Vivid Seats discloses it purchased domain name for $17.3 million

Firm converts license into domain buyout.

Event ticket seller Vivid Seats (NASDAQ: SEAT) disclosed a $17.3 million domain name buyout in its latest annual note.

On October 22, 2024, we purchased a domain name that we had previously licensed (the “Purchased Domain Name”). In exchange for the Purchased Domain Name, we are required to disburse monthly interest-free cash payments totaling $31.4 million through June 2040 (the “Purchased Domain Name Obligation”).

We account for the Purchased Domain Name as a definite-lived intangible asset under ASC Topic 350, Intangibles—Goodwill and Other. The buyout cost of the Purchased Domain Name was $17.3 million, which will be amortized over a period of 15.6 years (the “Purchased Domain Name Term”). As of December 31, 2024, the Purchased Domain Name had a carrying value of $17.3 million, which is recorded in Intangible assets – net in the Consolidated Balance Sheets.

As best I can tell, the buyout is a conversion of a license it entered into in 2005.

In the firm’s prospectus filed in 2023, Vivid Seats stated:

In 2005, the Firm entered into an agreement for use of an internet domain name with an unrelated party. Under the terms of the agreement, the Firm is obligated to pay approximately $2,500,000 per year until the agreement expires in 2040. The Firm has the option to terminate the agreement at any time, provided they operate the domain for a period of thirty days following termination.

Since that leased domain had an expiration date, it makes sense that the firm would want to lock up the domain even if it has to pay substantially more per year.

[See update below] Given the dates, it suggests that this mammoth payment is for the domain vividseats.com. What’s confusing is that the domain was registered to VividSeat’s founder, Jerry Bednyak, ahead of 2005. It would seem this would have made him a related party. This would also make it more than just regarding a domain name.

The firm also owns Vegas.com, but that was through an buyout disclosed in November 2023.

Update: it appears this might be the LasVegas.com domain name, which George Kirikos spotted was under lease when Vivid Seats purchased Vegas.com. So it appears the firm has converted the lease of LasVegas.com into a purchase agreement.

I contacted Vivid Seats. Its investor relations department stated it would not be providing further information.