Money Matters: Riding The Bull Market Into 2020 (And Beyond)?

The rapid growth, mostly robust global economy and consumer trends has PricewaterhouseCoopers predicting the live music sector alone to pass an annual value of $25 billion by 2023, with a compound annual growth rate of 3.33% between now and then. 

While no one can accurately (or consistently) predict a market downturn or recession, Pollstar wanted to talk to the source of some touring capital to see what the financial industry thinks of the current business climate, what could potentially derail the seemingly endless bull market and what makes the live music business different.

“You can really feel it from all angles in the live space, that it’s really ramping up for this year and it feels like everybody’s got big plans,” says Mark A. Ford, senior vice president at First Horizon Bank’s Music Industry Group. “We’ve got several artist clients kicking off big tours and about to hit the road, and we have a lot of clients in the production space really ramping up as well.”

With things going so well in recent years, Ford says a few things could potentially cause the industry to at least pump the brakes in the near future. 

“I do wonder if we get to a point where ticket prices get so high that people end up re-directing some of those entertainment dollars,” says Ford, whose bank finances tours, festivals, production and transportation companies and more. 

“Fortunately, right now we’ve got such a robust job economy, really across the country, that’s really helped keep up. I think if we do see a downturn in jobs, you may see a sharper decline than what we would hope. It would be a case where people decide all of a sudden that, ‘Hey, $200 for a concert ticket is just too much.’ I think you could lose some of the audience around the edges, honestly.”

A good chunk of that increase in ticket price, which since 2015 has gone from an average of $78.30 to $96.17 (23%) at the end of 2019 of the Top 100 Worldwide tours, can be attributed to inflation, which has risen around 2% in the U.S. over the last four years. And, as any economist can attest, inflation isn’t necessarily a bad thing when controlled. 

“Inflation impacts our business toward the positive just because it’s more flow of dollars to our industry,” Ford says. “Ticket prices are going up quite a bit, it feels like, the box-office numbers for these tours are getting larger every year, and it translates into more dollars moving into the system, which is always good for banks.”

History suggests there will be a downturn – domestic economic recession, stock market crash, some combination of financial catastrophe is inevitable – but that doesn’t mean all business is affected similarly.

“We might be surprised, because even during the financial catastrophe people still attended live events,” Ford says of the Great Recession of 2008. “I was surprised even then, people used live music as a way to get away from problems or whatever they’re facing. I don’t want to say it’s immune to recession, but if we did go into a recession in the live music space it might be self-inflicted,” Ford says, adding, “I hope we don’t as an industry oversaturate the market.”

Noting that things have remained smooth despite any changes in Washington over the last 10 or 15 years, Ford is pleased to see some consensus on Capitol Hill.   

“I think there’s a unanimous consensus in some things that need to be done and the Music Modernization Act passing is a sign of that,” he adds. “Even beyond live, updated licensing and things of that nature, I feel like there’s broad support from both sides of the aisle, and I think that’s good for the music industry.”