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Insights: eBay flat, StubHub selloff inevitable

Last week eBay released an ‘uninspiring’ set of figures – with growing pressure to offload StubHub and focus on ‘core’ business.

On Wednesday (23.10.19) eBay reported its Q3 2019 results, which revealed another uninspiring quarter of drift, with the marketplace apparently impacted by the growing number of US states imposing ‘Internet Sales Taxes’, but completed another $1.1Bn of share repurchase whilst paying out $115M in dividends.

This is a period of transition for eBay with interim CEO Scott Schenkel, confirming the portfolio review continues with a potential disposal of StubHub imminent (with – as we reported on Friday – an update to be announced before the next earnings release in January 2020), and the eBay Classifieds division review ongoing.

Big and flat

With regards to the quarterly performance of StubHub reported revenues were $306M up 5% Y-O-Y, but with GMV (Gross Merchandise Volume) of $1.23Bn flat in what is an expanding sector.


Flat implies StubHub is experiencing erosion of secondary ticketing marketshare to competitors, whether from primary platforms whom are increasingly offering dynamic pricing tools for tickets, the impact of digital ticketing enabling restrictions over ticket transferability, emerging companies with white-labelled ‘ethical’ ticket exchange or resale functionalities, or other PE-empowered secondary marketplaces.

Nevertheless given that eBay originally acquired StubHub for $310M in 2007 and – despite the current stand-still nature of the business – the scale is impressive with $4.7Bn annual GMV and $1.1Bn in revenues.

Pressure on sale

However, eBay has been under pressure for a number of months from various activist investors including ‘Elliot Management’ & ‘Starboard Value’ to sell off the ticket resale marketplace in order to maximise shareholder value.

Industry commentators have also opined that StubHub could operate more effectively within an ownership structure more aggressively targeting growth.

One observer, Gary Alexander, went so far as to describes latest set of figures as “eBay core business continues to rot” with consumer preference for Amazon-style shopping (as opposed to auction sites) and the growing impact of digital sales taxes impacting growth prospects. More on Alexander’s take on eBay’s “over-valuation” situation here.

StubHub itself claimed the ticketing sector was ‘soft’ due to fewer top tier artists active during the US summer season, but that this was offset by a ‘solid start’ to the NFL season and strong double-digit performance in its international markets.  But as Scott Schenkel noted in the Earnings Call: ‘95% of the business, or more, is in the U.S.’.

On a brighter note, Schenkel applauded the efforts of Sukhinder Singh Cassidy (President StubHub) and her team to integrate digital ticketing where StubHub have direct relationships with (typically Sports) Rights Owners and to the overall seamless platform UI. He said: ‘It’s got an amazing seller base (with) tickets to almost every venue and every league for every game and every show in a way…. it’s got a good share. And it’s got a really nice user experience that we continue to evolve.’

But, ultimately StubHub will be sold-off – with potentially big ramifications for the global ticketing sector.

Other articles in our Finance Insights series:


*ABOUT THIS ANALYSIS: This series of financial insights is provided by the The FP&A Team at TheTicketingBusiness. The FP&A Team comprises a group of industry finance experts who volunteer their expertise to provide ad hoc analysis of key industry financial, M&A, funding and investment news. All in an effort to better-inform the market and support the industry’s long term development. Any questions or feedback welcome to analysis@theticketingbusiness.com


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