AEG and EBAY Partnership

Ticket Firm AEG, StubHub to Align

November 11, 2012, 7:20 p.m. ET

By ETHAN SMITH And GREG BENSINGER

     In the article "Ticket Firm AEG, StubHub to Align" written by Ethan Smith and Greg Bensinger for the Wall Street Journal, the readers learn about a new partnership in the works. According to the article, Anschutz Entertainment Group has planned to unite with EBay to make StubHub an official partner of AEG. 

     AEG claims that within the next year customers will be able to buy a ticket on AEG, and then be capable of either buying or selling on StubHub. This focus is on giving the consumers the options to do as they please. 

     While they traffic their business to StubHub for every ticket sold or bought on StubHub, AEG picks up an undisclosed amount of commission. 

      There are several goals of the partnership besides profit. For starters, AEG wants to gain control of the high prices that result from third parties and scalpers. Secondly, the companies hope that they can together buy startups, and even create new technologies. And lastly, the main purpose to begin to compete more virgorously with the LiveNation's ticketmaster. 

     All of this comes after learning that AEG is being sold. According to Smith: "AEG, owned by Denver billionaire Phil Anschutz's Anschutz Co., owns roughly 100 large venues around the world, including the O2 arena in London and Staples Center in Los Angeles. Anschutz is in the process of selling AEG, for a price expected to top $7 billion."


     In my opinion, I think that this was a smart decision for AEG, but I failing to see the positives for StubHub. From what I have read and began to understand they are not really gaining anything significant. In fact, they are just most losing commission. I acknowledging that they are reaching the finances and backing of a large company such as Anschutz Entertainment Group, however, the returns do not seem to stand out as crucial investments. 
     In turn, collectively I believe in terms of competing with LiveNation that this will help both companies. Inarguably, LiveNation has hold on the ticketing and entertainment industry. With that being said, the partnership of two popular companies will most likely be able to garner enough attention to gain customer's valuable ticket sales and buys. Ultimately, I am really unsure how this will all work out, but I am really curious. I plan to follow this partnership and all of its aspects closely starting from the beginning.

Topics: Partnership, Competition
Wall Street Journal Article