Viagogo obtains a new loan of 330 million dollars. No reimbursement by the advertised consumer.
I often write about Viagogo, the UK based ticket reseller who recently bought StubHub because its founder, Eric Baker, is the Travis Kalanick of tickets. He sets his own rules and often they stick to them.
Yesterday, to the surprise of many in the industry, it became public that Viagogo can still borrow money. This was unexpected as the coronavirus caused almost all live entertainment events around the world to shut down, crushed Viagogo’s ability to resell tickets, and really reduced their cash flow. This week, I published an article on refunds owed to consumers by Viagogo and their wholly owned sister company StubHub.
These refunds, which I estimate to be between $ 1 billion and $ 3 billion, accumulate as companies only offer vouchers to consumers. Given the extent of these repayment obligations, I thought there was almost no chance that Viagogo would get a business loan.
However, Moody’s Investors Service reported yesterday that Baker’s company PUG LLC, which operates as Viagogo, has received a $ 330 million loan to add liquidity to its balance sheet. The loan is due in February 2027. The taking of this loan did not affect the credit rating of the company. Why?
The key phrase from Moody’s report is buried in the details: “We expect excess cash will remain on Viagogo’s balance sheet to ensure that cash is available to run operations during the pandemic and will not be used to fund distributions or payments. acquisitions. Moody’s goes on to say that Viagogo has over $ 700 million in cash and the ability to operate on “nominal amounts of income for two years.”
The ticket sales outlook, as set out in Moody’s report, foresees a gradual increase in revenue by mid-2021, but 2021 revenue for Viagogo will remain well below 2019 levels. In other words, the earliest they see a return to normal ticketing activity is 2022. That tells me that anyone holding a Viagogo or StubHub voucher instead of a refund should expect to keep between 18 and 24 months before they attend an event. . I have a request for comment from Viagogo and will update this story if they respond.
Companies run by dynamic entrepreneurs always seem to find a way out of the crisis. Viagogo continues to surprise. I intend to continue to monitor them closely. Eric Baker has more lessons to teach those of us who are listening.