On Friday, Inc.com published a story that claimed Taylor Swift will end up "$6 BILLION RICHER" when her "Eras" tour ends. That is a whopper of a headline, but is it true? If so, she'll end the tour as the fourth richest celebrity in the world with a net worth of $6.8 billion. She'll be behind only Steven Spielberg ($8 billion), Jami Gertz ($8 billion) and George Lucas ($10 billion).
The Inc.com article was written by someone named Peter Cohan. Peter is an associate professor of management at Babson College, and according to his Twitter bio, a "Management consultant… angel investor, columnist, book author and RETHINK Retail Top 100 Retail Influencer of 2021 and 2021." His website describes his business, Peter S. Cohan & Associates, as a "strategy consulting and venture capital firm… [that]… helps corporations identify, evaluate and profit from new business opportunities created by changing technology."
Over the weekend, Peter's $6 billion headline (which was variously repeated as $4 billion) made waves across the web. TMZ and even the Washington Post repeated the numbers in respective articles. And just to be clear, Peter (and the repeated articles) aren't saying that her tour will generate $6 billion in value and revenue across the world from all sources for all the cities she visits. Peter believes Taylor will literally end up $6 billion richer personally from the tour.
Here's a quick bulleted summary of how Peter calculated that Taylor will "net" $6 billion from the "Eras" tour:
- Concert Ticket Sales = $4.1 billion
- Merchandise = $1.8 billion
- Era Movie Ticket Sales = $113 million
Are these numbers accurate? In my opinion, NOT EVEN CLOSE. But we'll examine the math in each category, and feel free to jump to the very bottom of this article if you want a more realistic estimate of Taylor's total net earnings from the Eras tour.
(Photo by Mat Hayward/TAS23/Getty Images for TAS Rights Management)
Concert Ticket Sales = $4.1 billion
Peter assumes the average ticket price is $456 and that the average venue has a capacity of 72,459. Over the 146 total planned concerts that would work out to $4.8 billion. However, and this appears to be a huge flaw right off the bat, Peter seems to be using after market ticket prices in his calculations NOT face value ticket sale prices. As in, he's assuming Taylor gets the money tickets sell for after market on a site like StubHub. In my opinion, this is a huge miscalculation. Taylor only makes money on the face value ticket sales sold by Ticket Master. Her face value prices ranged from $49 to $499, before Ticket Master takes a cut.
Also, how do we go from $4.8 to the above $5.1 billion? Peter takes, what I consider to be an extremely wild leap assumption. He states that her promoter will pay her 105 percent of the $4.8 billion in ticket sales. Why? Because according to a different professor from a different university, her promoter should be happy to pay her more because the promoter does not have to assume any risk that her concerts will not sell out.
Look, Taylor Swift is powerful. But is she powerful enough to demand a promoter pay her 105% of gross ticket sales? Just speaking this all out again. Peter assumes that there will be 146 total performances. This is correct. He then assumes that Taylor was able to cajole every single venue (or several promoters that control multiple venues) into paying her 105% of AFTER MARKET average ticket resale value. In my opinion, this is so so so far from accurate.
And then to go from $5.1 to final net number, $4.1 billion, he assumes Taylor's tour expenses take away 20%.
As a counter point, consider the math used by Forbes Staff in an article in late June, just after the Eras tour had wrapped 22 performances. At that point, Forbes estimated that over 22 performances, Taylor sold $300 million worth of tickets. That's an average of $13.6 million per night. Assuming average attendance of 72,000, that's an average ticket price of $189.
By Peter's math, Taylor would have "netted" 105% of $300 million, aka $315 million. How much did Forbes estimate Taylor netted off $300 million in ticket sales? $30 million:
Forbes estimates Swift has grossed nearly $110 million from these performances so far, after paying concert promoter Messina Touring Group and production costs. But that's not what she'll personally deposit in the bank. She still has to pay taxes and expenses, like for her manager, publicist and agent. When the bills are paid, Forbes estimates she has earned roughly $30 million.
According to Forbes, Taylor is grossing 36% of her ticket revenue ($110m/$300m). Forbes believes Taylor is netting 10% of gross sales.
Furthermore, Peter continually says Taylor is going to "net" XYZ amount. This should be obvious, but GROSS AND NET EARNINGS ARE NOT THE SAME. Net earnings for an individual is after managers, agents, lawyers, private jets, food… and taxes.
As one final counter point to the ticket sale math, consider this: Taylor's 2018 Reputation Stadium Tour grossed $345 million off the face value tickets for 53 shows, for an average ticket price of $119.
Merchandise = $1.8 billion
Peter assumes every single person who attends the Eras tour will spend $252 on merchandise. $252 multiplied by 9 million attendees equals $2.27 billion in gross sales. He then assumes Taylor keeps 80%, which is $1.8 billion.
I don't know where he gets the $252 number, but again it appears to be very far from reality. As a counter point, back in late June when the first 22 performances wrapped, the Wall Street Journal calculated that Taylor was selling $2 million worth of merchandise per night. Over 146 performances, that would work out to $312 million in total gross revenue. That works out to the average attendee spending $35 on merchandise.
Era Movie Ticket Sales = $113 million
I have no problem with this math. In fact, on Thursday I landed on a similar number after speaking with a few industry sources close to her AMC deal.
Peter ends his article with this line:
"Add it all up, and the Eras Tour could make $6 billion richer."
As the Washington Post reported, that would be enough to send everyone in the United States a little over $17. But remember, even without the potential flaws I’ve pointed out above, if Taylor truly grossed $6 billion, that would make her roughly $3 billion richer.
How Much Will Taylor Swift Actually NET From The Eras Tour?
Using an average revenue per concert of $13.6 million, over 146 dates, that works out to $2 billion in gross ticket sales. Using Forbes' math, Taylor's gross take would be 36%, which is $720 million. After taxes and all fees, according to Forbes her final net take would be 10% of $2 billion, which is $200 million. Let's assume even that is too conservative and Taylor instead nets a little less than half of her gross. That would be $350 million.
Let's assume $312 million in gross merchandise sales, based on $2 million average per night across 146 nights. If Taylor keeps 80% of her merch sales, that works out to $250 million. Let's again cut it in half for taxes to land on $125 million.
And finally, let's go nuts and assume the Eras movie is a MASSIVE blockbuster and instead of making $113 million, she makes $200 million. After taxes that’s $100 million.
Total it all up:
- Concert Ticket Sales = $350 million
