eBay near deal to buy StubHub

[vansmack]

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.

[sweetcell]

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!

[chokeychicken]

WOW this is huge.

[sonickteam2]

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

good one! haha.

[vansmack]

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?

[sweetcell]

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...

[chokeychicken]

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.