Article about how a third-party ticket vending company fails to honour its agreements to sell tickets to a World Cup game to its customers: (StubHub cancels thousands of World Cup tickets, leaving fans furious and heartbroken)
He paid $11,380 Cdn months ago for a pair of premium seats to watch Canada play Qatar in a World Cup match in Vancouver last Thursday. They were to be a Christmas gift for family members.
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“They said, ‘Everything’s fine. Your tickets are 100 per cent guaranteed. We will get back to you in two to three hours.’ That never happened.”
StubHub cancelled his order while he was stuck outside the stadium. There was no explanation, no replacement and no refund, he said.
Let’s assume the article at face value and assume its representations are true.
From a financial perspective it sounds like the business model is StubHub buying put options on tickets for free, with the full benefit of capital usage of exercising said option for free.
For example, in the above transaction, StubHub received $11,380 for 2 tickets “months ago”. As they were a Christmas Gift, assume this was done in December 2025.
StubHub thus received an interest-free loan for at least six months, coupled with a put option for the tickets – essentially they had a six month window of opportunity to purchase “premium seat” tickets for less than $11,380 and pocket the differential.
If they could not do this, then they can just say “Oops” and cancel the transaction the day of the event. Presumably this person will receive the $11,380 they originally paid.
So StubHub, financially, is realizing a value of the six month put option they purchased for free on the ticket transaction. What is the implied volatility of a world cup ticket? An interesting modelling exercise, no doubt.
Doing a paper napkin calculation, a put option expiring six months out with an implied volatility of 40%, roughly yields 10.4% of strike price.
Say StubHub’s cost of capital is 8% – when adding the option value and the free usage of capital for half a year means they netted about $1,640 for the pair of tickets without any risk whatsoever. If the tickets on the open market went “into the money”, the realized profits would be locked in, instead of theoretical. Not a bad business model, noting the other winner here is going to be Visa or Mastercard for the interchange fees.