| Type | Subsidiary, Acquired January 2007 |
|---|---|
| Industry | Ticket exchange Ticket resale |
| Founded | 2000 |
| Founder(s) | Eric Baker and Jeff Fluhr |
| Headquarters | San Francisco, California, USA |
| Area served | United States / Canada |
| Products | Tickets for sports, concerts, theater, entertainment events |
| Parent | eBay |
| Website | www.stubhub.com |
StubHub (often styled StubHub!) is an online marketplace owned by eBay, which provides services for buyers and sellers of tickets for sports, concerts, theater and other live entertainment events.
The company was founded in 2000 by Eric Baker and Jeff Fluhr, both former Stanford Business School students and investment bankers, and is located in San Francisco.[1] The company's president is Chris Tsakalakis. Other executives include Srini Venkatesan, Noah Goldberg, Matthew Gustke, Scott Day, Danielle Maged and Ray Elias. Founder Eric Baker left StubHub in 2004 following a falling-out with the company, and has started a new company, viagogo.[2] In 2005, the company raised between $10 million and $25 million from Pequot Ventures (now FirstMark Capital).[3] StubHub was acquired by eBay in January 2007.[4]
Founder Eric Baker said, "I'm probably the one person from business school who decided to take his MBA and become a ticket scalper."[5] 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% commission 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.
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Using the StubHub website, a buyer may select from available tickets to an event. StubHub charges a buy fee of 10% of the purchase price of the tickets. (StubHub formerly charged a minimum service fee of $5, but stopped doing so in 2011.) A shipping and handling charge is then imposed and tickets are either shipped via FedEx Express, email delivered, available for instant download, or picked up the day of the event at a last-minute services office. In total, on a typical order, StubHub earns 20% of the purchase price of every ticket sold: buyers typically pay 10% more than the listed price and sellers receive 10-15% less than their listed price depending on certain seller metrics and bonuses. Criteria for reduced seller fees include confirm time, fill rate, and quarterly sales totals (large sellers must maintain $50,000 per quarter at a minimum.) Additional seller incentives include the ability to buy tickets without paying service fees.[6]
StubHub has formal relationships with several professional teams and college sports programs.
In 2011, StubHub allowed sellers to post tickets for sale without verifying ownership of the seats, opening the door for industry speculators to post phantom seating locations in hopes of filling the orders at a lower price when additional tickets surfaced on the secondary market. Due to overwhelming demand to see the Auburn Tigers and Oregon Ducks play in the National Championship, no such tickets ever entered the marketplace, leaving some StubHub customers without tickets. StubHub went to extreme lengths to attempt to fill the orders which were confirmed under the company's "FanProtect Guarantee" however, some fans were ultimately refunded and reimbursed for travel expenses.[8]
In 2006, more than 100 New York Yankees season-ticket holders suspected of reselling their regular-season seats on StubHub received letters denying them the right to buy playoff tickets and barring them from buying season tickets for the 2007 season.[9][10]
The New England Patriots sued StubHub to bar it from reselling the team's tickets. Fans reportedly showed up at games with phony or voided tickets bought over StubHub. While some were counterfeits, others were voided tickets sold by fans after they had their season-ticket privileges revoked.[11][12][13] 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."[13]
On July 6, 2007, a Suffolk Superior Court judge allowed StubHub to proceed with its lawsuit against the New England Patriots.[14] Stubhub is accusing the Patriots of attempted monopolization, conspiracy to restrain trade and unfair trade practices.
On October 19, 2007, a court upheld an order forcing StubHub to turn over a list of all New England Patriots season ticket holders since 2002 who had used the site. The Patriots stated that they may strip the season ticket holders of their seats.[15]
On January 26, 2009, the Massachusetts Superior Court rejected StubHub's argument that it was not liable for its sellers' behavior per 47 USC 230. NPS LLC v. StubHub, Inc., 2009 WL 995483 (Mass. Super. Ct. Jan. 26, 2009), [1].
In 38 states, reselling event tickets is legal as 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.[5] Stubhub, Ticketmaster, TicketNetwork, 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.[16][17] To put these complaints into perspective, customers report paying 300% of standard retail price for events through ticket resellers like StubHub, although it is also possible that customers may purchase tickets at less than standard retail price.[18]
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