EBay buying StubHub for $310M in cash
(AP)Updated: 2007-01-11 11:21
Other big winners in the sale include former San Francisco 49ers quarterback Steve Young, one of StubHub's earliest investors. StubHub's other financial backers include Frank Biondi, former CEO of Viacom Inc., and Harvey Golub, former CEO of American Express Corp.
Fluhr and Baker founded StubHub after developing the concept under the name "NeedATicket.com" as part of a competition while attending the Stanford Graduate School of Business. Although picked as finalists, they pulled out of the contest because they feared someone would steal their idea.
Baker, 33, left StubHub in 2004 but retains a significant stake in the company and now runs a similar European ticket reseller called Viagogo.com.
Under Fluhr's leadership, StubHub has tried to position itself as a save haven in the roughly $10 billion market for reselling tickets that have already been purchased elsewhere. Unlike the stereotypical ticket scalper standing outside a stadium, StubHub guarantees buyers all tickets sold on its site are authentic.
The approach has won over about 30 professional and college sports teams that guide fans to StubHub for tickets. The list of teams working with StubHub includes the Chicago Bears, San Diego Chargers and Washington Redskins of the National Football League and the Portland Trailblazers and New Jersey Nets in the National Basketball League.
But other teams have lashed out at StubHub, with the NFL's New England Patriots and the New York Yankees in Major League Baseball emerging as the most strident critics.
The Patriots sued StubHub in November, alleging the site is encouraging fans to break a Massachusetts law against selling tickets more than $2 above face value. StubHub countersued last month, depicting the football team as a monopolist engaged in unfair trade practices.
The Yankees have gone so far as to revoke the season tickets of fans who sold their seats on StubHub, arguing the activities violate the team's licensing rights. StubHub believes the Yankees are trying to stifle competition for an online market that the baseball team hopes to operate on its own.
In an interview last month, Fluhr said fewer teams are trying to deter StubHub because they realize that the company is helping them fill seats that might otherwise go unfilled if the original ticket holder can't attend the event. Although a team doesn't profit directly from scalped tickets, it can still make money by selling food, drinks and souvenirs to the secondary buyer of the ticket.
"As teams have learned about our business and the early adopters have had real success with us, we have had more and more teams sign on," Fluhr said. "I feel we have a real tail wind with us."
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