Yahoo Finance Ebay agrees to sell StubHub to Swiss ticket reseller Viagogo in $4bn deal
Ebay has agreed to sell StubHub, its ticketing business, to Swiss ticket reseller Viagogo in a $4bn deal that critics charged will “likely restrict competition, and further negatively impact fans”.
Ebay, the online marketplace, has owned StubHub since 2007 when it bought the business for $310m. StubHub was founded in San Francisco in 2000 by Eric Baker and Jeff Fluhr, Baker is the founder and CEO of Viagogo.
Viagogo has been criticized for driving ticket prices sky-high for top-selling shows and sports events. Hours after tickets for the musical Hamilton opened for sale in London, Viagogo was advertising tickets at between £999 ($1,300) and £2,500 ($3,200) each.
New York’s attorney general has similarly criticized StubHub and its rivals, calling ticket reselling a “rigged game” where professional brokers use “bots” to snap up thousands of tickets illegally, then mark up prices by an average of 49%, and as much as 7,000%. In one example cited by the attorney general, a scalper bought more than 1,000 tickets in less than a minute for one U2 show at Madison Square Garden.
StubHub is the largest resale ticket marketplace in the US, with about $1.1bn in net transaction revenue in 2018, according to Ebay filings. Viagogo, a private company, is larger outside the US.
Katie O’Leary, campaign lead of consumer group Face-value Alliance for Ticketing, called the deal “alarming” and said it would give the combined entity “an even greater stronghold in the secondary ticketing market”.
“Viagogo claim this will create a ‘win-win for fans’, but further consolidation in the secondary ticketing market would most likely restrict competition, and further negatively impact fans,” she said. “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 FanFair Alliance called the deal “a desperate move from both parties”. He said the consumer group would be writing to UK regulators and politicians, and “we reiterate our advice to music fans to avoid these sites”.
The Swiss-based company has been targeted by the UK competition authorities, which have ordered it to display clearer information about the face value of its tickets sold on its website and threatened to bring contempt of court proceedings.
The deal comes nearly a year after Ebay came under pressure from activist investors to hive off some of its businesses.
In January, activist investors Elliott Management Corp and Starboard Value had urged Ebay to sell its ticket sales business and Ebay Classifieds Group as part of a plan that could double the company’s value.
Following the activist investors’ request, Ebay made changes to its board of directors in March. It announced a review of its StubHub and Ebay Classifieds businesses as part of an agreement with activist investors to avert a proxy contest.
Shares of Ebay were up nearly 3% at $36.02 in early trade on Monday.
Reuters contributed to this story.
