Twenty years ago, when Eric Baker tried to buy a secondhand ticket to “The Lion King” on Broadway, the high prices and hassle of the experience gave him a business idea: What if there were an easier way to buy and sell tickets online?
That idea became StubHub, a secure secondary marketplace for tickets founded by Mr. Baker and a partner, Jeff Fluhr, in 2000, when they were students at Stanford’s business school. After a rift between the founders, Mr. Baker left StubHub and in 2006 created a rival, Viagogo, which has become a strong presence in Europe. In 2007, eBay bought StubHub for $310 million, and Mr. Fluhr left the company.
Now Mr. Baker is bringing the two together. On Monday the companies announced that Viagogo, the smaller of the two, would acquire StubHub for $4.05 billion in a deal that would create a behemoth in the growing market for ticket resales.
“We bring international coverage, and StubHub has got phenomenal coverage in the U.S.,” Mr. Baker said in an interview. “When you put the two together, you’re giving fans access to almost any ticket anywhere, in any language and in any currency.”
StubHub sold $4.75 billion in tickets last year, taking in $1.1 billion in fees, according to eBay’s annual report. Viagogo, based in Geneva, Switzerland, has not disclosed details of its finances.
In recent years StubHub has had scant growth, facing new competition from smaller rivals like Viagogo and SeatGeek. Ticketmaster, which dominates the ticket business over all, has also moved forcefully into the secondary market.
Investors have pressured eBay this year to shed assets, including StubHub; in September, eBay’s chief executive, Devin Wenig, resigned, citing differences with the board.
The union of StubHub and Viagogo would create an international force in the market, which by some estimates could reach $15 billion next year. Viagogo, which operates in 70 countries, is particularly popular in Continental Europe and Britain; StubHub, which sells tickets in 44 countries, is strongest in the United States.
StubHub and Viagogo said little about their plans for the combined businesses. But in an interview, Sukhinder Singh Cassidy, the president of StubHub, said that the StubHub brand would continue.
In a statement, Viagogo and StubHub said they expected the transaction to close in the first quarter of 2020. But the deal may face regulatory scrutiny.
Lawmakers and regulators on both sides of the Atlantic have shown increasing concern about online ticket sales and their fairness to consumers. Prices have continued to climb as the once-clear lines between primary ticket sales — those made directly by a team or a venue’s box office — and secondhand sales through StubHub, Viagogo or even Ticketmaster have become blurred.
Last week, the House Energy and Commerce Committee announced an investigation into ticket sales, asking Live Nation Entertainment, StubHub and other companies for details about how seats to live events are advertised and sold.
And in September, Makan Delrahim, the assistant attorney general for antitrust, told a Senate committee that the Justice Department was investigating Live Nation over “allegations of violations” of a consent decree signed by the company when it merged with Ticketmaster nine years ago.
Viagogo has come under scrutiny in Britain. It once drew condemnation for being a no-show to a parliamentary committee hearing, and recently the company has been criticized by the Competition and Markets Authority for failing to meet consumer protection requirements in how it discloses information about ticket sales.
In July, Viagogo faced further trouble when Google announced that it was suspending the company’s advertising account.
In September, the competition authority said that Viagogo had satisfied its outstanding concerns about how the company presents information about tickets, and so “suspended preparations for future court action.” But the authority warned that it would “maintain pressure” on the company to comply with consumer protection laws.
Some people in the music business are also looking on the deal with suspicion. Adam Webb of FanFair Alliance, a campaign targeting ticket resellers that is supported by the managers of top acts like Adele and Ed Sheeran, called StubHub’s purchase of Viagogo “a desperate move by both parties,” adding that his organization would continue to tell music fans to avoid those sites.
“News of this acquisition should be a major concern for both audiences and music businesses,” Mr. Webb said, “especially if Viagogo, a company that recently had a court order hanging over its head and is still the subject of a C.M.A. investigation, uses this process as an attempt to detoxify its brand.”
Viagogo said that it had made more than 1,000 updates to its service to comply with the competition authority’s concerns, and that Google had restored its advertising account. Ms. Sukhinder Cassidy said those changes were important to the completion of the deal.
“Historically there have been challenges,” she said. “Viagogo has worked pretty hard over the last several months to really put those behind them, and that obviously gave us greater confidence in this partnership.”
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