StubHub’s purchase by Viagogo hit another hurdle this week, as the United Kingdom’s Competition and Markets Authority continued its investigation and related halting of the deal over concerns it would lead to a resale monopoly in the country. Viagogo, which closed the purchase of the leading U.S. resale marketplace co-founded by CEO Eric Baker earlier this year, must address the competition concerns before the deal can proceed.
“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 percent combined and compete closely with each other,” says Stuart McIntosh of the inquiry group. “We are therefore concerned that their merger could lead to secondary ticketing customers facing higher fees and lower quality services. We’re now inviting comments on our provisional findings and possible remedies.”
In the UK, Ticketmaster shuttered its Seatwave and GetMeIn services in recent years in favor of a planned move to a face value-capped resale ecosystem where promoters can draw fees multiple times on tickets that are resold but consumers can only lose money if they cannot attend an event. That leaves Viagogo, based in Switzerland but founded in the UK, and StubHub as the primary traditional resale marketplaces operating in the free market. Viagogo reportedly offered to spin off the EU and UK StubHub entities to satisfy the competition concerns earlier this year, but the regulators did not sign off on that effort.
It is unclear what, if any, alternatives to their concerns the regulators might consider satisfactory. It is possible that the regulator could reject the deal entirely, which could spell disaster for both companies, given the unprecedented pressures on all ticket-related businesses amid the global halt on live events. Baker and Viagogo closed on the $4 billion purchase of StubHub from previous parent eBay earlier this year, but the company would likely be worth a fraction of that at this time. Some have even hypothesized it to be on the brink of bankruptcy due to the pandemic.
For its part, representatives from Viagogo and StubHub – which have been operating independently of one another while the investigation has dragged on – expressed confidence that they would be able to sort out the concerns of the CMA and move forward.
“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,” a Viagogo spokesperson told CNN Business.
“We look forward to the day when the companies can combine to provide consumers wider access to their favorite events,” said a spokesperson for StubHub.
Last Updated on October 22, 2020 by Dave Clark