The Competition and Markets Authority announced Tuesday that Viagogo must spin off some StubHub operations to address competition concerns it had with the merger, which has been held up by the UK regulator since early 2020. Viagogo, which paid an estimated $4 billion to purchase the ticket resale marketplace from eBay last year, must sell the non-North American operations of the company in order for the merger to go through, with conditions in place for the sale set by the regulator.
“The CMA has focused on ensuring competition in this sector works best for UK consumers,” says Stuart McIntosh, Chair of the CMA inquiry group. “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.”
Viagogo, owned by StubHub co-founder Eric Baker, emerged as the surprise winner in the StubHub sale process a year ago, after eBay was pressured by activist investors to spin off its ticket resale subsidiary and market leader. But the CMA quickly challenged the merger, finding that it would “lead to a substantial reduction in competition in the secondary ticketing market in the UK.” Much of the last year has been spent with StubHub stuck in limbo, maintaining independent operations from its new parent company as the pandemic halted nearly all business.
Interestingly, the solution proposed by the CMA is one that Viagogo itself had suggested earlier in the process, only to see the regulator reject that remedy as insufficient. In the ensuing months, foes of Viagogo have piled on, suggesting that the merger be unwound entirely. In one notable instance, Baker’s StubHub co-founder Jeff Fluhr suggested that the regulator force a sale to him (and associates).
Viagogo’s options in the sale of StubHub’s international businesses will be determined in partnership with the CMA, including who is eligible for the process, and what the terms of such a sale might be.
“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,” McIntosh says.”
The full release announcing the CMA decision is available here. Additional information is available at the regulator’s inquiry case page here.