The US dollar annual inflation rate, which historically averaged about 2.5% for the last two decades, currently stands at 8.5% but reached a massive 9.1% rate in July — the highest it’s been since 1981. 

These inflation levels can be primarily attributed to the measures taken in response to the pandemic, the war in Europe, and supply chain disruptions from shifts in consumer demand and lockdowns in China. 

Changes in consumer pricing force companies to adjust and raise prices to maintain high margins and continued profitability — usually resulting in decreased demand and consumer discontent.

As a result, millions of products, services, and experiences — including live sporting events — are impacted by the current price rises around the world.

Due to the business structure of live sports events, the most critical components that directly suffer from inflation are tickets and concessions. Changes in consumer sentiment and the reductions in consumer savings and disposable income indirectly impact the growth of sports events.

Sports events have outpaced inflation levels in the past, but these numbers were always close to the actual rate. 

In a hierarchy of basic human needs, live sports entertainment is relatively low. The mix of low consumer sentiment, a recession, and continuously high inflation all have the potential to stagnate the expected growth of live events.

If the current market conditions continue with significant price increases, demand for live events will likely slow down in the coming months.

Want to learn more? Check out the full inflation report here.

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