StubHub
StubHub is an American ticket exchange and resale company. It provides services for buyers and sellers of tickets for sports, concerts, theater, and other live entertainment events. By 2015, it was the world's largest ticket marketplace.[1][2] While the company does not currently disclose its financials, in 2015 it had over 16 million unique visitors and nearly 10 million live events per month.[3]
Company type
StubHub was founded in 2000 by Eric Baker and Jeff Fluhr.[4] The company was acquired by eBay for $310 million in 2007, and again acquired in 2020 by Viagogo.[4][5][6]
History[edit]
2000–2007[edit]
StubHub was founded in March 2000 as a class project[7] by Eric Baker and Jeff Fluhr, both former Stanford Business School students and investment bankers.[8] One of its first major sports deals was with the Seattle Mariners in 2001.[9] In 2002, eBay was in talks to acquire StubHub for US$20 million, although the agreement had later "fallen apart over price."[10] While StubHub initially intended to "build a ticket transaction system that [Fluhr] could sell to other online portals and providers", in 2003, the company began placing Google ads for the actual StubHub website instead, directly facilitating ticket sales from sellers to buyers.[11] After having a falling out with Fluhr in 2005, Baker left the company, retaining 10% ownership.[12]
In 2005, the company raised between $10 million and $25 million from Pequot Ventures (now FirstMark Capital).[13] That year, the company generated $50 million in revenue, was cash flow positive.[14] and generated over $200 million in sales.[15]
In 2006, StubHub became involved in several disputes over the resale of season sports tickets in New England, involving the New England Patriots and New York Yankees.[16][17] In the U.S., 38 states had laws allowing the reselling of event tickets as long as the sale did not take place at the event site. The other 12 states had varying degrees of regulation, including registration requirements and maximum markups.[18] StubHub, Ticketmaster, TicketNetwork, and others began to lobby state legislatures to repeal or modify the stricter anti-scalping laws. In Florida, StubHub made over $6,500 in campaign donations to members of the state legislature in support of a 2006 bill to amend Florida's 61-year-old anti-scalping laws. Many consumers, as well as lobbyists for the leisure and entertainment industries were opposed to the bill, and claimed it would drive up prices for consumers while hurting their share of the ticket market.[19][20] The bill's sponsor argued its passage would modernize the state's ticketing industry. The bill passed in June 2006, resulting in 35 states having no restrictions on ticket resale.[21]
In 2006, Inc. ranked StubHub as the eighth fastest growing private company in America on its annual "Inc. 500" list.[22]
Legal issues[edit]
New England Patriots lawsuit[edit]
In 2006, more than 100 New York Yankees season-ticket holders suspected of reselling their regular-season seats on StubHub received letters denying them the right to buy playoff tickets and barring them from buying season tickets for the 2007 season. StubHub criticized the policy as "a witch hunt against us and eBay for giving fans more access to these games".[80] Also in 2006, the New England Patriots sued StubHub to bar it from reselling Patriots tickets in Massachusetts, arguing StubHub was illegally facilitating the sale of phony or voided season tickets.[81][82] On July 6, 2007, a Suffolk Superior Court judge allowed StubHub to proceed with its lawsuit against the New England Patriots.[83] StubHub accused the Patriots of attempted monopolization, conspiracy to restrain trade, and unfair trade practices. On October 19, 2007, a court upheld an order forcing StubHub to turn over a list of all New England Patriots season ticket holders since 2002 who had used the site. The Patriots stated that they may strip the season ticket holders of their seats.[84] Purchasing StubHub during the dispute, eBay later settled.[85]
New York Yankees lawsuit[edit]
In December 2012, it was reported that the New York Yankees, the Los Angeles Angels, and the Chicago Cubs had dropped StubHub and declined a new five-year deal, which MLB Advanced Media had signed.[9][86][87] The Chicago Cubs later opted back into the partnership. In 2012, The Yankees sued StubHub for its storefront near Yankee Stadium, arguing that it violated New York law prohibiting ticket resale within 1,500 feet of a venue. StubHub argued that the location was not a ticket sales office but a printing station for tickets purchased online. The lawsuit was settled in 2013.[88] eBay has announced that from May 2013 it will retire some of its ticket categories on its UK website and will redirect users to the StubHub website to purchase them.[89] They began the merging process in January 2013 when listings on StubHub also appeared in search results on the eBay UK's tickets category.[89] In April 2013, a new pricing structure was established, and the fee will be displayed upfront without going through an auction.[89] In May 2013, cancellation of the Spice Girls' musical Viva Forever! saw a 220% increase in online ticket searches on StubHub UK, as fans rushed to buy tickets for the remaining shows.[90]
Scalping[edit]
One of StubHub's top sellers (as of 2017) in the ticket reselling industry is a thirty-year-old man from Montreal, Canada, Julien Lavallée,[91][92] According to a November 9, 2017 article published in The Toronto Star, Lavallée was able to expand his business using "exploitative tactics" that "gam[e] the ticket marketplace and put entertainment beyond the reach of millions of fans who can’t compete with large-scale scalping operations."[91] The leaked documents included Lavallée's business records that showed that along with StubHub, he also used Vivid Seats and Ticketmaster as "'main channels' to scalp his tickets".[92] Prior to October 2017, Lavallée used his company, I Want Ticket Inc, which was "registered on the British Isle of Man, to post on StubHub in the U.K."[92]
A UK law was passed in 2017 that targeted sellers using software to purchase tickets. The Competition and Markets Authority (CMA) then sent out information requests to all four major UK platforms (Get Me In, Seatwave, Viagogo and StubHub) in August that year asking for information on sellers. When StubHub refused the request the CMA instead pursued a warrant,[92] raiding StubHub's London office in August 2017[91] and confiscating records related to touts selling mass quantities of tickets.[92] By November 2017, no charges had been laid against StubHub.[91] According to the Toronto Star and the CBC News, Lavallée drew the attention of U.K.’s National Trading Standards (NTS) and CMA when he succeeded in controlling 310 seats for three of Adele's shows in London in 2016 for a total transaction of over $50,000 in less than a half an hour.[91]
In late 2017, the Canadian press, using a "superscalper", Lavallée, exposed in the Paradise Papers as an example, reported that highly successful touts on StubHub were being openly incentivized for high sales volumes, arguing that StubHub was potentially incentivizing bot operators in the process.[92]
