The world of secondary ticketing just got smaller – although perhaps not for the reasons those in the industry opposed to industrialised scalping might have hoped. Viagogo has moved to acquire rival secondary platform StubHub in a cash deal valued at $4.05bn. That’s right. Four billion dollars. Side note 1: the entire recorded music business globally was worth $19.1bn in 2018 according to IFPI numbers. Side note 2: Terra Firma paid £4.2bn to buy EMI (both recorded music and publishing) in 2007. Side note 3: Eric Baker founded StubHub in 2000 and sold it to eBay in 2007 for just $310m, so that’s a 13x increase in sale value in 12 years.
Baker had already set up Viagogo in 2006, the year before StubHub was first sold, and much is being made of the fact that he is bringing his two companies together under single ownership. “It has long been my wish to unite the two companies,” he said in a statement on the sale. “I am so proud of how StubHub has grown over the years and excited about the possibilities for our shared future.” This is not a done deal quite yet as it will all have to go for regulatory approval, although IQ is suggesting the sale could close in Q1 2020.
This proposed merger also comes as US Congress launches its own investigation into secondary ticketing and StubHub is one of the companies it has written to in order to get it to hand over information pertinent to its dissection and evaluation of the secondary market. Ticketmaster shuttered its own secondary ticketing platforms in the UK, GetMeIn and Seatwave, last year amid mounting criticism of the practice from consumer bodies and artists/managers in the industry as well as growing pressure from both politicians and the Competition & Markets Authority. High-profile cases against “power sellers” are still ongoing in the UK and how they will be resolved should have massive repercussions for the sector.
Adam Webb, campaign manager at FanFair Alliance, told Music Ally, “This feels like a desperate move from both parties [Viagogo and StubHub]. 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, uses this process as an attempt to detoxify its brand. FanFair will be writing to UK regulators and politicians today [25th November] and we reiterate our advice to music fans to avoid these sites.”
Katie O’Leary, campaign lead at FEAT (Face-value European Alliance for Ticketing) added, “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. 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.”
IQ notes that eBay shareholders “have agitated for the company to divest itself of slow-performing StubHub, and eBay’s share price rose 6% on news of the sale”. The subtext here is that ownership of StubHub was seen by some shareholders as negatively affecting the image and value of the company but also that there were mounting shareholder fears that growing legal and regulatory pressure could potentially make the company inoperable.
Eric Baker and Viagogo obviously think differently and regard consolidation as the best route for survival and further growth. But the timing – given what is happening in the UK and the US – means that all certainties are now up in the air although we can be sure FanFair Alliance will seize on this and do everything in its power to stop two giants in secondary transforming themselves into a super-entity.