Viagogo May Be Forced To Let Go Of StubHub
wiss-based ticketing company, Viagogo, may be forced to partially or fully sell its American ticket resale marketplace, StubHub, over fears a merger would cause higher fees and reduced competition.
The European ticketing outlet first bought StubHub from eBay almost one year ago for US$4.05 billion, Viagogo and StubHub have since operated separately.
The UK Competition and Markets Authority (CMA) has recently found that the combination of the two would create an overly dominant entity in ticket re-sales.
CMA inquiry group chair, Stuart McIntosh, said: “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% combined and compete closely with each other.”
“We are therefore concerned that their merger could lead to secondary ticketing customers facing higher fees and lower quality services,” McIntosh said.
The CMA has emphasised divestiture as possible solutions to Viagogo and StubHub’s concerns and is now inviting the public to comment on their preliminary findings.
A final ruling is expected to take place by December 2020.
CMA regulators said: “the CMA is mindful of the significant impact that the Coronavirus is currently having on the live events industry.”
“However, the evidence is that Viagogo and StubHub would remain important competitors for the foreseeable future without the merger,” CMA said in a statement.
Viagogo, however, disagrees with these findings, stating: “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.”
Regulators have the option of appointing a trustee to oversee the sale, should StubHub be sold.
The trustee, however, would be under no obligation to achieve any specific valuation for assets, which could lead to losses for the company.
Viagogo chief executive, Eric Baker, was previously the co-founder of StubHub, and left StubHub for Viagogo before StubHub received criticism after altering their refund policy for events which were cancelled because of COVID-19, to a store-credit model.