Stubhub

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StubHub is a service which acts as an online marketplace for buyers and sellers of tickets for sports, concerts, theater and other live entertainment events at fair market value, even for events that happen to be sold out. The company was founded in 2000 by Eric Baker and Jeff Fluhr, former Stanford Business School students and investment bankers and is located in San Francisco, CA.^[1] Founder Eric Baker left StubHub in 2004 following a falling out with the company, and has started a new company viagogo.^[2] StubHub was acquired by eBay in January 2007.^[3]

Founder Eric Baker said, "I'm probably the one person from Stanford's business school who decided to take his MBA and become a ticket scalper."^[4] Sellers post available tickets at any price they choose. Unlike other online ticket resellers, such as Craigslist (free) and eBay (up front price per listing), Stubhub takes a 25% commisson after the sale occurs (10% from the buyer, 15% from the seller). Sellers range from season ticket holders who want to unload tickets that would otherwise go unused to professional ticket brokers looking to make a profit.

1 Operations
2 Sports Partnerships
3 Controversies
4 References
5 External links

[edit] Operations

Using the StubHub website, a buyer may select from available tickets to an event. Stubhub charges a service fee of 10% of the purchase price of the tickets. A shipping and handling charge is then imposed and tickets are either shipped via FedEx Express or picked up the day of the event.

Suppose there’s a ticket on sale for $100. The buyer will pay $110 to purchase the ticket, factoring in a 10 percent commission to Stubhub, and a shipping and handling fee either for overnight delivery or pickup at a Stubhub office. The seller receives $85, thanks to a 15 percent commission on the other end.^[5]^[6]

[edit] Sports Partnerships

StubHub has formal relationships with several professional teams and college sports programs.

NFL: Chicago Bears, Indianapolis Colts, Cincinnati Bengals, Houston Texans, Detroit Lions, San Diego Chargers, Atlanta Falcons, Washington Redskins.
NBA: Washington Wizards, Charlotte Bobcats, Portland Trail Blazers, New Jersey Nets.
NHL: Washington Capitals, Phoenix Coyotes.
NCAA: USC, Cal, Alabama, Georgetown, Stanford, Oregon State, Air Force, Rutgers, West Virginia, Kansas State, Mississippi State, Texas A&M, Southern Miss, San Jose State, Purdue.

[edit] Controversies

[edit] New York Yankees Season Ticket holders lose seats

"More than 100 season-tickets holders suspected of reselling their regular-season seats on stubhub have gotten letters denying them the right to buy playoff tickets and barring them from buying season tickets for next year.^[7] ^[8]

[edit] New England Patriots sue StubHub

"The New England Patriots yesterday lowered the legal boom on a popular Internet site the team contends has become a major source of counterfeit and voided tickets. The Pats yesterday filed suit in Suffolk Superior Court against StubHub in a move to bar the Internet site from reselling the team’s highly coveted tickets.The Pats fired their legal salvo after dozens of fans showed up at games with phony or voided tickets bought over StubHub, which operates an online market for ticket buyers and sellers. While some were counterfeits, others were voided tickets sold by fans after they had their season-ticket privileges revoked."^[9]^[10] ^[11]

That problem, the Patriots argue, is worsened by a guarantee from StubHub that if tickets turn out to be fraudulent, the website will find alternate accommodations for the buyer.

"Our experience is that as the listings on StubHub have increased, so also have the number of people who show up at the stadium with invalid tickets." ^[12]

[edit] StubHub Countersues the Patriots

In late-December 2006 StubHub filed a counterclaim in Suffolk Superior Court accusing the Patriots of attempted monopolization, conspiracy to restrain trade and unfair trade practices.

[edit] Illegal Scalping

In 38 states, reselling event tickets is legal, so long as the sale does not take place at the event site. The other 12 states have varying degrees of regulation, including registration requirements and maximum markups.^[4] Stubhub, Ticketmaster, eBay, and others have begun to lobby state legislatures to repeal or modify the stricter anti-scalping laws. In Florida, Stubhub made over $6,500 in campaign donations to members of the state legislature in support of a 2006 bill to amend Florida's 61-year old anti-scalping laws. Many consumers, as well as lobbyists for the leisure and entertainment industries were opposed to the bill, and claimed it will drive up prices for consumers while hurting their share of the ticket market.^[13]^[14]