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Sending $114,000 to DeSoto County: The Economics of Brad Paisley

Country recording artist Brad Paisley is performing in concert at the Lander’s Center, in Southaven, Mississippi on January 22, 2015. Based on information obtained from the venue's website, tickets appear to be selling well for the event.  Adding in the fact that the Memphis / Mid-South region is a strong walk-up market; the show should be a sell-out.

A sold-out show of 7,964 patrons would generate a total box office (including service charges) of $394,502.40, which in turn, results in sales tax collected of $36,491.47 (TABLE TWO).  Adding in parking fees, venue rental fees, venue merchandise percentage fees and sales tax charged on merchandise sold, the State of Tennessee and City of Memphis stand to lose almost $114,000 (TABLE ONE) to DeSoto County due to a closed Mid-South Coliseum. For total revenue lost calculations, venue concession sales were not considered.

Attendance totals were derived from calculations using Ticketmaster ticket sales maps for applicable venue.

The University of Memphis Tiger football program charges $20 per car for parking at the Fairgrounds. Using an estimate of four people per car, a parking fee of $40,000 would be generated for the Brad Paisley concert.

An applicable venue normally collects a negotiated percentage of artist merchandise sold during the performance. State and local sales taxes are also charged on the merchandise sold. Percentage collected on merchandise sold at arena-sized venues generally ranges from 15% – 35%. The Wall Street Journal has stated that country star Kenny Chesney generates $8 –  $12 per head on merchandise sold. For the Brad Paisley concert, a 25% merchandise fee and $8 per head sales amount will be used for calculations. This equation would generate $15,928 in venue merchandise fees and $1,473 applicable sales tax.

The venue also charges the concert promoter a rental fee and in some cases, a variable percentage of the total gross tickets sold. The average cost of renting a arena-sized venue is $20,000.
 

How long will the City of Memphis allow revenue that would normally go to the Mid-South Coliseum to flow to either the Lander's Center or Snowden Grove in Mississippi?

 

 
TABLE ONE:  
 
Sales Tax Collected 36,491.00
Parking Fees 40,000.00
Venue Rental 20,000.00
Merchandise % 15,928.00
Merch Sales Tax 1,473.00
 
Total 113,892.00
 

 

TABLE TWO:

 
Arena Total     Calculated
Section Seats Price Fees   Total
       
Pit 1 70 57.50 12.35 4,889.50
Pit 2 70 57.50 12.35 4,889.50
Floor 1 356 40.00 12.35 18,636.60
Floor 2 220 40.00 12.35 11,517.00
Floor 3 220 40.00 12.35 11,517.00
Floor 4 215 40.00 12.35 11,255.25
Floor 5 215 40.00 12.35 11,255.25
104 207 40.00 12.35 10,836.45
105 376 40.00 12.35 19,683.60
106 384 40.00 12.35 20,102.40
107 376 40.00 12.35 19,683.60
108 237 40.00 12.35 12,406.95
109 163 40.00 12.35 8,533.05
110 164 40.00 12.35 8,585.40
111 203 40.00 12.35 10,627.05
112 64 40.00 12.35 3,350.40
113 203 40.00 12.35 10,627.05
114 164 40.00 12.35 8,585.40
115 163 40.00 12.35 8,533.05
116 237 40.00 12.35 12,406.95
117 376 40.00 12.35 19,683.60
118 384 40.00 12.35 20,102.40
119 376 40.00 12.35 19,683.60
120 207 40.00 12.35 10,836.45
205 165 30.50 12.35 7,070.25
206 256 30.50 12.35 10,969.60
207 165 30.50 12.35 7,070.25
208 172 30.50 12.35 7,370.20
209 136 30.50 12.35 5,827.60
210 122 30.50 12.35 5,227.70
211 88 20.50 12.35 2,890.80
212 112 20.50 12.35 3,679.20
213 88 20.50 12.35 2,890.80
214 136 30.50 12.35 5,827.60
215 136 30.50 12.35 5,827.60
216 169 30.50 12.35 7,241.65
217 177 30.50 12.35 7,584.45
218 215 30.50 12.35 9,212.75
219 177 30.50 12.35 7,584.45
       
Totals: 7,964.00     394,502.40
       
       
Tennessee Sales Tax Lost   ($36,491.47)