increased for Premier Games.

For the 2013 football season, Smith said the Sept. 28 contest versus Wisconsin will be the only Premier Game, and will be priced at $110 for the public.

Smith said that OSU decided on only one Premier Game next season, at a price lower than the maximum, in order to ease into the new pricing model.

“We knew Wisconsin is an exciting contest for us, particularly over the last six years,” Smith said. “I’m hopeful that that’s a night game … that adds another level of excitement, and the length of time people are (at Ohio Stadium).”

In the future, Smith and OSU’s Athletic Council will decide the following season’s Premier Games during the week following the Big Ten Football Championship Game, Smith said. For 2014, Smith said OSU’s home game against Michigan will be a Premier Game, but said that no decision on whether there will be a second game has been made yet.

“You never know who else might pop up,” Smith said. “We play Virginia Tech at home (in 2014). I don’t want to say that that’s a gimme … because there might be some other conference game that emerges, and I don’t know what our conference schedule will be because it may change since we’re trying to roll in Maryland and Rutgers.”

The University of Maryland and Rutgers University are joining the Big Ten in 2014.

For men’s basketball, up to five conference or non-conference games will be designated as Premier Games. Public ticket prices for those games will be $47 for personal seat licenses, $46 for lower bowl tickets and $25 for upper bowl tickets. Faculty/staff lower bowl tickets will be increased to $37 and upper bowl tickets to $20, while student tickets will be $13 for Premier Games.

Smith said decisions on Premier Games for basketball will be made each July and August.

Although the football team is coming off a 12-0 season, and men’s basketball went to the Final Four last season, Smith said the ticket price increases were not decisions made based on the teams’ spikes in success and instead fall in line with the athletic department’s long-range financial plan.

“This (ticket price increase) is not something that we just started like two months ago,” Smith said. “The Athletic Council spent all of last year studying and discussing this issue, because we projected that we would be here, where we would need additional revenues to maintain our self-sustaining status and not end up going in the red.”

Smith said he is optimistic that the new ticket price structures will be in place “for a while.”

“We feel pretty good about it,” Smith said. “I can’t give you a year, I really can’t, but we feel good and hopeful while we do have some additional revenue streams that are lurking that we can’t project.”

Smith said additional sources of incoming revenue include the college football playoff system, which is to begin for the 2014-2015 season, and a new television deal with the Big Ten Conference when the current contract expires at the end of the 2015-2016 season.

Smith said the move to dynamic pricing for football and men’s basketball tickets is in line with the national landscape.

“We decided that we’d venture into it along with this price increase and recognize that there’s certain games that are Premier Games,” Smith said.

In addition to the ticket-price increases, membership fees at the OSU Golf Club are also set to increase by 1.5 percent for alumni and affiliates, faculty and staff, student and affiliate family membership categories.

According to figures Smith provided, direct revenues from football and men’s basketball plus golf course fees make up roughly 53 percent of the athletic department’s total revenue of about $132 million.

Smith said direct revenues from football are slightly more than $52 million, while men’s basketball revenues are slightly more than $14 million. Golf course revenues are about $3.9 million.

Smith said direct revenues do not account for a number of revenue sources, including OSU’s contracts with Nike and IMG, Buckeye Club revenue and some sponsorship money.

According to USA Today’s athletics departments finances database, OSU was one of only seven Division I college athletics programs that was self-sustaining in 2011, the database’s most recently updated year. In that same year, only the University of Texas had a larger athletics revenue than OSU.