PURE SPECULATION: WHY IS VIAGOGO LISTING THOUSANDS OF NON-EXISTENT TICKETS, AND WHY AREN’T…
By: Adam Webb
Tags: Competition Law, Ticket Touting, Fraud, Live Music, Viagogo

A few days later, and, taking things full circle, the Ryan & Jacob Corporation has now apparently relocated to Alcala 150, Madrid, 28008 — pretty much the same address as GES SL.

And then back to Madrid again, with a very familiar address

At the time of writing, the Ryan & Jacob Corporation is by some distance viagogo’s biggest supplier of extortionately-priced music tickets, not only in the UK, but also in Ireland, France, Germany, Spain, Italy, Luxembourg, Sweden, Switzerland, New Zealand, Australia and many other territories.

Pioneering a commercially questionable model that combines the 1985 comedy classic Brewster’s Millions and a Stella Artois marketing pitch, Ryan & Jacob’s strategy appears to involve posting tens of thousands of reassuringly expensive tickets at events like Cherym & Cheerbleederz at Birmingham’s Sunflower Lounge, or Goan Dogs at Manchester’s Castle Hotel, or Julia Bardo at Clwb Ilfor Bach, or Lonelady at Stereo in Glasgow or Joe & The Shitboys at The Horn in St Albans.

Viagogo’s event page for Joe & The Shitboys at The Horn, St Albans. A fairly unusual target for ticket touts. The Ryan & Jacob Corporation are reponsible for all these listings and tens of thousands of others around the world.

In other words, they are almost exclusively targeting grassroots shows that haven’t sold out and where ticket touting is unlikely to be a problem.

At one Barcelona event, Ryan & Jacob are listing 6 x €21 tickets for £32,528 each.

I repeat: £32,528 each.

That’s £195,168 for 6 tickets.

Ryan & Jacob’s madcap approach. £195,168 for 6 tickets. It’s Brewster’s Millions meets Stella Artois.

This skullduggery raises plenty of questions.

Like, why did viagogo allow their biggest global supplier to change identity four times in the space of a week? And why is the Ryan & Jacob Corporation listing thousands upon thousands of what appear to be non-existent tickets for prices that no one will pay?

And anyway, who are Ryan & Jacob ? And who is Sofia Wagner? And where are H.E Events?

Viagogo! Who are these ticket touts? Sarge? Rosemary The Telephone Operator? Henry The Mild Mannered Janitor?

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Here’s a theory.

In February 2020, viagogo completed the surprise acquisition of rival site StubHub, paying $4.05bn to eBay in the process. It was an extraordinary amount of money, and with the goal of reuniting viagogo founder, Eric Baker, with the business he co-founded 21 years ago — giving him unfettered access into the lucrative and highly competitive North American market.

Viagogo’s bullish announcement of November 25th 2019. A “win win” for fans, apparently.

In the US, StubHub is an absolute juggernaut. By comparison, viagogo’s North American business is practically non-existent.

When announcing the merger in November 2019, viagogo stated the acquisition of StubHub was paid for “in cash”. However, we believe the bulk of funding actually came from a complex of loans, and two VC funds: Bessemer Venture Partners and Madrone Capital Partners. Given what we now know about viagogo’s business model (hello smoke. hello mirrors) you’d have to question how much due diligence these shiny happy people actually undertook.

The smartest guys in the room? Team Bessemer celebrate their multi-million dollar punt on a secondary ticketing platform riddled with non-existent inventory

Aside from the terrible timing, notably it was described as the “worst deal ever” by Forbes, the merger also attracted attention from British regulators who foresaw, correctly, that it would bestow viagogo a monopoly position in the UK.

To allay these competition concerns, viagogo was instructed by the CMA in February 2021 to divest itself of the StubHub business outside of North America (aka StubHub International) in order for the merger to complete. Until then, viagogo and StubHub were compelled to operate as separate businesses.

This proposed divestment was also hardwired with a crucial caveat: whoever bought StubHub International would have to run it as an “uncapped” resale site and in direct competition with viagogo.

In theory, this scenario should suit Eric Baker famously. The value of this merger is in North America. If the less profitable parts of StubHub can be jettisoned, then so much the better — especially if viagogo’s dominance isretained in the UK and other territories.

Potentially that’s a real win-win.

However, there’s a catch here. StubHub International is a complete mess, and you’d have to be an idiot to buy it.

[STOP PRESS: on Wednesday 8th September, it was announced that Digital Fuel Capital, a US investment fund led by an ex-colleague of Eric Baker, and with interests in coffee, rugs and sportswear, would be buying StubHub International. The idiots had landed.]

When eBay operated the business, StubHub enjoyed a global partnership with AEG. This handed the UK platform “official” resale status at prestigious venues like The O2 and Wembley Arena. StubHub also enjoyed partnerships with football clubs including Everton and Spurs. However, such valuable UK-based partnerships have all but dissipated. The site has been continuously mired in controversies. Most of StubHub UK’s suppliers (ie high volume ticket touts) have deserted the platform too.

Reviving such a diminished brand will require significant investment from its new owners.

Compounding this is the fact that, in the UK at least, the business of ticket touting is getting much tougher. Regulations on ticket resale are finally being enforced, touts have been imprisoned for unlawfully acquiring tickets, more artists are successfully adopting anti-touting strategies, and there’s a market shift underway to mobile-only tickets.

Then, on August 16th, the CMA published a new report recommending even tighter controls on ticket resale, including a strict limit on how many tickets an individual can resell. If these recommendations are enacted, sites like viagogo and StubHub will effectively be starved of tickets.

It would be an extinction event for their respective UK businesses.

I strongly suspect that this context explains viagogo’s dogged support of phantom sellers like the Ryan & Jacob Corporation.

Out of desperation to divest StubHub International, viagogo’s listings have been artificially boosted — creating an illusion that the site is laden with tickets, and that the “uncapped” secondary market continues to boom.

Without “tickets” from the likes of Ryan & Jacob, Sofia, H.E Events, GES SL and all their other phantom sellers, viagogo’s tree would look shorn of leaves.

As long as those sellers keep operating, the tree looks to be blossoming.

If this is the true state of affairs, then the whole sorry saga raises a bunch of uncomfortable questions, not only for viagogo — who, under Section 92 of the UK’s Consumer Rights Act, are duty bound to report criminal activity (such as fraud) to the police — but also for investors, regulators and enforcement agencies.

On the back of a costly long-running investigation that has made substantial progress in cleaning up secondary ticketing in the UK, it feels absurd that these serious allegations raised about viagogo are not being pursued more vigorously.

The CMA, in particular, have been provided with extensive evidence of large-scale fraud, they’ve witnessed test purchases where fraud was openly committed, as well as what appear to be overt breaches of the law. However, rather than act on this evidence, their repeated response has been to roll out a confused and Orwellian PR statement:

“The CMA takes any allegations of breaches of the court order secured against Viagogo very seriously and will not hesitate to take action, including court action if necessary, if we find that Viagogo is failing to meet their obligations under the order. However, there are limits to our powers, and we are not able to investigate allegations of matters such as serious criminal fraud, which would be a matter for the Police.”

In other words, we won’t hesitate to take action; except we will hesitate to take action because we don’t have any powers. And, by the way, we’re not going to call the Police.

The CMA. Stuck in a web of contradiction

Let’s face it, if viagogo were a tiny High Street business, they would have been closed down yesterday.

However, this is a supposedly multi-billion-dollar global operation we’re talking about; and one with an appalling record of legal compliance, that has profited substantially through mis-selling tickets to UK audiences, and one whose merger will have significant future connotations for the entire UK’s live events sector.

The scandal of fake sellers committing fraud on this platform demands serious and immediate investigation.

FanFair Alliance has continually supported the CMA’s work to reform this absurd and artificially-fuelled market. However, if our regulator is genuinely unable to act on the evidence we’ve provided, then surely they should reach out to another agency that will — or simply refer these serious allegations to the Police.