Pandemic Made StubHub Buy the 'Worst Deal in History'Newser — Rob Quinn
People who balked at paying inflated ticket prices for concerts and sporting events before the pandemic might find some schadenfreude in Eric Baker's tale of woe. Noah Kirsch at Forbes takes a look at how Baker's triumphant acquisition of StubHub turned sour with dizzying speed.
Baker co-founded the ticket reseller with fellow Stanford Graduate School of Business student Jeff Fluhr in 2000, but after disagreements, he was forced out as president in 2004 because "Jeff owned a little more stock than I did," he says.
Despite remaining StubHub's second-largest shareholder, he founded rival reseller Viagogo overseas. Late last year, the thriving firm reached a deal to buy StubHub from eBay, which had acquired it in 2007, for $4.5 billion.
The deal closed on Feb. 23—just in time for the coronavirus to completely wreck the business.
With events canceled everywhere, customers demanded refunds—but since StubHub pays ticket sellers as soon as sales are made, it didn't have the money.
It offered vouchers instead, but is now facing lawsuits. Stubhub and Viagogo haven't gone broke yet, but since their business model relies not just on events taking place, but on there being excess demand for tickets, analysts aren't sure whether they can survive long enough to see business rebound.
"Baker’s purchase of StubHub will go down as one of the worst deals in history," Kirsch writes, "closed just days before the pandemic eviscerated the live-events business that, with regard to ticket reselling, he had so gleefully cornered." Click for the full piece.
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This article originally appeared on Newser: Pandemic Made StubHub Buy the 'Worst Deal in History'