MR. TITO: The Economics of Higher Ticket Prices for WWE’s WrestleMania 41 Event in Las Vegas
Right now, everyone is complaining about the HIGH ticket prices for Wrestlemania 41 in Las Vegas, NV as indicated by this story and many other threads all over social media. Ticket prices appear to have recently jumped from $950 for the cheapest seat to $1,600 and sometimes upward to $1,900. By the way, those will be the seats that will having you signing “Blinded by the Light”, too, thanks to the absurdly right lights above the ring to help make the television product look great.
My simple advice to those who are complaining about high ticket prices… DON’T GO.
Problem solved, end of column…….
BUT, I do know there are dedicated wrestling fans who make Wrestlemania an annual event for them and probably use their work’s vacation time to attend. I understand and respect that.
Unfortunately for that contingency, the WWE has become more popular and has pulled in more consumers. Sadly, your dedication as a wrestling fan hasn’t paid off because the WWE’s recent quality has roped in more casual fans lately.
Furthermore, because the WWE has become more popular lately, they have their “pick of the litter” lately on venues. They are now renting out large NFL football stadiums and not only that, they are getting the cities to PAY THEM in order to host WWE events there.
For YOU, the dedicated WWE fans who have stuck with the brand during the hard times such as the late 2010s… I feel for you. I really do and I would patiently wait until the next time when the WWE decreases in popularly that you hold your ground. “Oh, so now you want the loyal fanbase to keep propping you up? Well, it’s gonna cost you”. Hopefully, you’re ready and willing to cut back on your own WWE spending when they meet their next decline (if that happens).
But let’s talk Economics because it’s a simple lesson as to WHY WWE’s prices have gone up. And it’s not just what has happened lately in the economy, be it actual economic growth (low unemployment, steady GDP, growing wages/salaries, etc) or inflation (too many dollars in circulation, price gouging, energy prices, etc.). It’s a simple lesson regarding how WWE has become more popular since the COVID-19 pandemic ended. In other words, DEMAND has gone up by North Americans to watch and attend WWE events and to meet that larger interest, the WWE is increasing its SUPPLY of more events, more production, and taking on more expensive leases at larger stadiums to handle the higher volumes of willing and able paying wrestling fans or casual fans.
So step into my classroom, kiddies…
LAW OF DEMAND is defined as the indirect, inverse, or negative relationship between the Price that Consumers are willing to pay versus the Quantity Demanded by the Consumer at said price. Another factor that will play into this, too, is how much the Consumer wants this good/service.
For example, Pizza… Everyone loves Pizza. If your local Pizza shop has a “BUY ONE, GET ONE FREE” sale, you are going to buy more pizza. However, if the Pizzeria jacks up their prices per large pizza from $10 to $25, you’re going to buy LESS pizza.
Hence why wrestling fans are complaining about Wrestlemania 41 tickets… Ticketmaster’s dynamic pricing, which is demand driven by the way, jacked up prices from $950 to $1,600. For me, personally, I’m not spending over $200 to attend a wrestling event. So at $950, I’m already out of the game, as WWE priced me out of the equation already. For many other fans, they know how much Wrestlemania tickets cost and Wrestlemania 40 was reasonable for both nights in Philadelphia. Seeing prices jacked up, they are outraged and likely to not attend.
BUT, there are other FACTORS at play here…
There are outside factors that can change a Consumer’s willingness to pay for a good or service, such as:
• Tastes & preferences
• Income
• Expectations or sentiment (confidence in economy)
• Market Size (# of consumers)
• Prices on related goods (complements & substitutes)
Look, I’m NOT going to get into the Presidential debate, but I will state that it’s factual that the Unemployment Rate is currently low (4.1%), millions of jobs have been created, and that income via salaries and wages have increased. Now, I’m not going to deny the hardships out there or those who are working multiple part-time jobs to get by. Furthermore, Inflation’s significant rise has taken bites out of people as seen by high Credit Card Debt and a low Personal Savings Rate at the moment… BUT, there are also people doing really well right now, too, despite the latter few points. If you held your job or switched to a better job lately, you’re seeing some heavy income along with your 401K popping with the stock market booming. With inflation stabilizing, you’re doing really well right now.
That relates to the Income and Expectations component of Demand…
But what about Market Size?
See, that’s the thing about the WWE… They’ve GROWN since the pandemic ended through 2021 from COVID-19. The Bloodline and Roman Reigns caused attendance and merchandise sales to grow significantly while television viewership has increased modestly. However, other forms of metrics such as YouTube or Social Media of WWE’s media from their events has boomed. The whole arc of Rumble to Wrestlemania 41 from 2024 really boomed the WWE and pulled in the WWE with the Rock returning as a villain. Now, the WWE truly has the HUGE MATCH on their hands between a truly realized babyface with Roman Reigns versus the Rock.
WWE, as a brand, is cool again and that’s creating a metric ton of “bandwagon” casual fans who are hopping on to join the experience. Good for them, but I can understand why this can be annoying to WWE Fans.
The Tastes & Preferences part has increased for both loyal and new additional casual fans, which boosts the Market Size component. You now have more American consumers who are chasing WWE products and thanks to higher income and possibly confidence about the economy, WILLING TO PAY MORE than they did years ago for WWE stuff.
And damn, many are willing to pay top dollar to possibly see Roman Reigns vs. the Rock at Wrestlemania 41 in Las Vegas. Holy cow!
BUT all of this sets the side for the other half, the WWE…
Suddenly, they have a GREAT problem of having an increased amount of wrestling fans wanting to attend their live events and buy merchandise… But to cater to this expansion of fans, they need to expand their capital expenditures as well.
WWE needs to:
(a) Rent bigger venues, which are more expensive to lease.
(b) WWE has bigger sets in bigger venues, so more trucks are needed.
(c) More live events, more trucks needed for those as well.
(d) Need for a larger roster, but also a roster who is well compensated to stay.
(e) WWE employee traveling costs, such as hotel, flights, rental cars, meals, etc.
(f) More wrestlers working, more healthcare costs and liability.
However, here is another factor that the WWE deals with… Costs of venue and travel have NOT gone down. While gas prices have stabilized, the parts of planes and vehicles have not. Therefore, purchasing trucks or flying on airplanes have not gone down in price. Furthermore, hotels, arenas, and other places that host events have NOT lowered their prices and have really jacked up prices instead. Anyone who is in the event planning industry knows what I’m talking about, as they seriously count everything from number of chairs to plates to how many staff will be assisting you. Complete nickel and diming game, too.
Thus, when WWE goes to Las Vegas, which has ALWAYS been one of the most expensive places anyway, and then does it during 2024 for a 2-night Wrestlemania, it’s expensive to them. Flying to Vegas is expensive for everyone and little things, such as using an ATM machine in Vegas gets ridiculously expensive. However, Vegas is a fun town and many fans will enjoy the city on Wrestlemania weekend. What could be driving the ticket price stress is that because they are spending so much on Wrestlemania 41 tickets, that may reduce the fun they can have in Vegas on the side. The escort service could suffer, but I think fans will still find a way!
Let’s get back to economics… WWE has a great problem, more consumers of their product. And to satisfy this growing rabid fanbase, they have to expand their operations. In doing so, they have to increase their own expenses… More trucks, more highly paid wrestlers, more catering, more healthcare costs, more more more!!!
Producers typically have a Price model of Price = Costs + Mark-Up, with the mark-up being their area for profit. But to host a Wrestlemania in Las Vegas, the lease on that stadium alone is probably in the millions, alone. UNLV played a college football game in Allegiant Stadium during 2022 that cost them $350,000 for one night. This is the WWE doing 2 nights and doing much more than placing a basketball court and stands in the venue. WWE will have a larger set, have pyro, and significantly more demands for the venue than a college football game would command. UNLV could just re-use the Las Vegas Raiders set-up, whereas WWE is drastically changing it.
LAW OF SUPPLY is defined as the positive or direct relationship between the Price that a Producer is willing to charge for the Quantity Supplied.
In other words, if you want me to supply MORE of my product, it will cost YOU more with our Price.
However, it goes backwards, too… If something is NOT selling, which is why you see sales or clearance sales (hell, going-out-of-business sales, too), then the Price is cut for the purpose to reduce quantity supplied.
Now, Supply has its own separate factors that can influence what the Producer charges as a Price but also how much they supply of the Quantity:
• Technology (making them more efficient through productivity)
• Resource availability (both their income or human/physical capital available, but on the outside affecting them, raw materials or energy availability)
• Market Size (# of producers in an industry)
• Expectations (they are watching the economy, too)
• Taxation, subsidies, and quotas
WWE is infused with technology, check, and that makes them more efficient planning these events and marketing them to consumers. But I would say that WWE’s events have become more expensive to produce with the LED screens on the barricades and on the ring now along with other production costs. I think WWE is confident in the economy, as WWE’s product has shown resilience during recessions and is honestly cheaper to follow than other sports leagues. NFL will drain your wallet, for example.
That 3rd bullet point is interesting… Market Size… Hmmm… With more producers, they could produce more wrestling events and that could create competition to drive prices down. Except, WWE doesn’t really have competition. Yeah, AEW is lurking out there, but they have 1/4 of the audience that WWE has when you add everything up (not just television). AEW is not even close to being a competitor.
Thus, if you’re a wrestling fan in 2024 and you want the very best product, which is clearly WWE now… They’ve got you.
I’m not going to officially declare the WWE as a “monopoly” or a single producer of a good/service who can dictate the prices charged and quantity supplied… But they have that pricing power because they are the #1 game in town.
BUT REMEMBER – Producers who price gouge only do it when they can successfully implement it. They have the consumers out there who have the “Law of Demand” on their side. If you raise prices too much, it scares consumers away.
I GUARANTEE YOU that $1,600.00 per ticket will NOT scare wrestling fans away from attending Wrestlemania 41. Any wrestling fans want to take that on as a bet?
AND if the WWE struggles to sell tickets at that price, they’ll do one of two things:
(a) Lower prices – YEAH RIGHT
(b) Add an attraction.
Do you remember Wrestlemania 32 that happened in Dallas? WWE wanted to push that venue’s capacity and sell up to 100,000 tickets. But they had issues selling more than 50% of that with the show headlined by Triple H vs. Roman Reigns. The excitement just wasn’t there. What did the WWE do? Shane McMahon suddenly returns and now we have Undertaker vs. Shane McMahon at Wrestlemania 32. Then, the Rock suddenly has an appearance.
What I’m just saying is if $1,600 per ticket doesn’t start selling, I’d be willing to bet that the stakes of Wrestlemania 41 suddenly get hot. Maybe, just maybe, the WWE hasn’t fully committed to Rock vs. Roman Reigns yet and are willing to kick that massive drawing match down the road. If WWE sees their ticket sales as sluggish with the high prices in place, then maybe Rock vs. Roman becomes an absolute certainty and we’ll know about it sooner rather than later.
If nobody is buying at the high ticket prices, what what happens with the booking… You’ll get more Rock, for sure, and maybe we’ll get another dream match of Steve Austin vs. CM Punk or something crazy like that. Hey, Brock Lesnar is back!
BUT, I think the demand is there for those high prices and Wrestlemania 41 will sellout. However, I also think that the Rock wants to headline Wrestlemania 41 in the bright lights of Vegas, too, so I think we’re seeing it.
Here’s fantasy booking for you… Rock and Roman will definitely headline Wrestlemania 41 and it shall be over the WWE Title. Rock and Cody will headline Royal Rumble 2025 as the headlining match, while Roman Reigns will win the Rumble match. During Cody vs. Rock, it will be a short match because Randy Orton will turn on Cody and help the Rock win the match. That sets up Cody vs. Randy at Wrestlemania 41 for a huge heated match while Rock and Roman wrestle for the WWE Title.
Wrestlemania 41 is gonna be BIG and they are looking to SMASH all gate records that they actually achieved last year with a cheaper event in Philadelphia.
WWE is gonna get their money and thankfully, you’ll get a great product in return. WWE is on FIRE right now.
That $1,600 price tag? Blame yourself and the growing wrestling fanbase for causing that. Simple economics.
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