The future prospects of the world’s two biggest ticket tout sales platforms - and the touts who trade there - have been rocked by coronavirus.
Industry expert Adam Webb has branded the $4 billion buyout of StubHub by rival Viagogo - Stubagogo - as “one of the worst timed acquisitions in history”.
Industry investigator Reg Walker also said the deal now looks like a disaster, saying: “It looks like Viagogo boss Eric Baker and his financial backers have bought the last ticket for the Titanic for $4 billion”.
Webb, campaign manager of the FanFair Alliance, told magazine IQ that financial evaluator Moody’s has downgraded Viagogo’s prospects from “stable” to “negative”.
He believes that the jailing of two UK super touts earlier this year has made it clear that most touting of tickets is out and out fraud - further reducing Viagogo’s outlook. Webb believes some touts may now be forced to cut their losses and get proper jobs.
Webb said: “It sounds like rough times ahead. But if the future looks bleak for StubHub, it’s arguably bleaker for Viagogo.
“Even before Covid-19, the acquisition of StubHub looked wildly overpriced.
“Viagogo, meanwhile, is a relative minnow in the US. Its ownership of StubHub doesn’t really bring much to the party, aside from a highly toxic reputation.
“In the UK, the recent sentencing of Peter Hunter and David Smith, who sold substantial volumes of tickets through Viagogo, has imperilled the business model of large-scale resellers on whom the secondary platforms rely. With more trials to come, Viagogo’s supply chain looks to be under threat.”
The perfect storm against Viagogo also involves investigations by regulators in the USA and UK.
Webb said: “Viagogo has already put staff at its customer service centre on 30 days’ “protective notice”. Their purchase of Google advertising appears to have stopped dead.
“But above that is the fact that Eric Baker and his investors appear to have paid out $4.05bn for a crippled business that lies, according to some reports, on the verge of bankruptcy.
“In the context of the unprecedented crisis being played out in all our lives, this could well be one the most poorly timed acquisitions in recent corporate history.”
Webb claimed touts have a rocky road ahead, saying: “Live music is essential for the livelihoods of most artists and musicians, as well as the hundreds of thousands of people employed directly or indirectly through gigs and festivals. All will need help and support to navigate their way through this crisis.
“But the standstill is also having a huge impact on hardcore ticket touts.
“Many of these speculators will have acquired substantial volumes of tickets to events now being rescheduled to 2021 or cancelled outright. More than that, they’re completely dependent on cash-strapped websites like Viagogo and StubHub to keep them in business. It’s a real double whammy.
“I suspect many of them will end up cutting their losses and exploring different ways to make a living.”
Reg Walker, of the Iridium Consultancy, said he expects the Competition and Markets Authority in the UK to move towards a full investigation of the “Stubagogo” merger.
Viagogo was asked to comment on the buyout but they failed to get back to us.
