Sporting success, ticket prices, merchandise sales – and looking into the case of college football

Yesterday, I read an interesting post by Jesse Lawrence (more information about Jesse Lawrence, click here) about the emotional capital tied to collegiate athletics and how that corresponds with the balance between ticket prices, merchandise sales and sporting success.

Simplistic and frequent (and often honest) simplifications and considerations in reference to business models in elite sports delve into how sporting success results in money-making triumphs. That is often the case but when comparing collegiate athletics with professional sports (especially in relation to major sports teams and leagues, e.g. English Premier League, NFL, NBA, MLB), reality depicts that sporting success is not a compelling necessity in order to enhance ticket or merchandising revenues.

The TiqIQ Top 25 (founded by Jesse Lawrence) explores the correlation between sporting performances and ticket prices as well as the correlation between ticket prices and merchandise sales. This assessment has indicated that the most expensive tickets on the secondary market do not necessarily correlate with on-field success. The Associated Press (AP) provides frequent (weekly) rankings of the top 25 NCAA (governs most collegiate athletics in the US) college football teams. This ranking is based on the opinions of sports journalists across the nation via a scenario where each voter offers his/her own ranking of the top 25 teams. A compilation of these votes leads to the national ranking. In contrast, TiqIQ Top 25 measures college football home game ticket prices on a weekly basis. Looking at these rankings, it is interesting to conclude that of the top 5 teams in the TiqIQ Top 25, two of these teams are not even ranked in the AP Top 25 ranking. When investigating merchandise sales, Sport Business Journal’s (SBJ) ranking suggests that there is a positive correlation between sporting success and merchandise sales if Alabama (no. 1 in the AP Top 25) is the indicator. Though, in general there are several teams from SBJ’s ranking, which are not present in the AP Top 25 while the TiqIO Top 25 presents a different picture with a more positive correlation between teams, which are in high demand (ticket prices), and teams with a good ranking in terms of merchandise sales*.

Texas A&M with the ‘staging’ of Johnny Football a.k.a. Jonathan Paul Manziel  as quarterback has done well to convert the demand for merchandise and tickets into essential revenue streams. Johnny Football has been an important asset capable of influencing the program’s commercial success through excellent performances, which includes individual performance-records and winning the Heisman Trophy as a freshman. The latter is an example from college football where sporting success meets enhanced merchandise sales and ticket prices.

KEY SUCCESS INDICATORS (source: SBJ):

Biggest year-over-year merchandise sales growths during the 2012 college football season:

Primary source: www.Fanatics.com

Biggest licensed merchandise sellers from July through September:

Primary source: CLC

Interesting numbers:

*Still, readers must keep in mind that this measurement is not 100% valid given the fact that there are also gaps between the teams, which are present in the TiqIQ Top 25  and the SBJ ranking.

Additional Sources:

AP Top 25, for more information click here.

Sport Business Journal, for more information click here.

TiqIQ Top 25, for more information click here.