SeatGeek reported record fourth-quarter revenue Monday morning of $82.5 million, 17 times the level from the comparable COVID-19-impacted 2020 quarter when most live events were suspended. Revenue for the ticketing platform was 45% ahead of the third quarter total, while full-year revenue hit a record $186 million.
“The financial result is a manifestation of a broader strategy, which is ultimately to use technology to transform the ticketing experience for fans, and to allow teams and venues and promoters to operate their businesses better and reach more fans,” Jack Groetzinger, SeatGeek CEO and co-founder, said in a phone interview.
Groetzinger also said the company was on track to close its merger with RedBall Acquisition Corp., the special purpose acquisition company formed by RedBird Capital Partners founder Gerry Cardinale and baseball executive Billy Beane, by the end of the second quarter. The SPAC raised $575 million in an IPO in 2020 and announced a deal for SeatGeek in October that valued the platform at $1.35 billion. RedBall was the first sports-focused blank check company in more than a decade.
The SPAC market remains extremely choppy, as more than 50 SPACs have already canceled plans to hold IPOs this year, including 11 sports-related SPACs. Last month, RedBall extended the closing deadline for the SeatGeek merger from April 13 to June 27, according to an SEC filing.
SeatGeek is a ticket retailer that offers primary ticket sales and resales. It was founded in 2009 and has direct relationships with teams like the Dallas Cowboys, Brooklyn Nets, Arizona Cardinals, Cleveland Cavaliers and New Orleans Saints, and also controls the event ticketing for the non-team events in most of these clubs’ venues. The company has a large presence outside the U.S. through deals with 11 of the 20 Premier League clubs, including Liverpool and Manchester City.
Many of SeatGeek’s venture capital backers are tied to the sports world. They include Causeway Media Partners, co-founded by Boston Celtics owner Wyc Grousbeck; Melo7 Tech Partners, co-founded by Carmelo Anthony; and Elysian Park Ventures, founded by the owners of the Los Angeles Dodgers. Individual investors include former NFL quarterbacks Peyton and Eli Manning.
The RedBall-SeatGeek transaction includes $100 million in private investment in public equity (PIPE) financing, which is being provided by Utah Jazz owner Ryan Smith, Kevin Durant’s Thirty Five Ventures, existing investor Accel and others.
SeatGeek posted 70% annualized revenue growth between 2016 and 2019, but it was hammered during 2020 when COVID-19 halted live events, and revenue plummeted 77% from $142 million. The company expects sales to hit $1.2 billion in 2025 and reach profitability on an adjusted EBITDA basis, which excludes equity-based compensation costs, in the second half of 2023. Net income was negative $80 million for 2021.
Technology is being integrated into the ticketing process more than ever, as the paper ticket becomes obsolete, and there has been a convergence of the primary and secondary markets, while teams zero in on the data insights available from these tickets. SeatGeek is poised to take advantage of the massive global primary and secondary ticketing market, which is expected to reach $126 billion in 2022.
Groetzinger sees the merger with RedBall as an opportunity to “double down” on its vertically integrated technology strategy, and added, “It is a major milestone for SeatGeek, but it is really just the beginning of what will be a new part of growth as a company.”
With assistance from Brendan Coffey
(This post has been updated in the eighth paragraph to provide the correct figure for net income.)