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Viagogo buys StubHub for $4 billion
By Chris Cooke | Published on Tuesday 26 November 2019
And then there was one. eBay yesterday announced that it was selling its secondary ticketing platform StubHub to big bad Viagogo, meaning that a UK ticketing market that used to have four big for-profit resale platforms now has just one. Viagogo will hand over $4.05 billion in cash to acquire its rival in a deal which Eric Baker, the man who founded both touting companies, insists is a "win-win" for fans.
eBay has been pondering a sale of StubHub for much of the year after a number of its investors suggested such a sale as one of the ways the company could improve its "floundering" share price. In March the firm announced a strategic review of its current assets and by July it was reported that a number of potential buyers for StubHub had come forward. Then, last month, eBay's interim CEO Scott Schenkel told investors that an announcement on the future of its tickets website was imminent.
eBay's review of its ownership of StubHub followed several years of increased scrutiny of the secondary ticketing market. Although there had been critics of online touting from the very early days – even before the rise of companies like StubHub and Viagogo when a lot of the touting happened on the main eBay website – in more recent years those critics have become more organised and more vocal. As that criticism grew, politicians and regulators that seemed unwilling to crack down a decade ago started to talk about tighter regulation.
When the British music community launched its FanFair campaign and the country's Competition & Markets Authority announced it was investigating the ticket resale sector, there were four big secondary ticketing platforms operating in the UK. Alongside Viagogo and StubHub were the Live Nation-owned Seatwave and Get Me In!
Greater scrutiny of some of the more dodgy practices in the wider ticket resale business led to StubHub and Live Nation beginning to employ an "at least we're not as bad as Viagogo" defence. Though so bad a rep had Viagogo got by this point, that even that line became untenable for Live Nation, which subsequently shut down its resale sites in Europe.
However, as Viagogo went to war with the CMA – initially saying nothing and then spouting all kinds of nonsense – StubHub, which more or less complied with the UK regulator's demands, did still get to enjoy the accolade of being the lesser of two evils.
It wasn't just in the UK that lawmakers and regulators were starting to ramp up the rhetoric against online touting, with new rules being introduced or existing rules better enforced in multiple European countries as well as Australia and New Zealand.
While Viagogo has done its best to ignore and circumvent those rules, all that increased regulation made the US market – where online touting is still generally more readily excepted as the norm – all the more attractive. And the US is a market where StubHub, not Viagogo, is a key player. Which could be one big reason why the latter would want to pull four billion out of its back pocket to buy up the former.
Confirming the deal yesterday, Viagogo boss Baker – who co-founded StubHub in the US in 2000 before leaving to launch Viagogo in Europe six years later – said: "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. It has long been my wish to unite the two companies. I am so proud of how StubHub has grown over the years and excited about the possibilities for our shared future".
Critics of secondary ticketing in the UK yesterday expressed concern that the resale platform that has generally – if reluctantly – fallen in line with consumer rights rules was now set to be owned by a company that has done everything it can to circumvent the law so to continue to confuse consumers into buying risky tickets at marked up prices.
Adam Webb of the aforementioned FanFair campaign said: "This feels like a desperate move from both parties. However, 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 CMA investigation, use this process as an attempt to detoxify its brand. FanFair will be writing to UK regulators and politicians today, and we reiterate our advice to music fans to avoid these sites".
Meanwhile Annabella Coldrick at the Music Managers Forum, a key player in instigating the FanFair campaign, added: "On the back of the FanFair Alliance campaign, we've seen huge steps to reform the UK's secondary ticketing market and put a stop to the rip off anti-fan practices of sites like Viagogo. For that reason, today's announcement is a huge concern. The consolidation of the biggest remaining platforms for ticket touts could put a brake on progress and cause untold harm for audiences and artists alike".
Concerns go beyond the UK, of course. Katie O'Leary of the pan-European anti-touting campaign FEAT told reporters: "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".
"Viagogo claim this will create a 'win-win for fans'", she went on, "but further consolidation in the secondary ticketing market would most likely restrict competition, and further negatively impact fans. 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".
Viagogo and eBay say that they expect their deal to close by the end of the first quarter of 2020, subject to regulatory approval and customary closing conditions.
READ MORE ABOUT: eBay | Face-value European Alliance For Ticketing (FEAT) | FanFair Alliance | StubHub | Viagogo
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