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CMA: StubHub must sell Europe, Asia, S. America biz

The UK competition regulator has ordered the partial unwinding of the $4bn merger of Viagogo and StubHub, which must sell its int'l business

By IQ on 02 Feb 2021

CMA head Andrea Coscelli CBE

CMA head Andrea Coscelli CBE

image © Competition and Markets Authority

StubHub must sell its entire international business – including its operations in the UK, Europe, South America and Asia – for the Competition and Markets Authority (CMA) to sign off on its acquisition by Viagogo, the UK regulator announced today.

The CMA, which put the brakes on the already completed merger in October after finding it will significantly reduce competition in the secondary ticketing market, said in its final report summary, released today, that of three possible effective remedies – a full divestiture of either Viagogo or StubHub by the new company, or a partial divestiture of StubHub – the latter solution is the least intrusive for the combined business.

In addition to requiring the sale of the StubHub business outside North America, the CMA reserves the right to choose the identity of the buyer, as well as the terms of the transaction – including the right of the purchaser to use the StubHub brand for the next decade.

Should ‘Stubagogo’ not agree to the sale voluntarily “in a timely fashion”, the competition watchdog will issue a binding order, it says.

“The evidence shows that Viagogo selling StubHub’s international business will resolve our competition concerns”

The partial reversal of the merger will mean StubHub’s operations outside North America “will be independently owned and run by a separate company, with no input from Viagogo”, according to the CMA, which sought input from Viagogo/Stubhub customers, competitors and other experts, including industry professionals and consumer groups, to reach its verdict.

“The CMA has focused on ensuring competition in this sector works best for UK consumers. After examining all the options, including unwinding the merger in full, the evidence shows that Viagogo selling StubHub’s international business will resolve our competition concerns, effectively and proportionately,” says CMA inquiry group chair Stuart McIntosh.

“Creating a fully independent StubHub international business will maintain competition in the UK and help ensure that the users of these ticketing platforms don’t face higher prices or poorer quality of service.”

The CMA’s full final report will be released in the coming weeks.

Adam Webb, from campaign group FanFair Alliance, cautiously welcomes the news, explaining that the identity of the buyer will depend on whether the CMA’s decision is good for fans. “Tackling this hugely controversial $4bn merger was always going to be tough for regulators, and we welcome the CMA’s hard work during this investigation,” he comments.

“Going forward, the most pertinent question will be the identity of potential buyers”

“Going forward, the most pertinent question will be the identity of potential buyers. Practically all of StubHub’s value is in the company’s North American operation. Aside from the acquisition costs, anyone wishing to operate a successful uncapped ticket resale business in the UK would require two things: significant relationships with large-scale ticket touts to supply inventory, and deep enough pockets to outspend Viagogo on Google search advertising.

“That might be good for Google, and it might be good for ticket touts. But we need a conclusion that’s good for UK consumers, and stops them being ripped off.”

“We welcome the CMA’s decision, for which both it and the FanFair Alliance ought to be applauded,” adds Sam Shemtob, director of the Face-Value European Alliance for Ticketing (FEAT). “The requirement will help protect the live sector across Europe from a concentration of market power from the world’s largest uncapped secondary sites.

“When live events resume, reduced capacities and social distancing will likely lead to increased demand, making it more important than ever that fans can see their favourite bands at the prices intended. FEAT is working hard to make this possible, both with regulators and by developing best practice.”


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