StubHub, the seven-year-old Web site that specializes in the “secondary ticketing” market (hey, it sounds nicer than “scalping”), has been snapped up by eBay for $310 million. The site hooks up buyers and sellers of sporting event and concert tickets, and it has some leanings toward legitimacy, having inked deals with a few sports leagues to sell unused season tickets. Red Herring values the classed-up scalping business at $10 billion, with four unfortunately named sites (StubHub, CoastToCoastTickets, RazorGator, and TicketLiquidator) leading the way in the business.
We decided to give those sites a whirl, so we shopped around for tickets to Justin Timberlake’s Jan. 27 concert at the XCel Center in St. Paul, Minn. The tickets–which are still available–are normally priced between $54 and $82.50, with a “VIP Lounge” package going for $151.
Obviously, a few less-than-legitimate sellers are sprinkled among those sites’ sellers, because we’re pretty sure that Ticketmaster’s fees aren’t high enough to warrant a 300% markup–100%, maybe. And for a non-sold-out show, these prices seem a little high to us, especially when you take into account the fact that all the seats on the floor are general-admission tickets.
Buying StubHub makes sense for eBay, which is in the ticket business itself; it’s not hard to foresee the auction site incorporating some of its technology down the road. But looking at the asking prices above, and the supply of legitimately available tickets, makes us think that $10 billion is a hefty price tag for a market that’s completely based on supply and demand. In a soft concert market, who, aside from the most diehard Ticketmaster hater (we’re looking at you, Eddie Vedder) would go out of their way to overpay for tickets?
eBay Scoops up StubHub: $310M [Red Herring]