Cold War Kids perform onstage at StubHub during SXSW in March 2018 in Austin, Texas.
Topline: EBay’s $4 billion sale of ticket reseller StubHub to Swiss competitor Viagogo comes after activist investors had pressured the struggling ecommerce giant to unload its more distant assets.
- The combined companies will resell tickets in over 70 countries once the deal is completed.
- The Wall Street Journal reported in January that two activist investors, Elliott Management and Starboard Value, advised eBay to shed parts of its business—specifically StubHub and an international classifieds service—that were unrelated to its online marketplace (eBay’s stock rose 1% on the news).
- Viagogo has been mired in legal issues across the world over the past two years, including being found guilty by an Australian court in April of misleading customers, and in July was temporarily suspended by Google from advertising on its platform due to policy violations.
- A Viagogo spokesperson said it has worked with Google “to address the concerns” and has “returned to its traditional relationship” with the Mountain View-based tech company.
- Most recently, Viagogo narrowly avoided legal action in the U.K. over the way it communicated ticket availability and other information to customers, but a government watchdog backed down after Viagogo made changes to its website.
Key background: Before he started Viagogo, CEO Eric Baker also founded StubHub while he was still in business school. Baker sold StubHub to eBay for $310 million in 2007. Since then, eBay has been struggling as consumers change their online shopping habits. Although eBay historically touted itself as an online auction website, 80% of its total sales are new items sold at a fixed price. StubHub accounted for 14% of eBay’s third-quarter earnings—and eBay warned investors its fourth-quarter results could decline for the first time in four years StubHub has also been involved in various lawsuits over the years; one class action claim, filed in February in California’s Superior Court, accused StubHub of unlawfully tacking on ticket fees. Spokespeople for eBay and Viagogo declined to comment on the class action.
Tangent: According to a Viagogo spokesperson, both it and StubHub will continue operating independently of each other in the immediate future. The spokesperson said no layoffs or organizational changes are planned.
