eBay near deal to buy StubHub

Report: eBay near deal to buy StubHub
Silicon Valley/San Jose Business Journal - 1:26 PM PST Wednesday

Online ticket-reseller Stubhub Inc. may be about to be snapped up by eBay Inc. for more than $300 million, the Wall Street Journal reported Wednesday, citing sources familiar with the matter.

San Francisco-based StubHub is the largest tickets-only reseller of tickets to sports, concerts and other events. The San Francisco Business Times, a publication affiliated with the Business Journal, ranked StubHub second in its annual list of the Bay Area's fastest-growing private companies.

The Journal quoted an unnamed source who said StubHub's earnings before interest, taxes, depreciation and amortization are roughly about $10 million, giving the deal a valuation of greater than 30 times cash flow.

The paper said a deal for StubHub could be announced by San Jose-based eBay (NASDAQ: EBAY) as early as Thursday.

StubHub's earnings before interest, taxes, depreciation and amortization are roughly about $10 million, giving the deal a valuation of greater than 30 times cash flow.

wow, sounds like eBay is going to pay a huge premium… stubhub is the master of scalping - it even scalped itself!

WOW this is huge.

stubhub is the master of scalping - it even scalped itself!

good one! haha.

StubHub takes a 15% commission fee from the seller. The buyer pays StubHub 10% of the ticket price. So, for a $100 ticket, Stubhub takes $25. That's a pretty impressive business model, especially considering eBay's profit model for ticket exchanges would be - what???? I've never sold tickets on eBay, but I didn't have to pay them but $5 for other items I've sold, and the buyer paid nothing.

If that's your biggest competition and it has a profit model (without your advertising prowess), why not?

question is - what will eBay do next? margins are indeed higher on stubhub so next time someone tries listing tickets on ebay, will they be automatically re-directed to do so on stubhub?

ebay and stubhub are probably the two most common place to go looking for tickets. in the long run, less choice might not be a bad thing, maybe such professional scalping services will price themselves out of the market. i smell an opportunity for an upstart to cut them off…

with ebay you have to pay a fee (much smaller than SH) plus whatever paypal fees incur for the final price of your tickets. all 3 fees together add up to less than 15%, depending on price.