Three Stocks to Invest in “Swiftonomics” Coming to Canada

Taylor Swift’s six Canadian concerts could bring an economic bump – and these stocks are set to benefit.

Vikram Barhat 16 August, 2023 | 4:15AM
Facebook Twitter LinkedIn

Taylor Swift

Canada is currently swept up in a tidal wave of Taylor Swift mania. Branded as "Swifties," ardent fans of the global pop sensation are fervently waiting for her upcoming tour scheduled for November 2024.

These loyal enthusiasts are proving their dedication not only by purchasing tickets but by demonstrating a remarkable willingness to invest substantial sums and travel great distances to attend Swift’s six highly anticipated Canadian concerts.

This unrivalled intersection of entertainment and economics has even spawned a new term, ‘Swiftonomics,’ referring to the economic bump her concerts provide to countries and regions where she performs. The following stocks may be suitable options for any Blank Space in your portfolio as the primary beneficiaries of Swiftonomics when she brings her music carnival to Toronto next year.

 

The largest live entertainment firm in the world with over 670 million fans across 48 countries, Live Nation (LYV) controls over 338 venues through owning, operating, or holding exclusive booking rights. The company owns the popular ticketing platform Ticketmaster, one of the largest ticketing services. 

Ticketmaster is the authorized ticket seller for Taylor Swift concerts. According to an estimate Taylor Swift’s Eras Tour could net US$590 million in tickets, which could provide a significant boost to Live Nation’s revenue.

In 2022, Ticketmaster sold over 550 million tickets for over 9,300 clients and its artist management agencies boats over 400 clients. “This large live entertainment footprint helped Live Nation become one of the largest advertising and sponsorship platforms aimed at music fans,” says a Morningstar equity report.

Apart from primary sale, Ticketmaster site also facilitates the resale of concert tickets, thus generating additional revenue from fans and music lovers.

Live Nation reaped the rewards of the continuous surge in demand for live events, clocking a second-quarter revenue jump of 27% year over year. The company has already soled over 117 million tickets to date for shows, up 20% from 2022 sales at the same point. “Despite the relatively weak global ad market, over 90% of the planned sponsorship for 2023 is already booked with double-digit growth,” says Morningstar equity analyst Neil Macker, who puts the stock’s fair value at US$105.

 

Canadian telecom giant, Rogers Communications (RCI.B) boasts more than 10 million wireless subscribers, about a third of the total Canadian market. Wireless business accounts for more than half of total revenue while its cable segment drives about 40% of total revenue after acquiring Shaw.

Remaining sales come from Rogers' media unit, which includes television and radio stations and the Toronto Blue Jays. Rogers' significant exposure to sports and entertainment includes ownership stakes in the Toronto Maple Leafs, Raptors, FC, and Rogers Center.

Swift will be playing all six Canadian shows at the Rogers Centre next November. Rogers could expect a significant revenue from Rogers Centre, which can accommodate an estimated 50,000 fans for each Taylor Swift gig, up to 300,000 tickets in total for her Canadian stint.

In addition to collecting a share of the ticket price, Rogers Center can make additional money by selling Taylor Swift merchandise. According to an estimate, every stop on the Eras tour has the potential to sell as many as 30,000 pieces of merchandise. With an average price of US$80 a pop, this could potentially ring up another US$87 million in total revenue.

That said, wireless remains the crown jewel of Rogers’ business. “With Canada’s policy to keep immigration high, Rogers is well positioned to keep expanding its wireless subscriber base,” says Morningstar equity analyst Matthew Dolgin, who appraises the stock to be worth US$57.

 

Global hospitality heavyweight, Marriott (MAR) operates more than 1.5 million rooms across nearly 30 brands, including Marriott, Courtyard, and Sheraton, its largest brands. Luxury represents roughly 10% of total rooms, while full service and limited service account for about 40% and 50%, respectively.

Hotels in proximity to venues hosting high-profile concerts, such as Taylor Swift’s, might experience increased bookings due to event attendees. According to the U.S. Federal Reserve, the singer's concert tour is providing a meaningful revenue boost for the hotel industry. In fact, a report from the Federal Reserve Bank of Philadelphia went so far as to say, “Despite the slowing recovery in tourism in the region overall, one contact highlighted that May was the strongest month for hotel revenue in Philadelphia since the onset of the pandemic, in large part due to an influx of guests for the Taylor Swift concerts in the city.”

This could be good news for downtown Toronto hotels, especially the Toronto Marriott City Centre Hotel, which is located inside the Rogers Centre. With rooms overlooking the concert arena, it could get a large slice of the action.

“In the past few years, Marriott has renovated a meaningful percentage of core Marriott and Courtyard hotels, and since 2007, has added several new brands, which support our constructive stance along with a favorable next-generation traveler position,” says Morningstar equity analyst Dan Wasiolek, who recently increased the stock’s fair value to US$190 from US$184, due to higher 2023 demand.

Facebook Twitter LinkedIn

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Live Nation Entertainment Inc93.25 USD2.25Rating
Marriott International Inc Class A248.94 USD2.30Rating
Rogers Communications Inc Shs -B- Non-Voting61.68 CAD0.57Rating

About Author

Vikram Barhat

Vikram Barhat  A Toronto-based financial writer specializing in investing, stock markets, personal finance and other areas of the financial services industry, Vikram also writes for CNBC, BBC, The Globe and Mail, and Toronto Star.

© Copyright 2024 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy       Disclosures        Accessibility