The $4bn (£2.9bn) merger of controversial ticket resale websites Viagogo and StubHub can go ahead after the UK competition regulator approved a plan that will see StubHub’s international operations sold to a new entrant to the market, US investment group Digital Fuel Capital.
The Competition and Markets Authority (CMA) had ordered Viagogo to sell StubHub’s operations outside North America, after concluding that the combined entity would have handled about 90% of resold tickets for gigs, sports events and theatre in the UK.
Viagogo said Digital Fuel Capital, based in Newton, Massachusetts, had agreed to buy StubHub International for an undisclosed fee.
Digital Fuel Capital has largely invested in US businesses such as Rugs USA and artificial Christmas foliage firm National Tree Company, and describes its strategy as investing “at the intersection of analytics, art and technology”.
The business practices of Viagogo and StubHub have repeatedly come under scrutiny from the CMA and music industry groups, who have highlighted concerns about consumers being misled and their relationships with powerful touts accused of exploiting genuine fans.
The sale breathes new life into a merger that Forbes had called the “worst deal in history”, partly due to the CMA’s intervention, but largely because it was agreed just as the pandemic shut down live events globally.
It also completes a reunion of two businesses started by US entrepreneur Eric Baker, who co-founded StubHub before falling out with startup partner Jeff Fluhr.
Baker later moved to London to set up Viagogo as a European competitor to StubHub, which was sold to eBay in 2007 for $310m.
Cris Miller, the vice president of business development at Viagogo, said: “We appreciate the CMA’s role in bringing the merger to this conclusion, and we look forward to sharing more details about the integration of the two businesses with our loyal customers and partners very soon.
“As the live events industry emerges from the coronavirus pandemic, robust competition in the ticketing market is needed more than ever and Viagogo will continue to take its essential role in the live events industry very seriously. Viagogo and StubHub will always remain committed to working with regulators, while providing safe and secure platforms for people to buy and sell tickets to events all over the world.”
Digital Fuel Capital’s president, Carson Biederman, said: “We are thrilled to become the new owners of StubHub International. After a long time and process, the teams in London, Madrid, Bilbao and Berlin will now form a new independent company.
“Together, we look forward to growing StubHub International as an agile and competitive ticket marketplace focused on helping fans access live experiences and transfer tickets securely.”