By Anne Steele
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (December 2, 2019).
Eric Baker long envisioned bringing together the two ticketing
companies he started.
This week eBay Inc. agreed to sell its StubHub unit, a business
Mr. Baker launched nearly two decades ago, to Geneva-based Viagogo
Entertainment Inc., the ticketing firm with a large European
presence he has been running since 2006.
The $4.05 billion all-cash deal would create a global ticketing
juggernaut in the booming business of live events. It would also
put StubHub back in the hands of the person who early on saw the
opportunity in the legitimate resale of tickets.
Born and raised in Los Angeles, Mr. Baker, 46 years old, was on
the East Coast when he got the idea. After graduating from Harvard
University and doing a consulting stint at McKinsey & Co., he
was working at Bain Capital in Boston in the spring of 1999, just
as the internet was taking off, when his then-girlfriend wanted to
visit New York to see "The Lion King" on Broadway.
"You had to pay through the nose or find people on the street
corner to purchase from," says Mr. Baker. He felt there had to be a
better, more efficient way to find tickets and imagined that could
happen online.
He headed to Stanford Graduate School of Business that fall and,
together with classmate Jeff Fluhr, started StubHub -- then called
Liquid Seats -- in 2000.
The idea of taking what has been known as scalping -- a resale
process often associated with selling tickets in an unauthorized
manner -- and legitimizing it online didn't sit well with
ticketing-industry executives.
"People thought it was crazy," says Mr. Baker.
While trying to secure the most important thing for any
ticketing company -- inventory -- Mr. Baker recalls that sports
leagues, which were wary of being associated with scalping, were a
tough sell. But by 2001 two Major League Baseball teams had signed
on as partners. Season-ticket holders could resell their tickets at
will in a relatively secure manner. Basketball, football and hockey
teams followed suit over the next two years.
The first college to sign on was Mr. Baker's own alma mater,
Stanford.
Concertgoers, meanwhile, were introduced to a new option for
securing tickets to their favorite artists' shows. It can be
difficult to track when tickets go on sale, and for popular acts
tickets are generally snapped up within minutes.
Mr. Baker and Mr. Fluhr -- who was chief executive and had
majority ownership of the company -- had their differences, and in
2004 Mr. Baker left at the board's direction, said people familiar
with the decision.
Mr. Baker intended to take a year to travel before starting
another business. But a month after leaving StubHub, he was in the
middle of planning a trip to London and looking for tickets to
events, such as a soccer match or a concert. He then realized there
was no StubHub equivalent in Europe.
Mr. Baker set out to replicate StubHub abroad. He wasn't bound
by a noncompete agreement. And he knew StubHub wasn't ready to
expand in Europe, so his plans wouldn't encroach on a company in
which he was at the time among the largest shareholders. Viagogo
launched in 2006 and has taken off largely through partnerships
with soccer, cricket and rugby teams. Viagogo, which is closely
held, says it is profitable.
When eBay bought StubHub in 2007, Mr. Baker says he opposed the
deal. "It's rare you have the opportunity to have a business like
that," he says. "To me, you try to hold on to something that's
working."
Viagogo has had run-ins with regulators. Last year, the U.K.'s
Competition and Markets Authority ordered the company to overhaul
the way it presents important information to customers. In July,
the consumer watchdog said it would hold Viagogo in contempt of
court following concerns it had failed to comply with that court
order. Later that month, Alphabet Inc.'s Google said it suspended
the site from placing paid ads in search results, based on the
advice of advertising regulators. In September, the Competition and
Markets Authority said Viagogo addressed the outstanding concerns
and suspended preparations for court action.
Mr. Baker, Viagogo's CEO, says the company has taken steps to be
more proactive with regulators and to make the business more
transparent. "When you're in a disruptive business you have to do
that education process," he said.
His reputation in the industry -- among folks he has both worked
and competed with -- is one of a hard-nosed, relentless deal maker
and ruthless strategist with sharp elbows. These people say, and
Mr. Baker doesn't disagree, that he can be difficult to work with.
But they say his intricate knowledge of important nuances in
ticketing make him among the most intelligent and thoughtful minds
in the business. At Viagogo, Mr. Baker took on an operational role
as the brains behind the business and has let others deal directly
with clients.
With StubHub, he's facing an increasingly crowded and
competitive market for inventory in the U.S. The live-events
business has been growing for several years as consumers continue
to shell out for premium experiences. StubHub, while a dominant
consumer brand, faces competition from nimble upstarts like Vivid
Seats LLC and SeatGeek Inc., and Live Nation Entertainment Inc.'s
Ticketmaster has been expanding its resale business.
Meanwhile, some in the industry suspect the deal will tip off a
wave of consolidation.
Mr. Baker says it will be important for the combined
Viagogo-StubHub to be able to distribute globally. He says that
will be attractive to content owners -- teams, artists and venues
-- wanting to reach more fans: "We want fans to be able to get to
any event, anywhere, anytime."
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
December 02, 2019 02:47 ET (07:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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