With Live Nation experiencing surging profits, largely on the growth of the Ticketmaster secondary properties at the expense of StubHub, the company appears to be pinning its hopes for recovery on an unlikely ally: The United States Government.
A well placed industry source indicated that efforts by Ticketmaster to limit secondary supply, combined with effective pay-per-click advertising techniques utilized by secondary competitors, have hastened the decline in the eBay (NASDAQ: EBAY) subsidiaries profit margin. That, coupled with marketing outlays for things like stadium naming rights, are putting the squeeze on the name brand.
Ironically, pay-per-click was an early growth strategy for StubHub, whose founders boasted about the practices’ success in Dean Budnick and Josh Baron’s “Ticket Master’s: The Rise of the Concert Industry and how The Public Got Scalped,” which chronicles the birth and growth of the modern concert and ticketing industry.
With the tide heading the other way, the company is fighting against the current, and it’s reaching out to some powerful allies. In late July, U.S. Representatives Tom Marino (R-PA) and Anna Eshoo (D-CA) wrote a letter to the Federal Trade Commission, urging an exploration of “white label” marketing operations, where a website is created to re-sell tickets to a particular venue or artist, using Google or Bing’s pay-per-click ad services to draw customers.
StubHub characterizes these practices as “deceptive” and “manipulating,” but legally-operated white label sites are required to disclose that they are not affiliated with the venue or artist in question on their front page.
Last week, Senators Orrin Hatch (R-UT) and Cory Booker (D-NJ) penned a similar letter to FTC Chairman Maureen Ohlhausen.
What do these lawmakers have in common? All but one have the beneficiaries of donations from eBay, which, again owes StubHub. Eshoo, who represents California’s Silicon Valley where eBay and StubHub are both headquartered, has received $19,000 donations from eBay alone since 2011, including $5,000 in 2016 while running for re-election. Marino has received $1,000 thus far in 2017 and $8,500 since 2011. Hatch hadn’t received any direct contributions from eBay until this year, but the company made up for it with a $5,000 outlay between Jan 1-Jun 30.
This is only using directly given donations reported on eBay’s Main Street Public Policy page. There is potentially a lot more if one digs deeper, given the overwhelming complexity and opacity in corporate campaign giving in the post-Citizen’s United world.
Of course, eBay is a giant corporation, and gives to a number of campaigns and PACs. There’s no indication that there was any quid pro quo to any of these contributions. It also remains to be seen whether or not the well-placed friends StubHub has cultivated will move the FTC to take action against its competition.
