SeatGeek reports that in 2019 NBA and NHL buildings hosted on average between 80 and 90 third-party events. It’s believed that those same venues (at least the ones with just a single team) could book as many as 160 shows in 2022 as artists/athletes/entertainers—and the pro sports teams that own or operate the buildings—all look to make up for the revenues lost over the last 18 months. One senior live event industry insider (who asked to remain anonymous) said the number of booking inquiries and “soft commits” that pro sports venues have received in recent weeks “is a multiple more than what they have received in the past.” Eventellect co-founder Patrick Ryan said he has been hearing the same, projecting 2022 would be a “record-setting year for [live entertainment] tours.”
Our Take: The term “third-party events” refers to more than just major music concert tours. In fact, the majority of the shows booked at Big Four venues are family-oriented (think: Disney on Ice, Sesame Street Live) or sports-centric (think: Harlem Globetrotters, boxing or professional wrestling).
There is likely to be a record number of third-party events held in 2022 because performers are eager to go on the road again and maximize their earnings. As Ryan explained: “Many artists released new music during the pandemic. But it is common knowledge that streaming has diminished arts revenue, and touring has become more lucrative than ever. So, while there is pent-up demand for concerts, the artists truly have a pent-up need to generate revenue.” Our unnamed insider likened the industry’s current status to airplanes on a runway awaiting takeoff: Expect the flood of events to begin late in Q1 2022 and continue steadily throughout the remainder of the year.
While music artists, athletes (like high-profile boxers) and other entertainers are all financially motivated to tour again in 2022, the sports teams that own or manage (and derive revenue from) their venues are equally incentivized to fill available calendar dates. The pandemic cost pro sports teams billions of dollars, collectively, and third-party events can be a meaningful line item for them. For perspective, a small show in a lesser market might generate $50,000 or $60,000 in profits for the team. That figure could rise to as much as $300,000 for a bigger arena tour. It’s possible a large-scale event, at an NFL stadium in a major metropolitan area, could add $1 million to the bottom line on a single night.
Teams that own or manage their building can rent it out to an event promoter (think: flat fee, no upside) or co-promote the show, assume some of the risk and share in any upside that exists (think: concessions, parking, merchandise and ticketing fee revenues). Cowboys director of events Delanie Foley said: “At [AT&T] stadium, all of our deals are a little bit different, we rent the venue, we take risk, we buy events, we make guarantees etc. There are also a lot of factors that go into driving big revenues—expenses are continuing to rise because of COVID as well, but factors such as the length of the event, the crowd (family friendly vs. couples night out), the demographic, the event itself (people sit in their seats the entire time to watch soccer vs. concerts with intermissions), etc…”
If one were to look at a local arena’s schedule of upcoming third-party events right now, one would likely be underwhelmed. But the relatively bare schedule that exists today is simply a reflection of the challenge bookers currently face given that the 2021-22 NBA and NHL schedules are not yet set in stone. Bookers can’t lock in third-party tour dates until they know for certain when the home team(s) will be playing. Artists have also been hesitant to place tickets on sale with COVID-19 limitations still in effect. Harris Blitzer Sports & Entertainment EVP of entertainment Sean Saadeh said he foresees the announcements “starting to ramp up in the coming weeks.” For the record, Prudential Center has already received “twice as many concert confirmations [for February 2022] as compared to our normal confirmations in years past during the same month.”
It’s fair to wonder if an abundance of live entertainment will result in a soft market, ultimately forcing fans to choose which they attend. “Not every artist will feast,” Ryan said. “With the increased competition for consumer dollars, there will be some acts that miss the mark if they don’t have the right pricing and marketing strategy.” For the record, he suggested artists “do more bundling of merch and concessions with the ticket” to distinguish themselves in a crowded market.
But not everyone believes that having a plethora of entertainment options will tank prices. Our unnamed live event insider foresees pricing and demand being “very high.” While a venue might hold multiple shows each week, he reminds that each show largely will target a different audience (all of whom have been waiting eagerly to attend live events again) and that by and large, consumers are well-positioned financially in a post-pandemic world (so they have money to spend on entertainment).
Artists/athletes/entertainers looking to recoup some of the revenue lost during the pandemic could actually be inclined to raise primary market prices and/or play in larger venues (see: Canelo Alvarez’s most recent fight at AT&T Stadium). Expect a record number of NFL stadium tour dates to be played in 2022.