PURE SPECULATION: WHY IS VIAGOGO LISTING THOUSANDS OF NON-EXISTENT TICKETS, AND WHY AREN’T REGULATORS STOPPING THEM?
Last month, so-called “secondary ticketing” platform viagogo removed an estimated £1m+ of fake and fraudulent tickets from its UK website — mostly for large outdoor festivals such as Reading, Parklife, TRNSMT and Wireless, but also for upcoming shows from Billie Eilish, The Weeknd, Nothing But Thieves, Tom Jones, Fatboy Slim, Lorde, The Kooks, The Charlatans and many, many others.
Remarkably, it’s the second time this year viagogo’s operators have been shamed into stripping great swathes of touted inventory from their UK site.
Back in March 2021, on the back of research collated by FanFair Alliance, The Guardian’s Rob Davies reported how viagogo was participating in the listing of tens of thousands of tickets for shows at small-scale grassroots events across the UK and Europe.
Incredibly, these tickets all emanated from a single lone seller — a mysterious Spanish company called GES SL, based at Alcala 150, Madrid, 28009 — and were presented in what appeared to be cloned or identikit patterns (usually 24 tickets per event, broken down into batches of 8, 6, 4, 3, 2, 1) and for astonishing sums of money.
The listings were odd to say the least.
Most touts aim to turn a profit at high-demand events. Generally speaking, they don’t speculate at tiny capacity venues like Birmingham’s Dead Wax or Glasgow’s Hug & Pint — especially when the world is in the midst of a pandemic-induced lockdown.
Similarly, they rarely price tickets at 10 times over face value. Something GES SL appeared to be doing systematically .
Two test purchases confirmed what we suspected. GES SL’s listings were “speculative”. Or, to put it another way, viagogo’s single biggest supplier was committing a mass-scale multimillion pound fraud and selling tickets they didn’t possess.
Even more troubling, evidence suggested GES SL was closely connected to viagogo itself — details of which were passed onto the Competition & Markets Authority (CMA), the UK’s business regulator who has been investigating viagogo for five years, and served them with a court order in November 2018.
Curiously, when The Guardian published these revelations, GES SL’s tickets disappeared from viagogo overnight.
*******************************************************************
Fast forward to July 2021, however, and yet more viagogo phantoms appeared.
This time, they were called Sofia Wagner, a Munich-based seller listing thousands of extortionately expensive tickets to UK festivals and arena shows; H.E Events, a Dundee-based business listing thousands of extortionately expensive tickets to live events in the UK and globally; and Ticketing Expert LTD, a business registered to a bogus UK address that replicated the questionable “grassroots” model pioneered by GES SL.
From painstaking research, it appeared that these 3 sellers were responsible for an astonishing percentage of viagogo’s total inventory.
Together, they frequently accounted for up to 80% of the site’s listings at major UK festivals, while Ticketing Expert LTD was touting tickets at literally thousands of grassroots events in the UK and Europe.
Given what had occurred with GES SL, it all appeared highly dubious.
If Sofia Wagner, H.E. Events and Ticketing Expert LTD proved to be similarly fictitious then it would lead to a fairly obvious conclusion: viagogo’s business model runs on thin air.
Interestingly, this is what the CMA’s merger team appeared to conclude in a report published in February 2021. Looking over the accounts of viagogo and StubHub, they estimated that overall sales value of the UK’s “uncapped” ticket resale market in 2019 was £350m. A substantial figure, yes, but considerably less than the £2.5bn market value claimed by viagogo and StubHub.
The UK’s secondary ticketing market appeared to be worth less than 20% of what was claimed by its “leading” participants.
Then, on Monday August 16th, two investigations drawn from FanFair’s evidence were made public.
In the first, the Daily Record’s chief news reporter, Mark McGivern, doorstepped occupants of a relatively modest property in Dundee that was supposedly the headquarters of H.E Events. However, rather than an international ticket touting ring, he was greeted by two confused and unsuspecting pensioners — neither of whom knew anything about secondary ticketing or viagogo.
The second investigation, by Shari Vahl at BBC Radio 4’s You & Yours dug even deeper, holding the identities of Sofia Wagner, H.E Events and Ticketing Expert LTD up to the light. Shari uncovered what appeared to be a premeditated pattern of cloned and speculative listings by all three sellers. Just like GES SL, these activities appeared to constitute industrial-scale fraud, and also implicated viagogo in multiple breaches of consumer protection laws and the terms of their court order.
Responding to Shari’s allegations, a viagogo spokesperson claimed Sofia Wagner, H.E. Events and Ticketing Expert LTD were all bona fida sellers with “a good track record…including successfully fulfilling orders.” The spokesperson then added, “we take allegations of the misuse of our platform very seriously and take action to remove listings if necessary.”
Paradoxically, however, viagogo then proceeded to remove all Sofia Wagner’s tickets at one stroke, although H.E. Events were permitted to continue operating through a new PO Box address in Manchester. Contrary to viagogo’s claims, we believe H.E. Events has since morphed into a new identity and continues to fraudulently list tickets.
We also believe that other fake sellers continue to operate across the platform.
Even more bizarre were the listings for Ticketing Expert LTD.
As already highlighted, this untraceable company had previously declared itself registered at a non-existent UK address — composed of a road in Oxford, a town in Devon and a postcode near Crewe.
Following the You & Yours broadcast, this registration changed to a bogus address in Madrid and then, days later, Ticketing Expert LTD shifted into a new identity entirely. Viagogo now claimed it was called the Ryan & Jacob Corporation, and based on 6th Avenue in New York.
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.
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.
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.
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?
*******************************************************************
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.
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.
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.
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.
