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.”
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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.
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Stubagogo: One of the worst-timed acquisitions in history?
“As we sit here today, [coronavirus] has not [affected ticket sales], because most of the live events where we’ve seen cancellations have really been in China, and a few in Taiwan and Singapore. Most important for everyone, we hope that they get it under control, and solve the health crisis – but right now it’s been isolated to Asia specifically, and mostly China.”
(Eric Baker, interview with Squawk Alley, CNBC, 21 February 2020)
Viagogo started last month in typically bullish mood.
In the slipstream of their $4.05bn acquisition of StubHub in mid-February, on March 7th the UK’s Daily Telegraph ran a news story suggesting Covid-19 was proving a boon for the secondary ticketing market. While the rest of the live events sector faced impending crisis, listings on Viagogo had apparently risen 45% in the previous week.
According to the report, this was due to “nervous concertgoers and sports fans frantically trying to resell tickets for major events amid the panic around the spread of coronavirus.”
As someone with an interest in this area, I quickly checked viagogo.co.uk.
Strange.
There was no noticeable surge. As per usual, 80–90% of ticket listings were accompanied by star-shaped icons – denoting that the seller is a ‘trader’ rather than a consumer. I contacted the journalist, asking for the evidence to substantiate these claims. (They are yet to return my emails.)
In the month since, events have moved fast.
Despite closing the StubHub acquisition on 13 February – in his CNBC interview, Baker claimed to have paid $2bn in cash and a further $2bn in debt financing – further integration between the two platforms (dubbed ‘Stubagogo’) is being prevented because of an initial enforcement order from the UK’s Competition and Markets Authority, with the possibility of additional investigation.
Viagogo’s ownership of StubHub doesn’t bring much to the party, aside from a highly toxic reputation
Effectively, this has left StubHub in a state of limbo.
Speaking to Billboard, a StubHub spokesperson stated they are “currently operating as an independent company, no longer under the support of eBay but not yet operated by Viagogo.” Albeit if you search eBay for event tickets, the site still defaults to StubHub and describes StubHub as “an eBay company”.
Again, all quite strange.
And then the full impacts of live music shutdown started to unfold.
On March 25th, StubHub announced it was furloughing two thirds of its workforce, swiftly followed by a change in company policy on refunds. Buyers of tickets to cancelled events in North America would now be offered vouchers in lieu of cash.
Predictably, this has already attracted a $5m class-action lawsuit, on the basis that StubHub brought the crisis on itself as a result of their publicly stated policy of paying out their largest suppliers (such as ‘super tout’ Julien Lavallee) in advance of events.
It sounds like rough times ahead.
But if the future looks bleak for StubHub, it’s arguably bleaker for Viagogo.
Moody’s has downgraded Viagogo’s corporate outlook from “stable” to “negative”
Even before Covid-19, the acquisition of StubHub looked wildly overpriced. $4.05bn is reportedly 25 x StubHub’s EBITDA – an astonishing amount for a relatively mature business operating predominantly in the highly congested US market and facing substantial commercial and regulatory challenges.
Viagogo, meanwhile, is a relative minnow in the US. Its ownership of StubHub doesn’t really bring much to the party, aside from a highly toxic reputation. The acquisition has essentially resulted in a change of ownership – no more, no less – whereas a merger between, say, StubHub and Vivid Seats, would have been genuinely transformative and created a much larger market-dominant platform.
Added to this, outside the US, Viagogo’s long-term viability looks far less secure than it did 2–3 years ago. In the UK, the recent sentencing of Peter Hunter and David Smith, who sold substantial volumes of tickets through Viagogo, has imperilled the business model of large-scale resellers on whom the secondary platforms rely. With more trials to come, Viagogo’s supply chain looks to be under threat.
Meanwhile, the company still faces legal actions in several other territories, all of which are likely to probe and cross-examine Viagogo’s less-than-transparent business practices.
An insight into these can be found on the Federal Trade Commission website, in an illuminating exchange of emails between the CMA, Viagogo’s lawyers at CMS, and the FTC – all of which indicate an almost pathological reluctance by Viagogo to disclose information about key staff, key shareholders, its turnover or its byzantine corporate structures including companies such as Basset Capital LLC, Grover Street Holdings, FJ Labs LLC, Andro Capital Management, IFOT Services Ltd and VGL Services.
This could well be one the most poorly timed acquisitions in recent corporate history
Earlier this year, the Moody’s rating agency downgraded the corporate family rating of Pugnacious Endeavors (Viagogo’s parent company) to B2, before changing the company’s outlook from “stable” to “negative” – citing both a “lack of public financial disclosure” and “the absence of board independence” for its changed credit profile.
While we wait for the CMA to make further announcements on the merger, the weeks and months ahead will likely be of some consequence.
Viagogo has already put staff at its customer service centre on 30 days’ “protective notice”. Their purchase of Google advertising appears to have stopped dead.
Listings are dormant, not surging.
But above that is the fact that Eric Baker and his investors appear to have paid out $4.05bn for a crippled business that lies, according to some reports, on the verge of bankruptcy.
In the context of the unprecedented crisis being played out in all our lives, this could well be one the most poorly timed acquisitions in recent corporate history.
Adam Webb is campaign manager for FanFair Alliance.
StubHub ordered not to advertise tickets as “genuine”
UK advertising regulator, the Advertising Standards Authority (ASA), has ruled that secondary ticketing platform StubHub should not advertise tickets as “guaranteed genuine”, following a complaint from anti-tout platform FanFair Alliance.
The ASA ruled that StubHub cannot claim tickets are guaranteed genuine where there is a risk that buyers might not be able to gain entry into an event.
FanFair Alliance issued the complaint about a specific advert claiming it sells “guaranteed genuine tickets”. The complaint states that, as a third-party reseller, StubHub is unable to guarantee that tickets sold on its platform are genuine, rendering the claim misleading.
In response, StubHub claimed that “genuine” refers to tickets not being fake or fraudulent, and does not imply that they are definitely valid for entry.
StubHub states its seller fraud rate is under 0.1% and all orders are backed by its ‘FanProtect Guarantee’, allowing fans to obtain a refund if they do not receive tickets on time or are unable to gain entry to the venue.
The ASA’s ruling considers that consumers would understand “guaranteed genuine tickets” to indicate the definite timely arrival of valid tickets guaranteeing entry to the relevant event.
“We understood that the claim was intended by StubHub to refer to a guarantee that buyers would receive valid tickets for the event or a comparable replacement ticket or refund,” reads an ASA statement. “However, this information had not been presented in the ad.”
StubHub has now removed the advert in question. A spokesperson adds: “Every marketplace order is protected by the FanProtect Guarantee, meaning that in those rare instances something goes wrong with a transaction, fans will receive a comparable or better replacement ticket or their money back.”
“Given the impact of the coronavirus on the live events industry, we have made the difficult but responsible decision to furlough a portion of our employee base”
StubHub is among companies to have temporarily laid off staff due to the ongoing impact of the coronavirus pandemic. According to Celebrity Access, the ticketing platform has furloughed around two thirds of its work force.
“Given the impact of the coronavirus on the live events industry, we have made the difficult but responsible decision to furlough a portion of our employee base,” reads a StubHub statement.
“We continue to support our customers and partners and look forward to a time when we are able to return to the joy of live events and the special, human connections that come with them.”
The secondary ticketing platform is offering fans a StubHub coupon “worth 120% of your original order” for tickets to event cancelled due coronavirus. The coupon can be applied to one or more StubHub orders in within the next year. Those who have sold tickets to cancelled events will have their transaction reversed by StubHub.
If events are not cancelled, but fans no longer wish to attend due to concerns over Covid-19, the site will not offer refunds. Fans are encouraged to resell tickets on the StubHub platform.
Viagogo, the secondary ticketing site that acquired StubHub in a $4.05 billion all-cash deal last year, has announced that all its customers will receive a “full refund” for any cancelled events.
Earlier this month, Viagogo reported a 45% increase in fans listing tickets on its UK site.
“The live events sector has undoubtedly been impacted in the UK. We have seen an overall increase of 45% in fans listing their tickets in the UK this week, but that could be for a variety of factors,” said a Viagogo spokesperson.
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Convicted touts sentenced to 6.5 years in prison
A pair of internet ticket touts have been sentenced to a combined six-and-a-half years in prison, in the first case of its kind in the UK against fraudulent resellers.
Peter Hunter and David Smith, who operated as the company BZZ Limited, received four years and 30 months in jail respectively, following an investigation by the National Trading Standards eCrime Team, and trail at Leeds Crown Court.
Earlier this month, jurors found Hunter and Smith guilty of fraudulent trading – for the resale of tickets that were invalid, at risk of being refused or that they did not own, and reducing the number of tickets available to consumers at face value – as well as of possessing an article for use in fraud – for using ticket bots and credit or debit cards under different names.
The pair committed offences between May 2010 and December 2017, making a net profit of £3.5 million in the last two years of fraud alone, buying and reselling tickets to concerts by artists including Ed Sheeran, McBusted, Taylor Swift and Coldplay, as well as to shows including Harry Potter and the Cursed Child.
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, as well as using specialist software including bots, Insomniac Browser, Omni Checker and Roboform and taking steps to circumvent captchas or IP address detection.
“This is an important milestone in the fight to tackle online ticket touts who fraudulently buy and resell tickets to thousands of victims to line their own pockets,” comments Lord Toby Harris, chair of National Trading Standards.
“It’s a fantastic result for music lovers across the UK, and should also send shockwaves through the likes of Viagogo and StubHub”
“Today’s sentences send a strong message to similar online ticket touts: these are criminal offences that can lead to prison sentences. I hope this leads to a step-change in the secondary ticketing market, making it easier and safer for consumers buying tickets in the future.”
Adam Webb, campaign manager for anti-tout group FanFair Alliance, says that the sentences “a major blow to online ticket touts who break the law and rip off the public.
“It’s a fantastic result for National Trading Standards and for music lovers across the UK, and should also send shockwaves through the likes of Viagogo and StubHub whose businesses are dependent upon large-scale resellers.
“By facilitating the activities of online touts, there must be concerns that the platforms themselves are profiting from the sale of tickets unlawfully acquired by their biggest suppliers.
“This should be investigated as a matter of urgency, and lead to action against those platforms if they have benefitted from the proceeds of criminality.”
Viagogo last week announced it had ‘completed’ its US$4 billion all-cash acquisition of StubHub, although the merger still needs approving by regulatory bodies, including the UK’s CMA, before they can operate as one entity.
Photo: Markus Hillgärtner/Wikimedia Commons (CC BY-SA 3.0) (cropped)
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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)
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Ethical ticket resales up 50% at See Tickets
See Tickets has sold 50,000 tickets through its ticket resale platform Fan-to-Fan in 2019 so far, 25,000 more than in the same period of last year.
Launched in 2017, Fan-to-Fan was the UK’s first integrated face-value ticket resale platform. The service allows customers to resell unwanted tickets at the price they paid for them or less.
“We were the first ticket agency to bring a truly integrated ethical resale site to the market and figures show the service is more in demand than ever,” comments See Tickets CEO Rob Wilmshurst.
“Buyers and sellers want a fair resale platform they can trust and because we only list tickets originally purchased on our site, we can vouch for everything being resold in terms of its validity.”
“Buyers and sellers want a fair resale platform they can trust and because we only list tickets originally purchased on our site, we can vouch for everything being resold in terms of its validity”
See Tickets launched a secure, non-transferable digital ticketing system earlier this year, issuing tickets with dynamically refreshing barcodes that are uniquely tied to the fan’s user account, mobile device and See Tickets app. The feature has been used on tours for artists including Declan McKenna and Bombay Bicycle Club.
See Tickets also created a paperless ticket for Ed Sheeran’s summer shows in conjunction with promoters DHP and Kilimanjaro.
Adam Webb, campaign manager for anti-tout group FanFair Alliance says: “See Tickets have been vocal about their opposition to exploitative secondary ticketing for many years and FanFair has welcomed the steps they have taken to eliminate touting and provide a better customer experience. It’s really encouraging to see ticket buyers embrace Fan-to-Fan in such numbers.”
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“A huge concern”: Live industry reacts to StubHub buy
Controversial secondary ticketing site Viagogo yesterday (25 November) acquired StubHub from eBay in a US$4.05 billion all-cash deal, returning both companies to founder Eric Baker’s hands and eliciting strong reactions across the live music industry.
The sale to Viagogo – a consequence of pressure from eBay shareholders for the company to divest itself of StubHub – followed reported interest from multiple parties, including US resale marketplace Vivid Seats, and saw the e-commerce giant receive almost 13 times its original investment.
As IQ speaks to ticketing experts and commentators, a question on the lips of many is: “Just how did Baker raise the funds for the all-cash deal?”
More technical concerns include what the deal means for the future of the secondary ticketing market; how it may be used to “detoxify” Viagogo’s brand – or not; how regulators will react to the deal; and how much more likely are consumers to get ripped off.
Adam Webb, campaign manager, FanFair Alliance
“This feels like a desperate move from both parties.
“However, news of this acquisition should be a major concern for both audiences and music businesses – especially if Viagogo, a company that recently had a court order hanging over its head and is still the subject of a CMA investigation, uses this process as an attempt to detoxify its brand.
“FanFair will be writing to UK regulators and politicians and we reiterate our advice to music fans to avoid these sites.”
Katie O’Leary, campaign lead, Feat (Face-value European Alliance for Ticketing)
“It’s alarming to think of Viagogo potentially gaining an even greater stronghold in the secondary ticketing market, given it’s been the subject of various legal actions across Europe and banned from advertising on Google globally. (Google last lifted Viagogo’s ban on advertising. For more information, click here.)
“Viagogo claims this will create a ‘win-win for fans’, but further consolidation in the secondary ticketing market would most likely restrict competition, and further negatively impact fans.
“We hope that regulators will have consumers’ best interests at heart when considering this deal, and consider not only the question of Viagogo’s increased dominance but also whether they can be considered a fit and proper owner.”
“We hope that regulators will have consumers’ best interests at heart, and consider whether Viagogo can be considered a fit and proper owner”
Anton Lockwood, director of live, DHP Family
“Coupled with the disturbing news that Google is allowing Viagogo to advertise again, we see this as a step backwards in the fight against inflated price secondary ticketing, Viagogo’s brand has become toxic in the last few years and this seems like an attempt to cleanse it.
“At DHP we stand strongly against unscrupulous traders selling tickets at inflated prices, at the expense of genuine fans – this acquisition can only serve to further that, and we urge the regulators to look very closely at what the new company does.
“We always advise buying tickets from primary vendors or face value secondary vendors who are members of Star to obtain genuine tickets, at the correct price with consumer protection in place.”
Neo Sala, founder and CEO, Doctor Music Concerts
“Viagogo may hope that their reputation will be greenwashed through association with Stubhub, who have historically kept more in line with regulation — but both have a long history of ripping off fans.
“I have no doubt that if this gets cleared it will be bad news for fans, as well as those of us who invest in the live sector. Coupled with the news from Google, it’s really concerning to see things take such a backwards step.”
“At DHP we stand strongly against unscrupulous traders selling tickets at inflated prices, at the expense of genuine fans”
Claudio Trotta, founder, Barley Arts
“In my more than 40 years in the business, this is one of the worst pieces of news I have received.
“It is really scary – first of all, the fact that Viagogo can spend $4 billion in cash is very worrying. Secondly, that Viagogo has bought a competitor that operates in most countries in the world means we are really far away from winning the battle against this cancer – and I do truly believe it is a cancer. I am sure they have made this deal because they absolutely know they can carry on doing secondary ticketing in the majority of countries in the world and circumvent the laws that are in place.
“This is very bad for the future of industry – for music, for punters, and for overall quality. Music is in danger of becoming only for rich people and for fanatics – the only people capable of paying inflated secondary prices.
“We need to do something against this, otherwise live music will be dead in the way we know it. With these prices, there would be no new acts either, which means no more future.
“In Italy, there is a law against secondary ticketing, and also a law on nominative tickets. I am the only one of the major Italian promoters in favour of this law. I think the future is to have complete digitalisation of tickets, and for each to have a unique code. This is the only way to fight secondary ticketing.”
“In my more than 40 years in the business, this is one of the worst pieces of news I have received”
Dave Newton, ticketing professional
“In North America the deal will make no noticeable change as StubHub already dominates the resale market along with having an appreciable share of the primary market (especially in the sports sector) and Viagogo has no presence there.
“But in Europe, Australia, New Zealand and elsewhere, we may see the increasingly toxic Viagogo brand put out to pasture as its market share is folded into the now-established StubHub brand in each of these territories.
“There is a scenario whereby the Viagogo brand is kept alive for a while as a way of deflecting anti-tout activity and attention from StubHub which has been generally been regarded as ‘the best of a bad bunch’ over the last five years. Viagogo could soak up the emotional ire of the media, customers and the events industry while StubHub quietly holds onto its more collaborative and conciliatory reputation.
“Could we see primary ticketing agencies launching resale platforms in Europe if StubHub succeeds in becoming the acceptable face for touting? There may also now be room for significantly-funded new entrants into the space.
“And where does this leave the ticket-buying fan? No less ripped-off, that’s for sure.”
“We may see the increasingly toxic Viagogo brand put out to pasture as its market share is folded into the now-established Stubhub brand”
Annabella Coldrick, CEO, MMF (Music Managers’ Forum)
“On the back of the FanFair Alliance campaign, we’ve seen huge steps to reform the UK’s secondary ticketing market and put a stop to the rip-off, anti-fan practices of sites like Viagogo. For that reason, the announcement is a huge concern.
“The consolidation of the biggest remaining platforms for ticket touts could potentially reverse progress and cause untold harm for audiences and artists alike.”
Rob Wilmshurst, CEO, See Tickets
“I had to check my calendar to make sure it was not April Fools’ Day. I am very, very surprised, not just at the scale of the deal but at where the cash might have come from.
“I am no fan of ticket touting so I can’t say it made my day but it is what it is. In any case, I congratulate Eric for pulling it off.”
Richard Davies, CEO, Twickets
“This is further terrible news for ticketing as two deceitful operators combine forces in order to further turn the screw on the consumer. It demonstrates the need more than ever for a specialist face value resale service that properly serves genuine fans.”
“The consolidation of the biggest remaining platforms for ticket touts could cause untold harm for audiences and artists alike”
Maarten Bloemers, CEO, Guts Tickets
“In five years I expect this to be deemed a total waste of money. It’s a joining of forces of two eerily similar entities companies, the main similarity being that they do not care in the slightest about the consumer they are supposedly serving.
“Technological innovation is making these businesses obsolete, and will put the priority back with the consumer, where it belongs.
Jonathan Brown, chief executive, Star (The Society of Ticket Agents and Retailers)
“We note with interest the news that Viagogo has bought StubHub and will continue to watch developments closely.
“Customers need to know where they can buy tickets reliably from authorised sources and the best way of doing this is to always buy from Star members who have signed up to our code of practice and approved dispute resolution service.”
Adam French, consumer rights expert, Which?
“Viagogo has a long history of ripping off music and sports fans and had to be threatened with court action after failing to provide vital information to customers, so any move to increase its grip on the secondary ticketing sector is likely to be a worry for consumers.
“The regulator should closely examine this deal and the impact it could have on competition in the sector to ensure consumers do not lose out.”
This article will be updated with more reactions as IQ receives them.
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FanFair Alliance launches guide to tackle touting
FanFair Alliance, the music industry campaign established in 2016 to tackle “industrial-scale online ticket touting”, has today (Tuesday 17 September) published new guidance to help artists and managers to tackle secondary ticketing.
The guidance, which was developed alongside new model terms and conditions published by the Society of Ticket Agents and Retailers (STAR) and is backed by the UK’s Music Managers Forum (MMF), can be downloaded here.
The guide advocates that artists, event organisers and venues make two clear and upfront statements in their terms and conditions of sale – that tickets are for consumers only to purchase, and that audiences are permitted to resell tickets for the price they paid or less, and that a consumer-friendly resale or reallocation mechanism is provided.
The alliance hopes that the cost-free measures will empower artists and organisers to employ a wider range of acts to prevent exploitation of fans, while promoting fairer ticket resale practices.
The publication follows major developments in the fight against the UK’s secondary ticketing market, including the provision of detailed information about the tickets listed on secondary sites – in keeping with consumer protection law – an end to misleading marketing practices such as “drip pricing” and the suspension of infamous secondary site Viagogo from Google search advertising.
The introduction of “consumer friendly” resale services, including AXS Official Resale, Ticketmaster’s Ticket Exchange, See Ticket’s Fan-to-Fan and CTS Eventim’s FanSALE, has also given fans alternative resale options.
According to STAR chief executive Jonathan Brown, the use of such authorised resale systems “helps to combat unwanted excesses in the secondary ticket market.”
“As well as disrupting the practices of dedicated touts, our aim is that [artists] will help promote a fairer and more transparent ticketing market”
Despite developments, YouGov data, viewed by FanFair Alliance, suggests online ticket touting remains a concern for live music fans, with 79% of concertgoers surveyed in April 2019 stating that “too many tickets end up on reselling sites for inflated prices” and 67% affirming that artists “should do more” to prevent this practice.
A recent decision by the UK’s Competition and Markets Authority to halt legal actions against Viagogo prompted further concerns from anti-tout groups and live industry professionals.
“The message from audiences remains pretty clear and consistent,” says FanFair campaign manager Adam Webb, who recently aired his thoughts on the continued need for action against Viagogo in IQ. “They’re still sick of exploitative online ticket touts, and they expect artists, event organisers and venues to do something about it.
“And here’s the good news: they can. The UK is now leading the way in the fightback against unscrupulous secondary ticketing practices. Artists have been empowered to take action.
“There’s a number of strategies they can pursue, but the no-cost recommendations in this guidance are open to all. As well as disrupting the practices of dedicated touts, our aim is that they will help promote a fairer and more transparent ticketing market.”
MMF chief executive Annabella Coldrick agrees, stating that “artists and their teams now have real power to take back control of their ticket prices by using simple T&Cs and offering consumer-friendly resale to fans,” urging “all managers to read this guide and use it.”
The full guide can be read online for free here.
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Why the fight against Viagogo is far from over
When the FanFair campaign launched in July 2016, the UK’s secondary ticketing market was in the midst of a golden era. It was a fantastic time to be a ticket tout.
The market was dominated by four sites: Viagogo, StubHub, Get Me In! and Seatwave – and on a weekly basis, huge volumes of tickets would flood onto these platforms during event pre-sales or just past 9 a.m. on a Friday morning. For certain shows, it was incredibly hard to buy a ticket at the face value price.
Meanwhile, legislation designed to protect consumers and provide transparency was flouted across the board. The secondary platforms gave little indication about where your ticket was located or its original face value, never mind who you were buying it from.
The impact on audiences was horrendous, with unwary customers also being ripped off and led astray by misleading advertising – particularly search advertising – and fast and loose marketing practices such as “drip pricing”.
Effectively, this was a peer-to-peer market built around anonymity and populated by chancers, rent-seekers and outright fraudsters.
Against this backdrop, a beacon of hope emerged – the UK’s business regulator, the Competition & Markets Authority, or CMA.
On the back of mounting evidence, much of it supplied by FanFair, and an illuminating session at the Digital Culture Media and Sport Select Committee, the CMA launched a major investigation into secondary ticketing in December 2016.
In April 2018, this investigation bore its first fruits, with StubHub and Ticketmaster agreeing to undertakings under the Enterprise Act – committing to comply with various consumer protection laws. A few months later, Ticketmaster UK retreated from secondary ticketing entirely, in another hugely positive step.
Viagogo was always the most problematic of the platforms, and responsible for the vast majority of consumer victims
Viagogo, however, ploughed forward. The secondary site now had the ditch to itself. Always the most problematic of the platforms, and responsible for the vast majority of consumer victims, Viagogo carried on breaching the law, carried on misleading audiences and carried on wreaking havoc.
With a sense of detachment akin to that of infamous London football team Millwall (“no one likes us, we don’t care”), Viagogo even snubbed Select Committees, on not one, but two separate occasions.
And then, in November 2018, with pressure mounting and with Creative Industries Minister, Margot James, publicly advocating a boycott, Viagogo finally appeared to be snookered – pushed to the courthouse steps, they agreed to terms in a wide-reaching CMA court order. With this Sword of Damocles hovering, the platform was given two months to “overhaul” its business model, not merely complying with the law, but also making fundamental changes to its website.
The mid-January ultimatum laid out in the court order, however, came and went. After self-declaring its own compliancy, Viagogo did next to nothing.
By the end of the month, the CMA had declared “serious concerns” about Viagogo’s compliance with the court order – at which point, the penny appeared to drop. Incrementally, improvements started to become visible – some tickets were listed with seat numbers attached, names of “traders” (aka touts) were provided, and some of the distractive marketing tactics were toned down.
However, Viagogo still appeared to fall some way short of its obligations, and on 5 March the CMA repeated its warning. Finally, the regulator appeared to snap, announcing in early July that Viagogo had still not done enough, and legal proceedings for contempt were moving forward.
As far as campaigners and victims were concerned, this was fait accompli. Despite some obvious improvements, Viagogo had not kept its side of the bargain and consequences were expected to follow.
FanFair, and others, continued to submit evidence and awaited further news. A contempt verdict, even if not resulting in punitive action, would still provide an important marker and hopefully keep Viagogo in future check.
Even with the regulator breathing down its neck, Viagogo has exhibited breathtaking arrogance in its disregard for consumers and legislators
But then, out of the blue, the CMA announced that court action was being suspended. In a short statement, and without specific explanation, the regulator declared that “outstanding concerns” with how Viagogo “presents information” had now been addressed.
In response, and in words that will surely stick in the craw of every right-thinking music fan, a Viagogo spokesperson commented that, having “worked collaboratively” with the CMA, they now looked forward to “challenging the wider ticketing market to raise its standards in the interests of all in the live event world”.
This was fairly astonishing. Having forced this hugely controversial website to the brink of compliancy, the CMA appeared to relinquish its grip. What was presented by the Guardian newspaper as potentially “one of the worst businesses in Britain” was now giving lectures about standards. Considering the same company might have been in court eight months previously, it was pretty galling stuff.
So what next? To some extent, Viagogo has been hoisted by its own petard.
Due to Google’s positive move to globally suspend Viagogo’s search advertising in July 2019, web traffic to the site appears to have sunk. Meanwhile, because of the CMA’s work and the application of regulatory pressure, UK consumers do indeed have far greater transparency when browsing Viagogo, certainly compared to Viagogo users in other countries. Artists and organisers also have more power to exert control over their own events.
However, concerns still remain that the clean-up is not complete, and today (11 September) I have sent yet more evidence to the CMA – not only outlining what look like new and continued breaches of consumer law by Viagogo, but also detailing what appear to be continued breaches of its court order.
Even with the regulator breathing down its neck, the site has exhibited breathtaking arrogance in its disregard for consumers and legislators. That raises a real fear that, when the CMA decides to close down its investigation, as it surely will at some point, Viagogo will simply renege on progress and revert to their default setting.
More fundamentally, surely it also sends out the wrong kind of signals to rogue businesses that persist in ripping off the public, and risks holding back what we should all be pushing for – a properly functioning market with the interests of ticket buyers at its heart.
Adam Webb is campaign manager of anti-tout group FanFair Alliance.