StubHub drops 13% as D.C. ticket resale cap threatens revenue

StubHub shares lost 13% this week after Washington D.C. capped secondary-ticket markups at 10%, the latest in a wave of North American resale restrictions that analysts say could cut the company's revenue by 30%.

A 10% cap on ticket resale markups in the nation's capital threatens to erode StubHub's core business model, with Citigroup estimating the company could lose nearly $100 million in EBITDA if similar measures spread.

"The D.C. law joins a growing list of jurisdictions that have imposed legal caps on ticket resales, and if those caps average 15% for StubHub, its revenue could take a hit of around 30%," said Jason Bazinet, an analyst at Citigroup.

The RESALE Act — short for "restricting egregious scalping against live entertainment" — passed the D.C. City Council on Tuesday and takes effect Jan. 1, 2027. StubHub shares fell 13% for the week ending July 17, according to data compiled by S&P Global Market Intelligence. The broader S&P 500 dropped 1.1% over the same period.

If 20% of StubHub's ticket sales become subject to legally mandated caps, its EBITDA could slide by about $95 million, Bazinet calculated. With similar legislation already introduced in New York, Massachusetts, California and North Carolina, the company faces an expanding regulatory patchwork that could force a fundamental shift in how it prices secondary-market tickets.

Ontario's experience offers a preview

Ontario's price cap, which took effect in April 2026, already shows how such policies play out in practice. The law caps resale prices at face value plus taxes and fees — a stricter standard than D.C.'s 10% markup limit. Season ticket-holders for the Toronto Raptors and Toronto Tempo have reported difficulty recovering costs for games they cannot attend, with some considering giving up their seats entirely.

FIFA removed resale tickets for Toronto's World Cup matches from its official marketplace after the province enacted the cap, while resale remained available in other host cities. The disruption highlights a broader concern: price caps may push secondary-market activity into unregulated channels where consumer protections are weaker.

California and New York weigh similar curbs

California's Assembly Bill 1720 would cap resale markups at 10% above the original price, inclusive of fees. New York lawmakers have also considered reforms targeting concert ticket resale prices. Both measures are backed by Live Nation, which owns Ticketmaster, creating an unusual dynamic where the dominant primary-ticketing platform supports restrictions on its secondary-market competitors.

For StubHub, the stakes are clear. The company relies on markups for profitability, and each new jurisdiction that adopts a cap reduces the addressable market for its core service. If all five states currently considering legislation follow through, the company could face revenue constraints across some of the largest entertainment markets in North America.

This article is for informational purposes only and does not constitute investment advice.