EXCLUSIVE: Can’t afford to spend $1,551, including Ticketmaster fees, for two center orchestra seats to Hamilton at the Richard Rodgers Theatre?
How about 12 monthly payments of $138 instead?
That’s a new option at Ticketmaster, the primary online dealer for Hamilton and a dozen other Broadway shows.
Working with two partners, the company recently introduced a “buy now, pay later” option, in which theatergoers pay over six months or a year. The annual interest rate is 10 percent. That rate will double to 20 percent should the initial promotion lapse, according to a link on the Ticketmaster site.
Mean Girls, Frozen, The Lion King and Book of Mormon are among the other musicals available on the installment plan, along with pop concerts and Michelle Obama’s book tour. (She is booked in arenas in December.) The so-called FlexPay loans on Ticketmaster are issued by the Salt Lake City-based bank WebBank, and facilitated by the Swedish payments technology firm Klarna, according to Ticketmaster’s site.
Ticketmaster spokeswoman Ashley Dos Santos declined requests for comment on this major development in ticketing. The company, a division of the huge concert presenter and venue owner Live Nation Entertainment, hasn’t promoted FlexPay beyond a blog post in August. A Klarna spokeswoman confirmed its involvement but declined to be interviewed, citing “confidentiality clauses as this product is still in testing.” A call to WebBank’s president, Kelly Barnett, wasn’t returned. A Hamilton spokesman declined to comment.
The new offering is symptomatic of ticket price inflation and Americans’ increasing tolerance for debt. In the past decade, the average Broadway ticket increased 62 percent to $123, according to Broadway League figures, more than double the percentage increase in average U.S. wages, as tracked by the Social Security Administration. Meanwhile, U.S. household debt reached a record $13.3 trillion in June.
The FlexPay promotional rate compares favorably with the average credit card annual interest rate of 17 percent, as tracked by the industry site CreditCards.com. But incurring debt for a discretionary purchase isn’t thrifty, said Christopher Peterson, director of financial services at the Washington-based Consumer Federation of America: “Benjamin Franklin would not have advised anybody to borrow money at 10 percent to buy theater tickets. This is not, generally speaking, the way to build wealth and meet financial goals.”
FlexPay may appeal to strapped young adults who are wary of credit cards. According to a Deloitte study, the financial crisis a decade ago fostered general distrust of traditional financial institutions, especially among millennials. But to be approved for FlexPay, one must submit to a credit check, which may raise alarms among those concerned about data breaches. Facebook recently said a hack exposed the personal info of nearly 50 million users.
“Bear in mind, each of these companies on the [Ticketmaster] chain will get a copy of your most sensitive data,” Peterson said.
WebBank says in its credit agreement that it uses “security measures that comply with federal law,” which include “computer safeguards and secured files and buildings.”
The FlexPay loan program is not available for tickets resold on Ticketmaster.