SAN FRANCISCO (CelebrityAccess) — When Viagogo completed its acquisition of StubHub from E-commerce service eBay in February, it gained the dubious distinction making what may be one of the most poorly timed financial transactions of the 21st century.
The deal, which closed in February, saw Viagogo founder Eric Baker regain control of StubHub, a company he helped to found for a reported $4.05 billion.
After announcing the deal in November, Baker said he had long aspired to combine the two companies and that the merger creates a “creates a win-win for fans.”
“Bringing StubHub and Viagogo together will allow us to drive further expansion and innovation, and create a more competitive offering for live event fans globally,” added Sukhinder Singh Cassidy, who was president of StubHub at the time. “This provides a great opportunity to expand our business, pursue new partnerships and execute our strategy. We expect a seamless transition for all our employees, partners and customers, and we are excited for what the future holds.”
However, the acquisition, which closed in February, was completed just weeks before the entire live events industry was shut down due to coronavirus.
As an assessment of the deal by Forbes’s Noah Kirsch notes, StubHub has since furloughed at least two thirds of its staff and had its credit rating downgraded from stable to negative by Moody’s.
“[It’s a] spectacular misfortune to have shelled out $4 billion four weeks before the entire industry locked down,” Eric Fuller, a ticketing market consultant told Forbes.
For Baker, the acquisition of StubHub must have seemed like coming full circle. He co-founded the pioneering ticket marketplace with fellow Stanford graduate student Jeff Fluhr in 2000 but left the company in 2004 over a disagreement with Fluhr and StubHub’s board over the direction of the company.
According to Forbes, Baker wanted StubHub to focus on developing partnerships with major sports leagues, while Fluhr wanted the company to remain an independent venture.
Following his exit, and seeing a potentially untapped market in Europe, Baker went on to found Viagogo in 2006. Since then, the company has expanded to become one of the leading secondary ticketing marketplaces in Europe, Asia, Australia and Latin America.
eBay, which acquired StubHub in 2007 for just $310 million, must be laughing all the way to the bank.