‘A Win-Win For Fans’: Viagogo To Buy StubHub For $4.05 Billion, Update: Reactions
eBay Inc. and viagogo today announced that eBay will sell its subsidiary StubHub to viagogo for a purchase price of $4.05 billion in cash.
Combined, both ticket resellers will sell “hundreds of thousands of tickets daily across more than 70 countries,” by their own admission.
The sale is still subject to regulatory approval and customary closing conditions and is expected to close by the end of the first quarter of 2020.
Over the past several months, eBay leadership and board of directors thoroughly reviewed their portfolio, and concluded that selling StubHub was the best path forward. As the Financial Times reported, eBay has “struggled to maintain momentum in recent years, as it lost ground to rivals such as Amazon and Shopify.”
Scott Schenkel, interim chief executive officer of eBay Inc., believes, “this transaction is a great outcome and maximizes long-term value for eBay shareholder.”
Eric Baker, viagogo’s founder and CEO, also co-founded StubHub while in business school, but left before the business was sold to eBay for $310 million in 2007.
Baker said in a statement that it had long been his wish to unite the two companies, adding, “I am so proud of how StubHub has grown over the years and excited about the possibilities for our shared future. Buyers will have a wider choice of tickets, and sellers will have a wider network of buyers. Bringing these two companies together creates a win-win for fans – more choice and better pricing.”
Sukhinder Singh Cassidy, president of StubHub, said she expected a smooth transition for all employees, partners and customers. “Bringing StubHub and viagogo together will allow us to drive further expansion and innovation, and create a more competitive offering for live event fans globally. This provides a great opportunity to expand our business, pursue new partnerships and execute our strategy,” she added.
Both StubHub and especially viagogo have been taking a lot of flak internationally for enabling the for-profit resale of tickets on their websites, and not being transparent enough about it.
Viagogo maintains that anyone had the right to do with their property – in this case tickets – as they pleased, and that a promoter denying that right in their terms and conditions didn’t change that fact.
StubHub’s former global head of public affairs told Pollstar in a 2018 interview that tickets were a luxury item: “Not only is the venue limited in its capacity, it’s also not something you legally have a right to, like education or medicine. That can sound a bit harsh, but if you look at what some of our critics say, the words they use are almost like [saying] we’re taking away insulin from diabetics. It’s a little bit of an overreaction, I think, to what is ultimately a luxury good.”
Both companies also emphasize the fact that a lot of tickets on their websites are being resold below face-value.
null – Katie O’Leary
Campaign lead for the Face-value European Alliance for Ticketing (FEAT)
Update: Katie O’Leary, campaign lead for FEAT, the pan-European group formed to fight ticket scalping, doubts that the viagogo-StubHub merger will create a ‘win-win for fans’, saying that but “further consolidation in the secondary ticketing market would most likely restrict competition, and further negatively impact fans.”
“It’s alarming to think of viagogo potentially gaining an even greater stronghold in the secondary ticketing market given it’s been the subject of various legal actions across Europe and banned from advertising on Google globally.
“We hope that regulators will have consumers’ best interests at heart when considering this deal, and consider not only the question of Viagogo’s increased dominance but also whether they can be considered a fit and proper owner.”
Adam Webb, campaign manager for the U.K.’s anti-secondary ticketing group FanFair Alliance, told Pollstar, “news of this acquisition should be a major concern for both audiences and music businesses – especially if viagogo, a company that recently had a court order hanging over its head and is still the subject of a [U.K. Competition and Markets Authority] CMA investigation, uses this process as an attempt to detoxify its brand.”
The CMA and viagogo settled in court last year, forcing the ticket reseller to comply with a set of changes to its business practices, including:
– telling purchasers of tickets if there is a risk that they will be turned away at the door
– informing customers which seat in the venue they will get
– providing information about who is selling the ticket, so people can benefit from enhanced legal rights when buying from a business
– not giving misleading information about the availability and popularity of tickets – which had the potential to lead to customers being rushed into making a buying decision or making the wrong choice
– making it easy for people to get their money back under Viagogo’s guarantee when things go wrong
– preventing the sale of tickets a seller does not own and may not be able to supply
Viagogo welcomed the settlement at the time, stating “The agreement with the CMA will enable buyers and sellers to exchange tickets with more transparency and additional information, such as face value, will be displayed on the website. It reflects a desire to ensure that the consumer has as much information as possible before making their purchase decision.”
The latest statement from the CMA on the matter reads: “Following continued pressure from the CMA, viagogo has now addressed outstanding concerns about how it presents information to its customers.
“The CMA has therefore suspended preparations for further court action.
“The CMA will continue to maintain pressure on the resale site to ensure that it fully complies with UK consumer protection law, and Deloitte will complete a further independent review of viagogo’s compliance with the court order in October 2019.”
FanFair Alliance’s Adam Webb added, “FanFair will be writing to U.K. regulators and politicians today, and we reiterate our advice to music fans to avoid these sites.”
(This article was updated Nov. 25, at 9.45 a.m. PST, after first being published at 6.44 a.m. PST.)