By Cara Lombardo and Corrie Driebusch
EBay Inc. on Monday said it agreed to sell its StubHub business
to Geneva-based Viagogo Entertainment Inc. for $4.05 billion, a
deal that would create an international ticketing giant in the
booming live-events business.
StubHub and smaller rival Viagogo are already among the largest
players in the growing secondary market for sports, music and
live-entertainment tickets, in which brokers and fans resell
tickets purchased from primary vendors such as Live Nation
Entertainment Inc.'s Ticketmaster.
While StubHub and Viagogo are both big online ticket resellers,
StubHub is mostly present in North America, whereas closely held
Viagogo is a significant competitor internationally -- particularly
in the U.K. and Europe.
The deal would give the companies, which together sell hundreds
of thousands of tickets daily across more than 70 countries, the
benefit of scale in a $10 billion global resale market.
"The ultimate vision really is that fans can go to one place to
buy any ticket for any event anywhere in the world in their own
language and currency," Viagogo Chief Executive Eric Baker, a
StubHub co-founder, said in an interview.
StubHub, the No. 1 competitor in the secondary-ticketing market,
was founded in San Francisco in 2000 by Mr. Baker and Jeff Fluhr,
both former Stanford Business School students. It essentially
established the market for legitimate online resale of tickets. It
has become so prolific as a destination for purchasing tickets that
many fans don't realize it is a resale platform. The website had
more than 240 million unique visitors last year and sold tickets
valued at more than $4.75 billion.
EBay has owned StubHub since 2007, when it bought the business
from Messrs. Baker and Fluhr for $310 million. StubHub accounted
for about 14% of eBay's $2.6 billion of revenue in the third
quarter.
Mr. Baker launched Viagogo in London in 2006. The company grew
through partnerships with soccer, cricket, rugby and other sports
leagues, as well as through ticketing for festivals and other music
events.
Both companies have faced criticism over the years for selling
tickets marked up well above face value.
The live-events business has been growing for several years as
consumers, especially millennials, continue to shell out for
premium experiences. Concerts, in particular, have been commanding
record-high ticket prices amid rising demand for live shows.
StubHub faces competition from nimbler upstarts including
Viagogo, Vivid Seats LLC and Seat Geek. Ticketmaster, the largest
ticket seller, has been expanding its resale business, too.
The secondary ticketing market overall, meanwhile, has been
contending with a more-aggressive primary ticketing market. Concert
promoters, venues and teams have been pricing the most coveted
seats and VIP experiences at a premium to capture more of the value
of a ticket and squeeze out brokers.
Vivid Seats had been in discussions about buying StubHub,
according to people familiar with the matter, a deal that many in
the industry said would have consolidated market share and likely
drawn antitrust scrutiny. Because of StubHub and Viagogo's largely
complementary geographic businesses, industry experts don't expect
significant regulatory hurdles.
"Versus other potential buyers, this does the most to maintain
the status quo in the ecosystem," said David Goldberg, a former
Ticketmaster executive and now senior adviser to private-equity
firm TPG's growth-investing arm.
EBay decided to explore selling StubHub shortly after two
activist investors surfaced in January and urged it to exit
businesses unrelated to its core marketplace. The company agreed to
consider selling StubHub and its internationally focused classified
business. It also added board members as part of a settlement with
the investors, Elliott Management Corp. and Starboard Value LP.
Elliott had said it believed StubHub could sell for between $3.5
billion and $4.5 billion, and eBay's classified businesses for
between $8 billion and $12 billion.
In September, eBay CEO Devin Wenig stepped down, in part because
of disagreement over selling StubHub and the classifieds
business.
EBay in October warned investors it could report its first
quarterly revenue decline in four years. The company also said
sluggish sales of merchandise through its main platform helped
cause a 57% year-over-year decline in third-quarter profit. Its
shares have slumped since then but are still up on the year, and
rallied 2.1% to close at $35.85 Monday. That gives the company a
market value of about $29 billion.
EBay has been working for years to redefine itself as shoppers
increasingly turn to their phones, showing little patience for
scrolling through thousands of listings. The company touts that 80%
of items on its website are new, with the bulk sold at a fixed
price rather than being auctioned. It has rolled out improved
search features and personalized recommendations and reviews.
The all-cash takeover, reported earlier Monday by The Wall
Street Journal, was financed with cash on hand, debt underwritten
by JPMorgan Chase & Co. and new equity funding from existing
backers Bessemer Venture Partners and Madrona Venture Group.
Write to Cara Lombardo at cara.lombardo@wsj.com and Corrie
Driebusch at corrie.driebusch@wsj.com
(END) Dow Jones Newswires
November 25, 2019 19:43 ET (00:43 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
eBay (NASDAQ:EBAY)
Historical Stock Chart
From Aug 2024 to Sep 2024
eBay (NASDAQ:EBAY)
Historical Stock Chart
From Sep 2023 to Sep 2024