By Cara Lombardo, Corrie Driebusch and 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 (November 26, 2019).
EBay Inc. said it agreed to sell its StubHub business to
Geneva-based Viagogo Entertainment Inc. for $4.05 billion, a deal
that would create a global 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. It recently launched marketing
campaigns aimed at shedding what some see as an outdated image.
The all-cash takeover, reported 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 Madrone Capital Partners.
Write to Cara Lombardo at cara.lombardo@wsj.com, Corrie
Driebusch at corrie.driebusch@wsj.com and Anne Steele at
Anne.Steele@wsj.com
Corrections & Amplifications The name of Madrone Capital
Partners was incorrectly given as Madrona Venture Group in an
earlier version of this article. (Nov. 25, 2019)
(END) Dow Jones Newswires
November 26, 2019 02:47 ET (07:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
eBay (NASDAQ:EBAY)
Gráfica de Acción Histórica
De Feb 2024 a Mar 2024
eBay (NASDAQ:EBAY)
Gráfica de Acción Histórica
De Mar 2023 a Mar 2024