Why Kendrick Lamar's Halftime Show Pays $0—And He Still Wins Big

Economists disagree on all sorts of issues and ideas, but one core principle is generally accepted: an exchange only exists because both sides believe it makes them better off.

Jørund Føreland Pedersen, CC BY-SA 3.0 <https://creativecommons.org/licenses/by-sa/3.0>, via Wikimedia Commons

The Philadelphia Eagles and Kansas City Chiefs will face off Sunday at Caesar’s Superdome in New Orleans to vie for the Lombardi Trophy. Super Bowl LIX will see a lot of money change hands, through everything from prop bets between friends to pizza sales and post-game merch.

One guy who won’t be getting paid this weekend is Super Bowl halftime performer Kendrick Lamar, a rapper from Compton, California. He’ll be performing at the Super Bowl for the second time (having appeared as a guest artist in 2022 with Dr. Dre, 50 Cent, Eminim, Snoop Dogg, and Mary J. Blige) and he’ll make the same amount of money as headliner as he did for that guest performance at Superbowl LVI: $0. That’s right — zero dollars.

Why $0?

Every year, at least some people are surprised to learn artists don’t get paid for performing at the Super Bowl halftime show. This makes sense. We’re used to seeing stars like Taylor Swift, Kanye West, Beyoncé, Madonna, Lady Gaga, and, yes, Drake, command millions for their performances. So why would artists agree to perform such a highly watched show for nothing?

Basic economics offers us an answer. In his seminal text Human Action, Ludwig von Mises pointed out that the purpose of action is “to substitute a more satisfactory state of affairs for a less satisfactory [one].”

So the very fact that Lamar is choosing to perform suggests he sees some benefit. Perhaps it was always his dream to perform as the headliner at the Super Bowl. Perhaps he is one of those rare humans who really doesn’t care about money.

Conversely, perhaps Lamar cares very much about money, and believes his appearance will generate a great deal of future wealth. The NFL isn’t paying Lamar to perform, but it’s not difficult to see how Lamar stands to benefit materially from his Super Bowl stage time.

For starters, the NFL covers all production costs, so Lamar won’t have to cover the estimated $10-$20 million he’d otherwise invest in staging a show of this size. But also, history shows that artists experience a huge boost in popularity after performing at the Super Bowl, which for many artists can be a career-defining moment. As Katy Perry’s manager, Cobb Jensen, put it in 2015: “It took [Katy] from being a star to the stratosphere.”

This should come as little surprise. When you perform before a hundred million people — 120.25 million people watched the Chiefs defeat the 49ers last year, according to Sports Media Watch — the brand exposure is massive. Lamar can expect invitations to appear on TV, millions of new followers on social media, and other future opportunities.

Value might be subjective, but it’s undeniable that many see immense value in getting their brand in front of a global audience, which is why companies are lining up to pay $8 million for a 30-second commercial during Super Bowl LIX. If Lamar performs for 15 minutes, he’s looking at nearly a quarter of a billion dollars of advertising value.

This exposure has many benefits, including cold, hard cash.

History shows that artists see a spike in record sales after a Super Bowl appearance. I’ve noted that Maroon 5’s sales surged by 488 percent after the band’s 2019 performance. Missy Elliott saw a 282-percent increase in 2015, while Bruno Mars experienced a 164-percent jump in 2014. In 2013, Beyoncé’s sales rose by 230 percent, and Destiny’s Child’s sales skyrocketed by 600 percent.

Artists receive royalties on record sales, so surging sales can result in a very big payday. Lamar’s performing without a direct payment (even a “low” payment), but that doesn’t indicate an unfair exchange.

The Benefits of Trade

Economists disagree on all sorts of issues and ideas, but one core principle is generally accepted: an exchange only exists because both sides believe it makes them better off. The Nobel Prize-winning economist Milton Friedman noted the only caveats to the gains from trade are that the exchange is “bi-laterally voluntary and informed.”

That mutual benefit is why free trade is widely considered one of the greatest forces of wealth creation and poverty reduction in human history. The agreement between the NFL and artists is unconventional, but it’s a mutually beneficial deal. Nobody is being exploited. On the contrary, both the NFL and Kendrick Lamar stand to benefit from the transaction.

Could unpaid internships, below-minimum wages, payday loans, and other fully voluntary transactions also be mutually beneficial, even if they aren’t terms (like a $0 payday) we’d choose for ourselves? Can individuals freely choosing nontraditional contracts really be more harmful than being forbidden to make them? Or should that be left up to the participants to decide?

Keep Lamar in mind when lawmakers pass legislation (or executive orders) to prohibit voluntary exchange.

This article originally appeared on The Daily Economy.