Prior to the Competiton and Markets Authority’s decision to send its review of Viagogo’s purchase of StubHub to a phase two investigation, the regulator shot down a proposal by the Swiss-based company to sell off the European StubHub entities to alleviate competition concerns, according to multiple outlets. The CMA has held up the $4 billion transaction due to concerns that Viagogo and StubHub’s becoming part of the same company would lead to a “substantial lessening of competition” for consumers seeing tickets on the secondary market. The investigation will conclude by December 9 of this year.
“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,” the regulator said in a statement regarding its refusal of the divestment as a remedy to its concerns. “[The proposed sale] would not fully address the significant competition concerns identified in the SLC Decision without the need for further investigation.”
In the United Kingdom, StubHub and Viagogo account for an estimated 80% of the secondary ticketing business, which became far more concentrated when Ticketmaster shut down its GetMeIn and Seatwave brands to focus on face value-capped marketplaces. It is unclear whether or not companies operating as capped resale marketplaces (Ticketmaster’s or others like Twickets) are counted in that market share equation. That market share was concerning enough to the CMA to put a halt to its completion despite the transaction being finalized earlier in the year.
It is unclear who Viagogo was intending to sell the UK operation of StubHub to, or whether or not a buyer was actually in place, but it is apparent that the regulator did not feel that a sold-off StubHub without it’s former parent (eBay) would be a strong enough competitor to Viagogo, which could then assume what amounts to a monopoly position in the ticket resale marketplace overseas.
The continued investigation comes at a particularly difficult time for all secondary ticketing marketplaces (and live events as a whole) as the coronavirus pandemic has ground events on both sides of the Atlantic to a halt. StubHub has drawn fire for its decision to only offer cash refunds for cancelled shows in jurisdictions where they are required to be offered by law. It also saw the departure of its CEO following large-scale furloughs due to the pandemic, though the interim CEO Jill Krimmel has expressed optimism in the return of live events and the company’s prospects for the future of late.