WEBVTT - StubHub CEO Eric Baker Talks IPO Debut

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Shares of stub Hub. We'll start trading today with the

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<v Speaker 2>shares haveing in priced at twenty three dollars fifty. That

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<v Speaker 2>values the company in around eight point six billion dollars.

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<v Speaker 2>The ticket reseller is the latest company to go public

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<v Speaker 2>in a USIPO market. Experience a bit of a hot

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<v Speaker 2>Streak's speak with StubHub CEO Eric Baker, who joins us

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<v Speaker 2>now from the nys E. Eric, the history. You set

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<v Speaker 2>up this company in the year two thousand, sold it

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<v Speaker 2>to eBay, bought it back, amalgamated with a European giant

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<v Speaker 2>you'd already built, and now it goes public. How does

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<v Speaker 2>it feel.

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<v Speaker 1>It's it's tremendous, a lot of gratitude to reach the

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<v Speaker 1>smilestone for the company. It's certainly been a long journey,

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<v Speaker 1>as you say, from two thousand, but now we're really

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<v Speaker 1>focused on the next twenty five years and the bright

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<v Speaker 1>future ahead.

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<v Speaker 2>Take us to the next twenty five years. Because there

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<v Speaker 2>are regulatory headwinds, there are people worrying about bots. There

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<v Speaker 2>are a way in which you can beef up this

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<v Speaker 2>business to add more things in secondary market ticket sales

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<v Speaker 2>where do you go when do you focus?

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<v Speaker 1>Yeah, So our focus really is we've always wanted to

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<v Speaker 1>make it easier for people to access live events, and

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<v Speaker 1>so what we started with is, as you noted many

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<v Speaker 1>years ago, was to make the resale market safe and

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<v Speaker 1>secure and easier for people to access tickets. What we're

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<v Speaker 1>focused on now is we realize consumers don't care whether

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<v Speaker 1>it's a primary ticket or a secondary ticket. They just

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<v Speaker 1>want to access the live events that they want to

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<v Speaker 1>go to and discover easily, safely, and so forth. And

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<v Speaker 1>that system has been pretty broken for a long time

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<v Speaker 1>how those tickets are originally distributed. So we're really working

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<v Speaker 1>on creating a better experience, and we've already had exciting

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<v Speaker 1>partners like the Yankees and Major League Baseball. We started

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<v Speaker 1>selling tickets directly in this open distribution network.

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<v Speaker 3>You look at going public in a time where Taylor

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<v Speaker 3>Swift had gone through the EARS tool, there was a

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<v Speaker 3>lot of hype and mentum and you hit pause. You're

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<v Speaker 3>doing it now, And I think a big question everyone's

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<v Speaker 3>got for you, Eric, whether they're a consumer or not,

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<v Speaker 3>is what happens next with a regulatory crackdown. The practices

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<v Speaker 3>of your industry are very much under the microscope at

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<v Speaker 3>the moment.

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<v Speaker 1>Well, I think, first of all, we're always excited to

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<v Speaker 1>be at the intersection of technology and live events because

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<v Speaker 1>we're very bullish on the future live events, and we

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<v Speaker 1>think that doesn't change to your question about regulatory focus,

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<v Speaker 1>I think two of the things really people have looked at.

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<v Speaker 1>One was transparency and pricing that we at subub have

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<v Speaker 1>always advocated for, and that all in pricing that we

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<v Speaker 1>lobbied for a pass at the federal level in May,

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<v Speaker 1>and that's just a better experience for consumers, and the

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<v Speaker 1>key is it's now a level playing field for everyone

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<v Speaker 1>in the market. I think the second real regulatory focus,

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<v Speaker 1>quite frankly, has been what the Justice Department is looking

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<v Speaker 1>at with the primary issuance of tickets and making sure

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<v Speaker 1>that networks are open and fan friendly, and that is

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<v Speaker 1>something we certainly applaud because you know, we're on the

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<v Speaker 1>side of the fan. Eric.

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<v Speaker 3>Is aus Fisher Intelligence a headwind or a tailwind for

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<v Speaker 3>the secondary ticketing market.

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<v Speaker 1>Yeah, we see it as a tremendous opportunity to tremendous tailwind.

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<v Speaker 1>And I think if you think think about it again,

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<v Speaker 1>we're a technology and product company and I think Alex

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<v Speaker 1>Karp at Palentier, I don't want to miss a tribute

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<v Speaker 1>and put it really well that he said, the artificial

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<v Speaker 1>and talence technology for companies that have tremendous data allows

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<v Speaker 1>you to provide a better product while increasing your revenue

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<v Speaker 1>tremendously and reducing costs so that everyone wins. And we're

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<v Speaker 1>seeing that across the board, how we deal with customer service,

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<v Speaker 1>how we're releasing new features in the product to make

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<v Speaker 1>it easier for people to locate the tickets they want.

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<v Speaker 1>So we're very excited about it. And again with the

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<v Speaker 1>leadership position we have and the scaled proprietary or proprietary

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<v Speaker 1>data we have, we think this guy's the limit.

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<v Speaker 2>We are speaking with Eric Baker, founder CEO stub Hub

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<v Speaker 2>to our radio and TV audiences. You say AI could

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<v Speaker 2>help drive revenue tremendously. Let's talk about your revenue thus far,

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<v Speaker 2>because the first half of the year is about three

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<v Speaker 2>percent growth. That is significantly slower than the previous Now

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<v Speaker 2>we know that maybe we haven't had Tata Swift on

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<v Speaker 2>tour this year, but Eric, are you seeing a slowdown

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<v Speaker 2>in demand?

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<v Speaker 3>Yeah?

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<v Speaker 1>So, thank you. Note we're really seeing people continuing to

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<v Speaker 1>buy tickets and growth. I think you note it's important

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<v Speaker 1>to note two of the things that happened that are

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<v Speaker 1>unique this year. One is Taylor Swift and her tours

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<v Speaker 1>behind us, and there is only one Taylor Swift, so

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<v Speaker 1>I think she's so tremendous. We even broke her out

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<v Speaker 1>in the S one, so it's great to be that popular.

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<v Speaker 1>Second is, as I mentioned all in pricing past in May,

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<v Speaker 1>and when we lobbied for it, we knew that that

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<v Speaker 1>creates a one time hit to the market as consumers

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<v Speaker 1>just adjust. We've seen that already in states like New

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<v Speaker 1>York that had passed it before. So when you look

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<v Speaker 1>through those headwinds, the business is growing extremely nicely, north

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<v Speaker 1>of twenty percent.

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<v Speaker 2>I'm interested, though, on your profitability or lack thereof, Eric,

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<v Speaker 2>because it's interesting you've gone to public without that story

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<v Speaker 2>to tell. When will it become the story you can tell?

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<v Speaker 1>Yeah? No, I think what you're referring to is by

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<v Speaker 1>the accounting metrics like net income that it shows a loss.

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<v Speaker 1>But I think when we went on the road show

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<v Speaker 1>and when investors look, they really look at EBITDAH, which

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<v Speaker 1>is your earnings before more interest, tax, appreciation, amortization, as

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<v Speaker 1>well as your cash flow, and on that dimension, we've

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<v Speaker 1>been profitable for a long time and generating hundreds of

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<v Speaker 1>millions of dollars. That's the way we've been able to

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<v Speaker 1>service the debt that we've had, and obviously now that

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<v Speaker 1>we're deleveraging and taking the debt down, our cash flow

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<v Speaker 1>will even go up further. So I think that's one

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<v Speaker 1>of the many reasons that our story was very well

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<v Speaker 1>received when we went out on the road show and

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<v Speaker 1>buy our new partners.

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<v Speaker 3>Eric Bloomberg did some deep reporting on the FTC looking

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<v Speaker 3>at ticket master arrival on the issue of bots hoovering

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<v Speaker 3>up sale tickets for resale, and they're inaction. Have you

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<v Speaker 3>discussed that issue with the regulator and how are you

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<v Speaker 3>addressing the problem.

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<v Speaker 1>Yes, we've always in bots, and it's interesting, as you note,

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<v Speaker 1>is really about how these tickets are distributed in the

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<v Speaker 1>first place, and so one of the things we've always

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<v Speaker 1>lobbied for is enforcement of the Bots Act, and that's

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<v Speaker 1>really because we believe that these tickets need to be

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<v Speaker 1>distributed in a way that's safe, secure, democratic, through open channels.

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<v Speaker 1>As you mentioned, they're looking at I believe ticket Master

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<v Speaker 1>and others who are handling the primary issues of the tickets,

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<v Speaker 1>and they really need to make sure that their technology

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<v Speaker 1>and safeguards are in place to make sure this doesn't happen.

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<v Speaker 1>But again it's something that we're very pro consumer. That's

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<v Speaker 1>how we win. So we hope that all that stuff

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<v Speaker 1>gets cleaned.

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<v Speaker 3>Up, Eric, very quickly. Next year's soccer or football World Cup.

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<v Speaker 3>How big an opportunity is that for Subhub.

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<v Speaker 1>Look, we love the World Cup. It's been a phenomenal

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<v Speaker 1>event because think about it, we run the largest global

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<v Speaker 1>platform in the world for ticket exchange for all kinds

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<v Speaker 1>of events. And if you had to say what is

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<v Speaker 1>the largest global event in the world, I think you

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<v Speaker 1>canonymously say it's the World Cup. It's people from all

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<v Speaker 1>over the world traveling to come see events. It's going

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<v Speaker 1>to be in North America. It's extremely exciting and we're

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<v Speaker 1>excited to hopefully help as many fans as possible make

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<v Speaker 1>their dreams come true to access getting to the World Cup.

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<v Speaker 1>So we're all football fans, so to speak, and twenty

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<v Speaker 1>twenty six.

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<v Speaker 3>Were football fancied too. Eric Baker, founder and CEO Stubbub

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<v Speaker 3>Holding's great to have you on the program. Thank you