When Vancouver's Mark Gallagher logged onto StubHub in February to buy World Cup tickets, he thought he was buying from another fan who couldn't make it.
“It's presented as a reliable, trustworthy source of resale tickets for people who want to sell their tickets,” he told CBC News.
But a CBC investigation found that even though StubHub claims to be a “marketplace for fans to buy and sell tickets,” the online ticketing company is run by a mass scalper and helps bankroll other big sellers who use the platform.
“I really didn't know,” Gallagher said. “That doesn't seem fair to me.”
StubHub is reportedly the biggest player in the resale industry where professional scalpers collect billions of dollars worth of tickets to mark up for resale at a profit.
StubHub's business model – legal – has moved US$9.2 billion in tickets by 2025 and has been under scrutiny as the company has canceled thousands of World Cup orders, leading to investigations by Consumer Protection BC and the Texas attorney general, as well as two proposed class-action lawsuits in the US.
Mark Gallagher tells CBC News about the frustration of being assured his World Cup tickets would arrive – only to arrive at BC Place in Vancouver empty.
The company recently told CBC “StubHub does not own, own, or sell tickets. We are a technology platform that connects private buyers and sellers. (Think: eBay).”
However, in recent installation and the US Securities and Exchange Commission, StubHub CEO Eric Baker revealed that he not only runs a major resale platform, but is also part owner and managing director of Andro Capital, the fund that sells multi-million dollar tickets to StubHub.
CBC asked Baker for an interview to discuss his companies — and the conflict between weight loss services on StubHub and its marketing as “fan market.”
Baker and StubHub declined repeated requests to speak to CBC.
“This information is fully disclosed in StubHub's public SEC filings, and we have nothing to add beyond what is in those filings,” a spokesperson said in an email earlier this week.
StubHub bankrolling scalpers 'revelation'
Those SEC filings also show that StubHub made an agreement with an affiliate of Baker's fund to bank several other mascalpers, to help them buy and ship a large number of tickets for resale on StubHub.
All of this conflicts with the company's marketing image, says Randy Nichols.
“It's very deceptive. StubHub has told the public that they are a marketplace, they want to be treated as a marketplace,” said Nichols, a New York-based band manager who has conducted extensive research into the ticketing industry on behalf of the National Independent Talent Organization.
“What they're leaving out is that their CEO is selling big tickets.”
Jeff Ripley of Spokane, Wash., who confirmed on game day after buying World Cup tickets on StubHub, told CBC News “that sounds like a conflict of interest.”
“I think most of us know that, yes, there are a lot of scalpers out there,” said Ripley, who has since filed a dispute over his refund.
“But now to find out that StubHub is providing temporary funding to those many abusers to buy tickets – that's a revelation.”
Mass scalpers dominate resale tickets
Fans have seen a major shift in the online ticketing industry over the past two decades with the rise of websites like StubHub, Clear Seats and SeatGeek.
Concertgoers often find themselves lost to tech-savvy sellers who harvest tickets from primary box offices to resell on these sites.
Professional dealers and brokers prefer to describe themselves as the “secondary ticket industry,” but they extract billions of dollars in profits from fans, artists and venues each year by marking up prices, based on market finance research by Mordor Intelligence.
A small number of companies sell all the tickets on StubHub, raising prices for everyday fans, Nichols said.
“I care about this because I recently watched artists I have worked with for years mocking their fans.
An estimated 70 to 80 percent of all ticket resale sites worldwide are controlled by multiple scalpers, according to several industry reports, including UK search on StubHub in 2021.
That's the math Dan Wall, senior vice president of Live Nation, which owns Ticketmaster, said in a recent interview with CBC.
Ticketmaster, the world's largest box office company, it allows scalpers and professional fans to post tickets for resale on its website as part of its business model, though Wall admits the practice is ultimately “exploitative.”
The entire interview is with Ticketmaster/Live Nation CEO Dan Wall, where he talks about price volatility and wants to break up the company following the American antitrust ruling.
But buying from big scalpers hurts the fan experience, says business professor Christopher MacDonald.
“There seems to be a broad consensus that it's a problematic practice,” said MacDonald, a professor of ethics and critical thinking at the Ted Rogers School of Management at Toronto's Metropolitan University.
“It's not just that you have some guy holding cheap Bruce Springsteen tickets and he's going to sell them at a profit. I doubt that too many people will feel too, too worried about that. But if it happens on an industrial scale, it seems that – in important ways – it disrupts the relationship between the artist on the one hand and their audience.”
