StubHub has welcomed the news that its proposed merger with fellow resale giant Viagogo is back on track after the UK Competition and Markets Authority (CMA) confirmed strict parameters for its approval of the transaction.
The CMA said yesterday (Tuesday) that Viagogo must sell all of StubHub’s business outside North America to satisfy the regulator’s concerns surrounding the $4.05bn (£3bn/€3.4bn) merger, which was paused nearly a year ago due to regulatory scrutiny.
“StubHub is happy to have found common ground with the CMA that allows our North American business to move forward with the merger with Viagogo and our international business to move forward under new ownership,” a StubHub spokesperson said in a statement released to TheTicketingBusiness.com.
“We will continue to work with the CMA to implement the agreed upon remedy. Once completed, consumers will continue to benefit from the safe and secure marketplaces provided by both businesses.”
StubHub’s response echoed the words of Viagogo, which said yesterday that the CMA’s decision would allow all parties to “move forward with clarity and certainty”.
Although Viagogo actually suggested selling off StubHub’s non-North American business in November as a possible solution to the impasse, the CMA has insisted on imposing a number of other measures that were not part of the proposal.
The CMA will determine key conditions of the sale of the non-North American business, such as the right of the purchaser to use the StubHub brand for the next 10 years. In November, Viagogo proposed that the buyer would be allowed to use the StubHub UK brand for only three years. The watchdog will also approve the buyer before the sale proceeds.
The CMA’s announcement drew a cautious response from FanFair Alliance, the anti-touting campaign group that is backed by managers and teams for various top artists, including Ed Sheeran and Biffy Clyro.
“Tackling this hugely controversial $4bn merger was always going to be tough for regulators, and we welcome the CMA’s hard work during this investigation,” campaign manager Adam Webb said in a statement released to TheTicketingBusiness.com.
“Going forward, the most pertinent question will be the identity of potential buyers. Practically all of StubHub’s value is in the company’s North American operation.
“Aside from the acquisition costs, anyone wishing to operate a successful uncapped ticket resale business in the UK would require two things: significant relationships with large-scale ticket touts to supply inventory, and deep enough pockets to outspend Viagogo on Google search advertising.
“That might be good for Google, and it might be good for ticket touts. But we need a conclusion that’s good for UK consumers, and stops them being ripped off.”
The regulator outlined how the combined businesses would have a market share of more than 90% in the UK without intervention and also expressed doubt that any other distribution channels – capped-price ticket exchanges, classified advertising sites, social media and the primary ticketing market – would be able to compete effectively with the merged entity.
Sam Shemtob, director of the Face-value European Alliance for Ticketing (FEAT), added to TheTicketingBusiness.com: “We welcome the CMA’s decision, for which both it and the FanFair Alliance ought to be applauded. The requirement will help protect the live sector across Europe from a concentration of market power from the world’s largest uncapped secondary sites.
“When live events resume, reduced capacities and social distancing will likely lead to increased demand, making it more important than ever that fans can see their favourite bands at the prices intended. FEAT is working hard to make this possible, both with regulators and by developing best practice.”