Viagogo sells StubHub business outside N.America
Viagogo has sold its StubHub business outside of North America – including the UK – to investment firm Digital Fuel Capital LLC for an undisclosed sum.
The sale was approved by the UK Competition and Markets Authority (CMA) and completed on 3 September, after secondary ticketing giant Viagogo was forced to sell its international business due to competition concerns.
Viagogo acquired eBay’s ticketing division StubHub for $4.05 billion in cash in February 2020.
According to the CMA, a merger between the two companies would have resulted in a substantial lessening of competition in the secondary ticketing market, leading to higher prices and limited option for fans.
“We look forward to sharing more details about the integration of the two businesses”
Viagogo assuaged competition concerns by proposing the “divestment to an upfront buyer of StubHub’s European and certain other international legal entities”.
The sale of StubHub International to Digital Fuel Capital now brings the merger investigation to a close, says the CMA.
The Massachusetts-based investment firm will add StubHub International to its portfolio which consists of Artifact Uprising, Boutique Brands, BuyAutoParts, Guild Brands, National Tree Company, Outdoor Adventure Brands, Renovation Brands, RugsUSA, and Seattle Coffee Gear.
“We appreciate the CMA’s role in bringing the merger to this conclusion, and we look forward to sharing more details about the integration of the two businesses with our loyal customers and partners very soon,” says Cris Miller, VP of business development, Viagogo.
“Viagogo is a website with a long and storied history of breaking the law”
“As the live events industry emerges from the coronavirus pandemic, robust competition in the ticketing market is needed more than ever and Viagogo will continue to take its essential role in the live events industry very seriously. Viagogo and StubHub will always remain committed to working with regulators, while providing safe and secure platforms for people to buy and sell tickets to events all over the world.”
Adam Webb, campaign manager at FanFair Alliance, an anti-touting campaign group, says: “Good luck to Digital Fuel Capital. For their sake, I hope they didn’t pay very much.
“Viagogo is a website with a long and storied history of breaking the law and that’s dominated by large-scale touts and non-existent tickets.”
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UK’s CMA calls for stronger controls on resale sites
As live events return in the UK, the British competition regulator has proposed stronger rules to deal with illegal activity on non-price-capped secondary ticketing sites such as Viagogo and StubHub.
While laws exist to prevent the bulk-buying of tickets to resell at a profit, the speculative resale of tickets which the seller doesn’t yet own and the advertising of tickets using incorrect information, “swift and effective action by authorities is not possible under the current law”, says the Competition and Markets Authority (CMA), which has outlined its recommendations in a new report, released this morning (16 August).
Among the measures the CMA is calling for are:
- A ban on platforms allowing resellers to sell more tickets for an event than they can legally buy from the primary market
- Ensuring platforms are fully responsible for incorrect information about tickets that are listed for sale on their websites
- A new system of licensing for platforms that sell secondary tickets that would enable an authority to act quickly and issue sanctions such as taking down websites, withdrawing a business’s right to operate in the sector, and the imposition of substantial fines
George Lusty, the CMA’s senior director for consumer protection, comments: “Over recent years we have taken strong action to protect people buying tickets from resellers online, and the secondary ticket websites are now worlds apart from those we saw before the CMA took action.
“If adopted, these proposals will help prevent people getting ripped off by unscrupulous resellers online”
“While it is clear that concerns about the sector remain, there are limits to what the CMA and other enforcers can do with their current powers. With live music and sporting events starting back up we want the government to take action to strengthen the current laws and introduce a licensing regime for secondary ticketing platforms.
“If adopted, these proposals will help prevent people getting ripped off by unscrupulous resellers online, and we stand ready to help the government to implement them.”
Adam Webb, campaign manager for anti-ticket touting group FanFair Alliance, comments: “With the steady return of live music events, this is a welcome and timely report from the Competition and Markets Authority. These proposed changes to regulating the so-called secondary ticketing market could have far-reaching future benefits for music fans. We now need to fully digest the implications and viability of introducing their suggested measures.
“However, it’s equally important that we’re not distracted from the here and now. Over the course of the pandemic, FanFair Alliance has continued to send substantial evidence to the CMA detailing a range of serious and current allegations about Viagogo in particular – from systematic breaches of consumer protection law to mass-scale fraud. This has gone on for far too long.
“The CMA still has a court order hanging over this company. Given Viagogo’s wretched history of compliance and ongoing complications around their $4bn merger with StubHub, it is now even more imperative that these allegations are investigated comprehensively and, if required, decisive enforcement action taken.”
Earlier this year the CMA ordered StubHub to sell its business outside North America in order for the authority to approve its acquisition by Viagogo. The companies have indicated they will comply, with plans for StubHub outside North America to be sold to a new owner.
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Stubagogo will spin off StubHub international
Both Viagogo and StubHub have signalled they are willing to sell off the latter’s international operations in order to clear the remaining legal hurdles to the merger of the two businesses.
The UK’s Competition and Markets Authority (CMA) said earlier this week that StubHub must divest its business outside North America in order secure regulatory approval for its takeover by Switzerland-based Viagogo, which was largely complete by February 2020. Viagogo, led by StubHub founder Eric Baker, announced its intention to acquire US-based StubHub for US$4.05 billion in cash in late 2019, just before the pandemic put the brakes on live events globally.
In a statement, a spokesperson for StubHub says the company is happy for its business outside North America – which includes offices in Europe, South America and Asia, and is believed to account for around 10% of StubHub’s overall business – to continue under new ownership if it secures CMA approval for the merger. (The CMA must also vet the purchaser of the StubHub international business, as well as the terms of the acquisition.)
“StubHub is happy to have found common ground with the CMA that allows our North American business to move forward”
“StubHub is happy to have found common ground with the CMA that allows our North American business to move forward with the merger with Viagogo and our international business to move forward under new ownership,” says the spokesperson.
“We will continue to work with the CMA to implement the agreed-upon remedy. Once completed, consumers will continue to benefit from the safe and secure marketplaces provided by both businesses.”
“We are pleased to have found a remedy that is acceptable to the CMA that will allow everyone involved to move forward with clarity and certainty,” reads a similar statement from Viagogo. “Importantly, both viagogo and StubHub will continue to provide a safe and secure platform for people to buy and sell tickets to events all over the world.”
The CMA’s investigation found that the combined Viagogo-StubHub business would control a market share of more than 90% of the for-profit secondary ticketing market in the UK. The company faces stiffer competition in the US, where ticket touting is more accepted, from the likes of Ticketmaster Resale, Ticket Network, Vivid Seats and SeatGeek.
CMA: StubHub must sell Europe, Asia, S. America biz
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.”
Viagogo offers to sell parts of StubHub in merger bid
Viagogo is offering to sell StubHub’s resale business outside of North America in a bid to address concerns expressed by the UK’s competition watchdog which has provisionally halted the $4 billion (£3bn) merger.
UK watchdog, the Competition and Markets Authority (CMA), recently found that the acquisition of StubHub by Viagogo will reduce competition in an “already very concentrated market”, throwing into doubt the fate of the already completed deal in the UK.
Now, Viagogo is proposing the sale of StubHub’s holding company, which operates all of its international primary and secondary businesses, including its UK operations, in a bid to address the CMA’s concerns – though the deal would see Viagogo retain StubHub’s much larger US and Canadian ticket resale business.
“There are some glaring concerns with their reported proposal, which appears to suggest a three-year lease not an outright sale”
Under the sale, the buyer of StubHub’s operations would receive customer and transaction data in the UK and beyond as well as the Spain-based Ticketbis, which was sold to StubHub in 2016 for a reported €165m.
The proposal also states that the buyer would be allowed to use the StubHub UK brand for three years, followed by a year-long “blackout” where neither the buyer nor Viagogo could use the StubHub brand in Britain.
Adam Webb, campaign manager for anti-ticket touting group FanFair Alliance, told IQ: “Viagogo is a discredited business that’s been at the heart of a major ticket mis-selling scandal, ripping off UK audiences to the tune of millions. The operators of this platform cannot be trusted. Even on initial glance, there are some glaring concerns with their reported proposal, which appears to suggest a three-year lease of StubHub UK’s business – not an outright sale. We have already raised these concerns with the CMA.”
While a Viagogo spokesperson says: “We look forward to working with the CMA to deliver a comprehensive solution which addresses their concerns and we believe this proposal would achieve that.”
CMA: Viagogo-StubHub merger anti-competitive
The Competition and Markets Authority (CMA) has found that the acquisition of StubHub by Viagogo will reduce competition in an “already very concentrated market”, throwing into doubt the fate of the already completed deal in the UK.
The UK competition watchdog opened an in-depth, ‘phase 2’ investigation of the merger in June after finding competition concerns during its initial probe.
According to the CMA’s provisional decision, with Viagogo and StubHub now the only two companies of “material size” in the British ticket resale sector, the merged outfit would have a market share of more than 90%.
The authority is concerned the merger could lead to higher fees for fans (both selling and buying), as well as “a lower quality of service and reduced innovation in the sector”.
Stuart McIntosh, chair of the CMA inquiry group, comments: “The evidence we’ve seen so far consistently points in the same direction: that Viagogo and StubHub have a market share of more than 90% combined and compete closely with each other. We are therefore concerned that their merger could lead to secondary ticketing customers facing higher fees and lower quality services.
The CMA has suggested the sale of StubHub by Viagogo in the UK
“We’re now inviting comments on our provisional findings and possible remedies.”
Among the options floated to address the CMA’s concerns is the sale, either partial or whole, of StubHub by Viagogo on a global basis, which would leave Viagogo as an effective monopoly in many markets.
Adam Webb, campaign manager for anti-ticket touting group FanFair Alliance, says: “FanFair Alliance welcomes today’s provisional findings. Though poorly timed and focused predominantly on the US market, Viagogo’s $4.05bn acquisition of StubHub raises acute competition concerns in the UK. We are pleased the CMA has recognised this.
“Ultimately, the merger would bestow a hugely controversial business monopoly status in this country, and risk unpicking some significant progress made over recent years to clean up the secondary ticketing market. We now look forward to submitting further views to the CMA about both their findings and potential remedies.”
A Viagogo spokesperson says: “Our intention remains to provide eventgoers in the UK with the best possible service, and whilst we disagree with the provisional conclusion that the deal would reduce competition, we look forward to working with the CMA to deliver a comprehensive solution which addresses their concerns.”
The deadline for comments on the CMA’s provisional findings is 5 November 2020. Written representations can be made to [email protected].
Viagogo proposed StubHub Europe sale to clear merger
The UK’s Competition and Markets Authority (CMA) has revealed that Viagogo offered to sell the European entities of StubHub, in a bid to gain the watchdog’s approval of its merger with the fellow secondary ticketer.
The CMA recently published documentation detailing in full its decision to refer Viagogo’s completed acquisition of StubHub for further investigation.
According to the CMA, a merger between the two companies would result in a substantial lessening of competition in the secondary ticketing market, leading to higher prices and limited option for fans.
Before the CMA reached its conclusion, Viagogo was able to offer undertakings to assuage competition concerns, proposing the “divestment to an upfront buyer of StubHub’s European and certain other international legal entities”.
Although the CMA notes it “generally prefers structural remedies, such as divestiture, over behavioural remedies”, the watchdog states that the proposed undertaking “does not offer a clear-cut solution to competition concerns”.
The watchdog claims “the scope” of the proposed undertaking “may not be appropriately configured to allow a purchaser to operate as an effective competitor in the UK market”, as the sale would require a carve-out from the global StubHub business, rather than comprising the divestment of a standalone business, leading to difficulties in implementation and re-platforming for the buyer.
Viagogo proposed “divestment to an upfront buyer of StubHub’s European and certain other international legal entities”
“The CMA considers that there is a significant risk that the Proposed Undertaking would not restore competition to the level that would have prevailed absent the Merger and would not fully address the significant competition concerns identified in the SLC Decision without the need for further investigation,” reads the CMA document.
The documentation also included testimony from resellers indicating that many view Viagogo and StubHub as the strongest alternatives to each other, with “no credible alternatives” available following the merger.
“It’s fascinating to see the full text of the CMA’s decision, and the fact that even Viagogo’s main suppliers (ie high-volume ticket touts) are against this merger tells its own story,” comments Adam Webb, campaign manager of anti-tout group FanFair Alliance.
“The main thrust of Viagogo’s arguments, that their acquisition of StubHub would not create a monopoly in the UK, and their business is competing with both primary operators and capped consumer-friendly ticket resale services, is simply not backed up by evidence – least of all from Viagogo’s own internal documents.
“We now look forward to the CMA proceeding with a full Phase 2 investigation.”
IQ has contacted Viagogo for comment.
CMA refers Viagogo/Stubhub merger for further investigation
The UK’s Competition and Markets Authority (CMA) has referred the merger of secondary ticketing giants Viagogo and StubHub for an in-depth investigation, warning that the deal could result in “a substantial lessening of competition”.
The watchdog began its investigation into Viagogo’s US$4 billion all-cash acquisition of StubHub in December, following pressure from anti-ticket touting groups.
Earlier this month, the CMA stated that the deal, which would see both companies brought back under the control of founder Eric Baker, “could lead to customers losing out through higher prices, less innovation and a lack of real choice.”
The organisation is now advising that the merger be investigated further, after giving Viagogo five days to respond to its initial concerns.
Adam Webb, campaign manager of anti-touting group FanFair Alliance “welcomes” the CMA’s decision.
“We remain committed to our belief that the combination of the two companies is a good move for customers worldwide”
“Over recent years, there have been major steps forward in the UK to eradicate the bad practices of sites like Viagogo and StubHub and those of the large-scale ticket touts who dominate their supply chain,” says Webb.
“Even in the midst of the Covid-19 crisis, the thought of such a business monopolising “for profit” secondary ticketing remains highly problematic.
“Viagogo’s predatory marketing practices and business model continue to endanger audiences, and its $4.05bn acquisition of StubHub raises acute competition concerns, particularly in the UK.”
A Viagogo spokesperson says that the company “will continue to work diligently with the CMA” during the second phase of their review.
“We remain committed to our belief that the combination of the two companies is a good move for customers worldwide.”
CMA: Viagogo/StubHub merger to drive up prices
The UK’s Competition and Markets Authority (CMA) has stated that the merger of secondary ticketing giants Viagogo and Stubub could result in “higher prices and fewer options” for fans.
The watchdog began its investigation into Viagogo’s US$4 billion all-cash acquisition of StubHub in December, following pressure from anti-ticket touting groups. The deal would see both companies brought back under the control of founder Eric Baker.
Upon investigation, the CMA has found that the merger would drive up prices for fans wishing to resell or buy tickets on the secondary market, given the companies are “close competitors in an already very concentrated market with limited alternatives”. (Together, the ticketers hold 80% of the secondary market in the UK.)
“Viagogo is already the largest secondary ticketing company in the UK by some considerable margin and has purchased an established rival, with no other significant competitors in the market,” comments CME executive director, Andrea Gomes da Silva.
“We are therefore concerned that this transaction could lead to customers losing out through higher prices, less innovation and a lack of real choice.”
“[Viagogo] should not be allowed to monopolise for-profit ‘secondary ticketing'”
The CMA also states that the current impact the coronavirus pandemic is exerting on the live events business is unlikely to adversely affect Viagogo and StubHub’s position in the market in the long term, in comparison to other competitors.
Viagogo has five days to address the CMA’s concerns by offering a solution that would maintain effective competition in the UK market. The deal will be referred for an in-depth phase two investigation, if the secondary ticketer fails to do so.
Adam Webb, campaign manager of anti-touting group FanFair Alliance, says the organisation “welcomes” the announcement.
“Viagogo remains a highly controversial business,” says Webb. “The company has widely flouted consumer protection law in the UK, and remains under investigation in numerous other countries. Even today, amidst this terrible crisis that has decimated live music, Viagogo’s suppliers are attempting to sell tickets to cancelled events.
“Such a company, that has created thousands of consumer victims, should not be allowed to monopolise for-profit ‘secondary ticketing’. That outcome would raise significant competition concerns in the UK and threaten to reverse hard-won reforms to prevent abuses in this market.”
“As we have throughout this process, we will continue to work diligently with the CMA during their review of the transaction,” says a Viagogo spokesperon. “We remain committed to our belief that the combination of the two companies is a good move for customers worldwide.”
StubHub, whose president Sukhinder Singh Cassidy announced she was stepping down last month, is currently facing lawsuits in the US and Canada on account of its Covid-19 refund policy.
Ticket touts found guilty of fraud in UK court
Internet ticket touts Peter Hunter and David Smith, who reportedly made almost £11 million from reselling tickets through secondary sites, have been found guilty of fraud today (13 February).
Following a three-month trial at Leeds Crown Court – the first of its kind regarding secondary ticketing in the UK – the pair, who traded as Ticket Wizz and BZZ, were found guilty of fraudulent trading and possessing an article for fraud. Both men had denied all charges.
The touts are believed to have spent over £4m between 2015 and 2017 buying tickets from primary sellers with automated buying software, including 750 Ed Sheeran tickets in 2017 alone. They then sold the tickets on secondary platforms including Viagogo and now-shuttered platforms, GetMeIn and Seatwave, for substantial profit.
According to the National Trading Standards, Hunter and Smith used almost 100 different names, 88 postal addresses and more than 290 emails to evade detection. The touts also engaged in ‘speculative selling’, listing tickets for sale that they did not own.
The pair are also thought to have flogged tickets to shows by artists such as Taylor Swift, Coldplay and Liam Gallagher. Sheeran’s manager Stuart Camp, was among those to testify at the trial, taking action against the resellers after spotting £75 tickets for a Teenage Cancer Trust gig being sold on for almost 1,000 times the price.
“I hope this prosecution leads to a step-change in the secondary ticketing market”
“This is a landmark case for National Trading Standards and should reassure consumers that the fraudulent practices of secondary ticket sellers will no longer be tolerated,” comments Lord Toby Harris, chair of National Trading Standards.
“I hope this prosecution leads to a step-change in the secondary ticketing market, making it easier and safer for consumers buying tickets in the future.”
The verdict is the second victory for anti-tout campaigners this week, after UK watchdog the Competition and Markets Authority (CMA) put the brakes on the Stubhub/Viagogo merger on Monday, leading to a further push for more in depth investigations into secondary ticketing practices.
“Today’s verdict shines further light on the murky world of secondary ticketing, and the dependency of websites such as Viagogo and StubHub upon large-scale commercial ticket resellers,” comments Adam Webb, campaign manager of anti-tout organisation FanFair Alliance.
“We strongly suspect Peter Hunter and David Smith are not exceptional, and that other suppliers to these sites may also acquire tickets by unlawful means – no questions asked.”
“Today’s verdict shines further light on the murky world of secondary ticketing”
Webb adds that the National Trading Standards now must “urgently increase the scope of their investigations”, while calling for the CMA “to apply further scrutiny towards the secondary ticketing market overall.”
“If the likes of Viagogo, StubHub and other secondary sites operate without due diligence, then their directors must be held to account,” says Webb.
When contacted by IQ, a Viagogo spokesperson condemned the use of “software to gain an unfair advantage when buying tickets” and stated the site removed the two sellers “as soon as we became aware of their fraudulent activity”.
The Face-value European Alliance for Ticketing (Feat) similarly welcomes the verdict, which campaign lead Katie O’Leary says is “wholly appropriate given the significance and scope” of the pair’s actions.
O’Leary states that the problem is not limited to “a couple of rogue actors”, stressing that the secondary market is “rife with consumer exploitation”.
“This is a clear example of the lengths that people go to in order to harvest tickets and sell them on at extortionate prices”
“This case is a clear example of the great lengths that people go to in order to harvest tickets and sell them on at extortionate prices to satisfy their personal greed,” continues O’Leary.
“We hope today’s ruling sets a precedent for action against scalpers, both in the UK and across Europe, and encourages more consistent policing and sanctioning of both exploitative traders and the marketplaces which profit from their actions.”
According to Jonathan Brown, chief executive of the Society of Ticket Agents and Retailers, the verdict does set “a hugely significant and useful precedent”.
“Our members worked closely with National Trading Standards to compile the evidence used to secure the conviction and we are pleased they were able to play a role in protecting ticket buyers,” says Brown.
“STAR will continue to work tirelessly to ensure that ticket buying is safe for consumers. Our advice is to buy from STAR members who are authorised to sell tickets for events and comply with a strict code of practice including an approved dispute resolution service in the unlikely event of something going wrong.”
Photo: Raph_PH/Flickr (CC BY 2.0) (cropped)