StubHub International appoints Dan Mucha as CEO
Ticket resale platform StubHub International has appointed Dan Mucha as chief executive officer.
Mucha will be responsible for developing best-in-class marketplaces and will spearhead plans around customer experience, customer trust and quality supply, according to the company.
Mucha joins from online personalisation business Photobox Group, where he was CEO. Prior to that, he held senior operating roles at Amazon and MSNBC, and, earlier in his career, was a consultant at McKinsey & Company.
“We are thrilled to welcome Dan to the team,” says Atle Skalleberg, operating partner StubHub International investor Digital Fuel Capital. “As StubHub International continues to grow, he will bring strategic and customer-centric leadership. We are confident that he will lead an engaged team in building the best marketplace for buying and selling international event experiences.”
“As StubHub International continues to grow, he will bring strategic and customer-centric leadership”
Mucha adds: “StubHub International is more relevant than ever as we see the world returning to live event experiences. I’m excited to join a customer-obsessed business with massive growth potential and a team that is passionate about our purpose: to connect people to inspiring live event experiences. I look forward to building on the team’s progress to offer the best service to global buyers and sellers of tickets to live event experiences.”
StubHub International was established following the UK Competition and Markets Authority’s inquiry into the merger of Viagogo and StubHub.
The watchdog said that StubHub must divest its business outside North America in order to secure regulatory approval for its takeover by Switzerland-based Viagogo, which was largely complete by February 2020.
In September, StubHub’s international business was sold to Boston-based investment firm Digital Fuel Capital LLC for an undisclosed sum. StubHub International consists of businesses in the United Kingdom, Germany, France, Spain, and other international markets.
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StubHub to wind-up San Fran and Shanghai offices
StubHub has revealed plans to close its San Fransisco and Shanghai offices by the end of the year, and lay off the majority of employees based in each location.
According to CEO Eric Baker, the decision comes as the ticket resale platform looks to optimise and streamline its operations following Viagogo’s takeover of the company.
Baker says that the business will focus on building its new offices in New York and Los Angeles and using these locations as key hubs for in-person work.
StubHub announced the news via a post on LinkedIn, which included a copy of the letter that Baker sent to employees.
The CEO wrote: “This is never easy news to share. Those who are impacted by these changes have already been contacted by our People Team about their individual departure plans.
“To the team that remains, it’s growth time”
“We are grateful for the contributions of these employees and wish them well as they go on to their next chapters.
“To the team that remains, it’s growth time. Moving forward, our work will focus on in-person participation in our offices around the world, which – in addition to LA and NY – will still include locations in Utah, Switzerland, Ireland and Taiwan.”
In September last year, Switzerland-headquartered Viagogo got the green light from the UK Competition and Markets Authority (CMA) to complete its takeover of StubHub.
The deal was approved after it was agreed that StubHub would sell its business outside of North America – including the UK – to investment firm Digital Fuel Capital LLC for an undisclosed sum.
Viagogo originally agreed the purchase of eBay’s ticketing division StubHub for $4.05bn in cash in February 2020.
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StubHub may go public with $13bn valuation
StubHub Holdings, which operates ticket resale platforms StubHub and Viagogo, is considering going public via a direct listing.
The company has reportedly filed paperwork with the US Securities and Exchanges Commission and could pursue a direct listing as soon as this year, according to Bloomberg.
A transaction may value StubHub at more than US$13 billion, and the firm is said to be working with advisers including JPMorgan Chase & Co and Goldman Sachs Group Inc on the potential listing.
The firm is said to be working with advisers including JPMorgan Chase & Co and Goldman Sachs Group Inc
In a direct listing, companies don’t issue new shares as in a traditional IPO, and its investors don’t have to wait for a lockup period to sell stock.
In September last year, Switzerland-headquartered Viagogo got the green light from the UK Competition and Markets Authority (CMA) to complete its takeover of StubHub.
The deal was approved after it was agreed that StubHub would sell its business outside of North America – including the UK – to investment firm Digital Fuel Capital LLC for an undisclosed sum.
Viagogo originally agreed the purchase of eBay’s ticketing division StubHub for $4.05bn in cash in February 2020.
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International Ticketing Report 2021: Secondary ticketing
The International Ticketing Report is a one-off annual health check on the global ticketing business, with emphasis on the sector’s response to the Covid-19 pandemic.
The past two years have been turbulent for the business, but with consumer demand for live events now at an all-time peak, the challenges of fulfilling the most packed event schedule in history will test ticketers to the hilt.
Staffing, vouchers schemes and refunds, demand, consumer behaviour, communication, new products & services, secondary ticketing, pandemic lessons and recovery are among the challengers addressed by industry-leading experts in this extended report.
The report, originally published in IQ105, is in lieu of the International Ticketing Yearbook – a standalone global guide to the live entertainment market that will return in 2022.
IQ will publish sections of the International Ticketing Report over the coming weeks but subscribers can read the entire feature in issue 105 of IQ Magazine now.
To read the previous instalment of the report on new products and services, click here.
The controversial business of secondary ticketing was never far from the headlines, pre-Covid, and indeed on the eve of the pandemic being declared, leading European operation Viagogo acquired eBay’s ticketing division, StubHub, for an eye-watering $4.05billion (€3.5bn) in cash.
The timing of that transaction, in February 2020, led to financial publication Forbes branding it the “worst deal ever” as sports and live entertainment were among the first sectors to close down, effectively shutting down the secondary market, too.
Since then, Viagogo sold its StubHub assets outside of North America, primarily to meet anti-competition regulations, but with little to no revenues over the past 18 months, the company will be determined to make the most of 2022’s packed events schedule to start clawing back some of that substantial investment.
According to Adam Webb, campaign manager at FanFair Alliance, an anti-touting campaign group, “The fear now is that the secondary players will be as desperate to get as much inventory as they can, and the other side of that is that some promoters will be desperate to sell tickets any which way, as well.”
“There’s still a lot of work to do on the industry’s behalf educating their consumers about capped resale services”
With thousands of tours, festivals, and other events going on sale in the weeks and months ahead, Webb is all too aware that many people may need to use secondary services to divest of tickets for rescheduled shows they can no longer attend for any number of reasons.
Webb contends that while those ticket exchange platforms with capped resale rules also suffered during the pandemic, they also seem to have weathered the storm.
“Just before the likes of Reading and Wireless festivals, there were loads of tickets available on places like Twickets, so there was real need – possibly driven by Covid – for a lot of people to genuinely resell their tickets,” says Webb.
“Because of dates being rescheduled or people who have health concerns, I think having that option through is probably more vital than ever, and there will be a need for primary agents to up their game a little bit to make sure fans are aware of those ticket exchange services, what they are and how to use them.”
He adds, “Going into 2022, with the calendar busier than probably ever before, lots of consumers are still unaware of the difference between an uncapped seller like StubHub or Viagogo and the primary ticket services.
“So I think there’s still a lot of work to do on the industry’s behalf educating their consumers about capped resale services and how to use them. All of the primary ticket companies have a resale service or are affiliated with one but those services need to be marketed a bit better.”
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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.”
In 2021 so far, Viagogo has been investigated for violating laws in countries including Austria, Italy and Australia.
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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The likes of Viagogo are actually weak and damaged
How must the smart people at Bessemer Venture Partners and Madrone Capital Partners, the two VC funds that bankrolled Viagogo’s US$4.05bn acquisition of StubHub, be feeling right now?
For Madrone, in particular, it’s been a tough couple of years. As well as losing $150m in the crash and burn of Theranos, they were also the lead investor in Quibi, backing the ill-fated short-form video service to the tune of $200m during the upwards part of its firework-like trajectory.
And then they met Eric Baker.
Much has been written about how the Viagogo/StubHub merger, completed one month before the world shut down, was, in the words of Forbes magazine, “The Worst Deal Ever”.
I’ve written about it myself, on this website – highlighting how the deal appeared wildly overpriced, even before we all became self-professed experts in vaccines and lateral flow testing, and how a combination of regulation and innovation were, in the longer-term, likely to fundamentally disrupt a secondary ticketing “business model” wholly dependent on search advertising and large-scale touts.
Added to that was the spectre of an investigation by the UK’s business regulator, the Competition & Markets Authority, who duly put the merger on hold, concluded that the acquisition created a “significant lessening of competition” in the UK, and subsequently ordered Viagogo to sell-off StubHub’s international operations before integration can complete.
There’s evidence to suggest much of the inventory on Viagogo doesn’t actually exist
Would-be suitors for the international (ie loss-making) parts of StubHub, as well as being approved by the CMA, will be required to run the platform as an uncapped resale service and in direct competition with Viagogo. In the current environment, that sounds a fairly unalluring prospect. Although, as Madrone has repeatedly highlighted, fools and other people’s money can be easily parted.
Meanwhile, and perhaps more alarming for those beleaguered investors, the credit rating of Viagogo’s parent company PUG LLC started to nosedive. They took on an additional $330m in loans, and then, earlier this year, informed regulators in Australia – who’d hauled them over the coals for making false or misleading representations when reselling tickets – that they couldn’t pay a AUD$7m fine due to the catastrophic impacts of the pandemic.
Oh, and Eric Baker reportedly embarked on a property spree in Beverly Hills, completing the purchase of his third mansion in September 2020 for $39m. Presumably, the pandemic not being quite so financially catastrophic for him personally.
And now, as detailed in a Guardian yesterday, there’s evidence to suggest much of the inventory on Viagogo doesn’t actually exist, and that speculative selling – some of it by businesses likely connected to Viagogo itself – is rife.
This could now be the opportunity to step up, to standardise the changes outlined in the FanFair guide
I certainly hope Bessemer and Madrone have digested the implications of Rob Davies’ latest investigation into the bizarre and artificial constructs of this market – and that they’ve studied the February 2021 Phase 2 Final Report from the CMA, which concluded that the value of tickets resold through the UK’s online ticketing platforms in 2019 was around £350m. Somewhat less than the £1.5-2.5bn estimated by Viagogo and StubHub.
As we all wait optimistically for gigs and festivals to return, and for normal life to resume, I hope that promoters, agents, artist managers, venues and primary ticket companies are also taking note, and recognising that, rather than all-powerful platforms, the likes of Viagogo are actually weak and damaged enterprises – and that the UK industry has been greatly empowered over recent years to prevent the exploitation of customers in the secondary market and offer them a better and fairer alternative when it comes to resale.
The wider industry can, of course, choose to do nothing. Shrug shoulders. Say how terrible ticket touting is while failing to enact the fairly simple measures that can help prevent it.
Alternatively, this could now be the opportunity to step up, to standardise the changes outlined in the guide FanFair published back in September 2019, and ensure there’s a wider push to properly communicate how resale works, and that those services are the best they can be.
Viagogo disputes the claims made in the Guardian article. A spokesperson says: “Viagogo rejects the unsubstantiated allegations in the Guardian article referenced in this piece. No evidence was outlined in the article nor was any provided to the company despite repeated requests.
“There is a mechanism in place to raise issues formally either with Viagogo or the regulator. The Guardian chose instead to write a misinformed article.
“Viagogo has strict measures in place to ensure the accuracy and compliance of listings and to prevent fraudulent selling, which are audited annually by a third party.
“In all transactions there is an onus on the seller to agree to certain terms and conditions, which includes the right to sell a ticket.
“Where we are provided with proof from a relevant authority of an abuse of these rules we will investigate and, if confirmed, action will be taken.”
Adam Webb is campaign manager for FanFair Alliance.
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.
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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.”
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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.”
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