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Tennessee’s ‘talent fee’ isn’t surprising. In business, you charge what people will pay

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Tennessee’s ‘talent fee’ isn’t surprising. In business, you charge what people will pay

If there is one constant in the circle of life that is big business, it’s that cost increases will always be passed on to consumers. Doesn’t matter if it’s food, gas or tickets to sporting events. The paying customer will almost certainly be asked to make up the difference.

The latest example came Tuesday, when the University of Tennessee announced an average increase of 14.5 percent for football tickets in 2025, with 10 percent earmarked for athlete compensation. The news should not have come as a surprise to anyone. It was as inevitable as a sunrise.

Once the courts cleared the way for athletes to be paid for their name, image and likeness, followed by the NCAA reaching a tentative $2.78 billion settlement in the House antitrust case — the agreement provides reparations to former athletes, creates a new revenue-share model for schools, and increases the number of scholarships in various programs — the public was always going to receive the bill.

GO DEEPER

Feldman: Why Tennessee picked an opportune time to raise ticket prices

That’s how it works in big business, which college athletics certainly is. Overpaid executives and administrators rarely absorb the pinch themselves, even if it’s their actions or inactions that create the problem. And, make no mistake, it was the NCAA’s arrogance and inertia a decade ago after losing the Ed O’Bannon class-action suit that set the stage for today.

It’s not only why Tennessee is being proactive. So is Georgia, the 2021 and 2022 national champions. The Bulldogs are increasing the price of reserved seats from $490 to $560 per ticket, while also raising the cost for nonconference games from $55 to $80. The minimum donation requirement per ticket to the Hartman Fund, which funds athletic scholarships and associated costs, also is rising.

Georgia may not call these a “talent fee,” as Tennessee does, but that’s precisely what they are. And they can do it because they know they have a rabid fan base that will pony up. It was no coincidence when Tennessee athletic director Danny White disclosed the Volunteers have a waiting list of 15,000 fans.

Don’t want to pay the price increases? Cool, next man (or woman) up.

That attitude is not limited to big-time college athletics. Iterations of it can be seen across the sporting landscape, like in the WNBA, where a dramatic rise in popularity and viewership — thanks in part to an outstanding rookie class led by Caitlin Clark and Angel Reese, whose teams rank Nos. 1 and 2 in road attendance — has resulted in dramatic increases in ticket prices for next season.

The Chicago Sky, for instance, will raise some seats by as much as 265 percent, while the New York Liberty are increasing some packages by 155 percent, although the team says it will cap the increase at 25 percent for longtime season ticket holders. In Phoenix and Atlanta, some of the more “affordable” seats are being reclassified as club seats, which come with a higher price tag.

None of this is surprising, of course. But the risk of angering or alienating longtime supporters of a league that has yet to turn a profit is real, experts contend. One of them is Impact Pricing CEO Mark Stiving, whose business trains companies on how to raise prices without losing customers.

“There’s two sides to the story,” he told me. “One is from the fan side and one is from the company business side. The business says, ‘We’ve struggled forever. We’ve never been able to get people in seats. It’s awesome. We suddenly have this popularity. We’ve got more demand, so we’re in a position to raise ticket prices dramatically.’ They can do that and they’re going to make a ton of money. The problem they’re going to have is, if conditions change again, and they go back to the way they were before the conditions are now, they will have pissed off all their fans. No one is going to pay $4,000 for a season ticket, and the people who used to pay $750 will no longer buy tickets, even if it comes back down to $750. The danger is that you’re trading lifetime value for short-term profit.”

This is the part where I normally project and talk about what should be when dealing with fans/customers who have supported you through the lean years. Stiving quickly corrected me.

“There’s no such thing as ‘should,’” he said. “If you believe in capitalism — and that’s what makes our economy go — then people charge what other people are willing to pay. … Companies are always trading off their image and their profit. They don’t want to be seen as, ‘I’m gouging my customers and I’m raising prices dramatically.’ But I have a feeling that these guys are in a position where they say, ‘Hey, for the first time I’m in a position to make some money, so let’s go make some money.’”

Multiple attempts to discuss this delicate dance with the WNBA were unsuccessful. The players association declined to comment.

While not apples to apples, comparisons can be drawn between the WNBA and college football. You don’t have to scroll deep in the comments section to find fans who claim Tennessee has priced them out of the in-game experience. They’re angry and vocal — understandably so. But here’s what Volunteers leadership knows: The university is among a relatively small group of power conference members whose roots are so deep in the community that their fans will reach for their wallets with one hand while holding their noses with the other. They will pay the gratuity up front. After all, it’s part of the circle of life in big business.

(Photo of coach Josh Heupel celebrating with fans after Tennessee defeated Alabama 52-49 at Neyland Stadium in 2022: Donald Page / Getty Images)

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