Web-Based Scalping Business Gets Shot At Legitimacy

Jan 11th, 2007 // 3 Comments

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.

The four secondary-market brokers are hawking these per-ticket prices:
RazorGator: $84-$219
StubHub: $87.50-$589
TicketLiquidator: $95-$328
CoastToCoastTickets: $104-$354

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]

  1. Butch Huskey

    stubhub is great at buying cheap sports seasons tickets, most people dont go to every game and will rather dump them for 75% than eat them, i’ve bought $15 tickets for $8 each, but they charge around $20 for shipping while ebay gets about $6 in fees for a successful auction … and never underestimate the marketplace of naive buyers, most shows on ebay being advertised as “soldout” still have good tickets available via the box office or ticketmaster

  2. Chris Molanphy

    I’m still depressed, more than a decade later, that Pearl Jam wimped out on their TicketMaster fight. I really think they were right.

    TM’s continued existence ranks right up there with baseball’s antitrust exemption in the category of “things I can’t believe our government allows to continue.”

  3. TheSkinny

    Ticketmaster is evil, yes. But concert promotions satan Clear Channel/Live Nation bears much more of the responsibility when it comes to the rising cost of concert tickets–and a big chunk of those ticketing fees get kicked back to promoters, artists and venues. Bottom line: as long as we pay it, they’ll keep charging it.

    I go to the box office when I can–you can escape the bulk of the ticketing fees that way. Mostly, I stay home. Because there are bad people outside. And dirt and stuff.

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