StubHub Lays Off More Than 100 California-Based Employees
StubHub has laid off more than 100 employees, according to multiple sources. The employees are based in California, where the eBay-owned secondary ticketmarketplace has its headquarters. BizJournals.com, which first reported the layoffs on Tuesday, indicated the number of impacted employees at 102, primarily in San Jose.
A report by Sports Illustrated included speculation that the cuts were done at the behest of Viagogo, which committed to purchase the marketplace from eBay in December for $4 billion. That deal is expected to close by the end of the first quarter of this year, reuniting the ticketing marketplace with co-founder and current Viagogo CEO Eric Baker.
“Eric Baker and co. have likely realized they’re paying +/- $1 billion too much (they paid 25x EBITDA) and now need to slash salaries to make the debits and credits more palatable,” Sports Illustrated reported a source as saying.
The deal for the marketplace has drawn fire from longtime critics of Viagogo overseas, including a large cross-section of anti-resale activists who have long dogged Viagogo for what they deem to be anti-consumer practices in place by the Swiss-based company.
The Competition and Markets Authority in the UK is currently reviewing the sale, after a period of public comment from December 13 to earlier this month. On this side of the Atlantic, the Federal Trade Commission is also expected to be looking over the transaction, though per agency policy, it does not comment on ongoing inquiries, or even confirm whether or not an inquiry is underway. StubHub was also the target of a recent lawsuit by TicketManager, alleging massive underpayment of affiliate commissions and interference with its relationship with American Express.
“While the deal is expected to close, it may not happen as “swiftly” as one might expect an all-cash pact to,” says Sports Illustrated. “We’ve heard that Viagogo has been shopping minority stakes. The Walton family is among those who have been approached.”
When contacted for an update on the transaction this month, a StubHub spokesperson told TicketNews that the deal was subject to standard closing conditions, and still expected to be complete by the end of this quarter.