Are stars like Beyonce, Taylor Swift, and Bruce Springsteen engines of inflation?
Surging ticket prices are causing economists to question just that, as some of the biggest live acts in the world tour this summer. According to Reuters, recreation and culture prices rose nearly 7% between May of 2022 and the same month this year, the fastest rate in three decades – “particularly admission fees to live music events.”
In the U.S., the inflation rate for admission events is trending at 2.6 percentage points above the headline U.S. inflation rate, a gap that has only increased of late as the headline inflation figures have cooled.
For consumers, the cost of getting in to concerts, shows, and sporting events has been climbing for years, particularly post-COVID. Companies like Live Nation Entertainment have increasingly sold artists on the use of surge pricing systems like “platinum” and “dynamic” ticket pricing, making what had once been the least expensive seats cost the same as what had once been the most expensive seats – all while claiming the entirety of the problem is ticket resale.
“People are willing to splurge because they know they will get quality content, plus who knows when or if she’ll do another tour after this one,” said London-based Beyoncé fan Mario Ihieme.
Live Nation Entertainment CEO Michael Rapino, who was recently slammed by shareholders of his own company for the enormous salary and bonuses he and other executives were paid in 2022, recently said that ticket sales have risen by 41% in the past year, while prices are up by double digits. The surging price has made the world’s largest entertainment promoter flush with cash, reporting record-shattering earnings for much of the last two years.
Beyonce’s tour in particular has been cited as a factor in the inflation rate in at least one country, as it began in Europe before it heads to North America later this year. Bruce Springsteen is also touring Europe at the moment in between North American tour legs, while Taylor Swift’s Eras Tour is finishing up in North America and ready to head international after August.
🇸🇪 Beyonce's start of her world tour in Sweden seems to have coloured May inflation, how much is uncertain, but probably 0.2 p.p. of the 0.3 p.p that hotels/restaurants added. Perhaps also hiked concert ticket prices (recreation). Otherwise as expected.
— Michael Grahn (@MichaelGrahn1) June 14, 2023
Andy Gensler of Pollstar, an industry trade publication owned by entertainment giant Oak View Group, says it is a “ridiculous assertion” that concerts would have such an impact on inflation.
