Viagogo Is Buying StubHub From eBay For $4.05 Billion In Cash

By Amit Chowdhry ● Nov 25, 2019
  • eBay announced it is selling StubHub to Viagogo for $4.05 billion in cash

eBay has announced it is selling StubHub to Swiss ticket company Viagogo for $4.05 billion in cash. The sale is likely going to close by the end of the first quarter subject to regulatory approval and customary conditions.

Interestingly, Viagogo CEO Eric Baker co-founded StubHub, but left the company before it was sold to eBay for $310 million in 2007 due to differences with his business partner. This detail was revealed by Baker in an interview on CNBC’s “Squawk on the Street.” Baker was still a shareholder, but he did not have control in the decision to sell the company to eBay.

“If it was up to me I wouldn’t have to buy it back because I never would have sold it, but everything worked out in the end,” said Baker via CNBC. “The opportunity to combine the two and have true global coverage just made too much sense.”

The two companies are going to operate independently for some time. And executives will plan ways to integrate the businesses in the future.

StubHub and Viagogo would create a ticketing powerhouse and hit revenues of about $15 billion next year combined. Viagogo operates in 70 countries and is especially popular in Britain. And StubHub sells tickets in 44 countries and is especially popular in the U.S.

“Eric clearly sees strong opportunity for the two businesses. He founded StubHub 19 years ago and feels so passionately about the business that he organized his people and the financial resources to buy it back. He is all in, which is fantastic for the company going forward,” added a StubHub spokesperson in a statement.

There are no leadership changes planned as of now. StubHub president Sukhinder Singh Cassidy told The New York Times that the StubHub brand will continue going forward.

eBay is going to use the proceeds from the deal to put toward stock buybacks, dividends, and M&A investing, according to interim eBay CEO Scott Schenkel.

“Over the past several months, eBay’s leadership team and Board of Directors have been engaged in a thorough review of our current strategies and portfolio, and we concluded that this was the best path forward for both eBay and StubHub,” stated Schenkel.

Baker came up with the idea for StubHub while trying to buy a secondhand ticket for “The Lion King” on Broadway, according to The New York Times. But the high prices and hassle helped him come up with the idea for StubHub. Baker developed StubHub with Jeff Fluhr in 2000 while they were students at Stanford’s business school. Baker left StubHub six years later and launched Viagogo.

Last year, StubHub sold $4.75 billion worth of tickets and generated $1.1 billion in fees. But it has been facing aggressive competition from rivals like Seatgeek and Ticketmaster. Now Ticketmaster sells tickets on the secondary market.

eBay’s investors like Starboard Value and Elliott Management have been pressuring the company to sell some of its assets such as StubHub. Devin Wenig stepped down as eBay’s president and CEO in September due to differences with the board.

Viagogo and StubHub are expecting the deal to close in the first quarter of 2020.