Yesterday, Forbes magazine published an article describing the epic misfortune of Eric Baker and Viagogo purchasing StubHub just in time to see the entire live events industry decimated by Covid-19.
This morning, Billboard published an article confirming StubHub’s president Sukhinder Singh Cassidy and 200 others are going or gone. When the top executives leave, it’s the closest thing you’ll get to the ringing of a bell.
Both stories talk about my predication of why StubHub will likely file for bankruptcy. Neither explains my logic, so I will.
Live events basically shut down on March 15, 2020. With the possible exception of NFL for whom a different set of rules apply, likely no mass events will occur with a full audience before 2021. My guess is we’re going to be into the spring of 2021 before we start to see full rooms again, if then.
All tickets sold for events from March 15, 2020 until live events resume are either being rescheduled or canceled.
Here’s how the math works. For rescheduled events which people intend to attend, nothing happens. The tickets will be good in the future. For events which are canceled or people no longer wish to go, they get their money back. And, therein lies the issue for StubHub and other secondary markets. In order to refund the ticket, they’d have to have the money. They don’t.
I’ve explained this in other articles such as:
It’s really simple. Until March, 2020, whenever a ticket sold on StubHub, and was delivered to the buyer, StubHub paid the seller who owned the ticket. If the sale was for $100, likely StubHub paid out $75 and kept the remaining $25 as its fee. From that $25 StubHub paid the credit card…