Before the Los Angeles Galaxy soccer team takes the field Wednesday against… (Jay L. Clendenin, Los Angeles…)
Goodbye Home Depot, hello StubHub.
Before the Los Angeles Galaxy soccer team takes the field Wednesday against the Portland Timbers, the sports facility that for the last decade bore the home improvement chain's name will be re-christened the StubHub Center.
It marks the boldest move yet for one of the most recognized websites for buying sports and entertainment tickets to broaden its appeal outside the U.S.
"Soccer is the key sport in the rest of the world," StubHub spokesman Glenn Lehrman said. "Strategically, it made sense to put our name on a soccer stadium as we try to expand internationally."
StubHub had been looking to put its name on a stadium for several years, and it settled on the Anschutz Entertainment Group-owned facility in Carson after Home Depot opted against renewing its deal.
The San Francisco unit of EBay is believed to have signed a six-year deal worth more than $10 million annually, sources told the SportsBusiness Journal. EBay, which bought StubHub for more than $300 million in 2007, does not separately report revenue for the ticketing service.
The effort to expand globally is part of StubHub's goal to be a portal for not only finding out about events around the world but buying tickets to the events. StubHub bought events listing website Zvents at the end of 2011, and Zvents is only now starting to be integrated, Lehrman said. Although StubHub might have 30,000 events listed, Zvents has about 3 million.
"When you have 3 million events, you want to have tickets for 3 million events or, at least, have an experience that allows people to find a way to get to those events," Lehrman said of the delay in integrating the unit.
Industry tracker Ticketnews.com lists StubHub as the most-visited website for reselling tickets. StubHub sees expanding abroad and adding more services as ways to grow and fend off competition from start-ups and industry stalwarts.
StubHub runs a website where people can post tickets they want to sell. Buyers search for tickets they want to buy, with StubHub, and sometimes the event promoter, taking a cut of the sale. Though StubHub has struck special deals with Major League Baseball and AEG, it faces constant pressure by industry giant Ticketmaster in other markets.
For example, Ticketmaster gives event promoters the option to stop buyers from reselling their tickets on websites such as StubHub. Under this option the attendee must present the credit card used to purchase the paperless tickets.
StubHub is fighting the restrictions, but it recently lost a bitter battle to ban the practice in California.
A study published in May by a University of San Francisco sports management professor — and partially paid for by StubHub — found that Ticketmaster's use of paperless ticketing led to higher prices and fewer tickets on the secondary market.
"The more that Ticketmaster rolls this out, the more this will hurt the resale market," said Dan Rascher, the professor and industry consultant who completed the analysis. "You'll see certain events not on the resale market that normally are because Ticketmaster won't let those tickets be resold."
Individual teams have attempted to cut into StubHub's market, too. This season, the Los Angeles Angels of Anaheim and the New York Yankees launched their own websites for resales.
"Both of them dislike the open-market nature of StubHub," Lehrman said. "They felt that devalued their product and they wanted more control over that minimum price point."
Robert Alvarado, vice president of ticket sales for the Angels, said he's seen a better balance between tickets sold by the team and tickets sold elsewhere because the number of Angels tickets on StubHub is down from last season.
"We're comfortable about the performance of the site," Alvarado said.
For StubHub, the expansion into European soccer has also generated criticism. British law restricts the resale of tickets, though individual teams may allow it. Several clubs have deals with StubHub competitor Viagogo, but StubHub managed to strike deals with three soccer clubs last year. A small group of Tottenham Hotspur fans lodged a brief Twitter campaign denouncing the team's StubHub deal, saying a free marketplace would price out many fans.
The company is also facing competition from a number of start-ups. SeatGeek, for example, acts as an aggregator, compiling data from StubHub and other ticket websites so consumers can compare prices.
A Los Angeles start-up, ScoreBig, has sought to act as a Priceline.com for event ticket sales by providing an easy way for teams and brokers to dump tickets at the last minute. StubHub, in some cases, shuts off ticket sales a few hours in advance of an event.
The mounting challenges are pushing StubHub to find other ways to sell tickets and keep customers from defecting to rivals.
As cellphone service becomes more reliable inside crowded venues, StubHub hopes to launch more mobile applications designed to be used at events. Working with EBay and sister company PayPal, StubHub could offer ticket holders access to concessions, merchandise and seat upgrades. Lehrman said the company plans to test an app with the National Hockey League's Philadelphia Flyers next season.
StubHub also launched a rewards program last August that's attracted about 1 million members. Rewards members get money back for future purchases. They're eligible for perks, such as throwing out the first pitch at baseball games, leading USC's football team onto the field, and soon, a special seat at the StubHub Center.