Month: December 2023

Vivid Seats will acquire LasVegas.com deal as part of their Vegas.com transaction

I continue to not disclose new and significant domain name transactions that I’ve discovered via SEC filings research, due to parasites who do not properly cite that research and/or make copycat articles to generate pageviews and eyeballs for themselves. Instead of simply retweeting and linking to the original research itself, so that the original researchers receive the full credit and attention for their work, these parasites want a piece of the action without putting in the hard work themselves.

I continue to invest the time to research for myself, though. While researching other transactions, I stumbled across a tidbit related to an older public transaction, though (which is thus not a “new” transaction).

As some folks might remember, I broke the news about the USD $90 million LasVegas.com deal, tweeting on November 6, 2015:

This was uncovered before I launched this blog, and was written about on TheDomains, DNJournal, and elsewhere.

Fast forward to November 2023, when Vivid Seats announced the acquisition of Vegas.com for USD $240 million. This was widely reported, and of course isn’t a “pure” domain name deal (given that Vegas.com is a developed website) however most people simply focused on Vegas.com, and ignored the fact that LasVegas.com (worth far more than Vegas.com as a domain name name) was part of the deal!

How do I know this? The key tidbit was buried in a SEC filing made by Vivid Seats this week, where they disclosed:

“In 2005, the Company entered into an agreement for use of an internet domain name with an unrelated party. Under the terms of the agreement, the Company is obligated to pay approximately $2,500,000 per year until the agreement expires in 2040. The Company has the option to terminate the agreement at any time, provided they operate the domain for a period of thirty days after termination.” (page 15)

What they’re describing is the ongoing LasVegas.com deal! Here were the terms of that deal as discovered in 2015:

Note 7.
LasVegas.com Purchase Obligation

In June 2005, VEGAS.com, LLC entered into an agreement for the purchase of LasVegas.com. The agreement specified that a $12,000,000, one-time payment be made upon execution of the agreement along with monthly payments of approximately $83,000 for 36 months, $125,000 for the next 60 months, and then $208,000 for the next 36 months. Per the terms of the agreement, after June 30, 2016, following the 132 initial monthly payments, VEGAS.com, LLC in its sole discretion may terminate the agreement and forfeit the domain name. If VEGAS.com, LLC chooses not to terminate the agreement, they will continue making the monthly payments of approximately $208,000 until June 30, 2040, at which time the seller will transfer the domain name to VEGAS.com, LLC without further payment or cost to VEGAS.com, LLC. (from Note 7 on page 13 of SEC filing)

$208,000 per month (the amount of the payments after June 30, 2016) equals $2,496,000 per year, which is “approximately $2,500,000” as per the Vivid Seats filing this week.

Is there any other evidence that shows Vegas.com is still operating LasVegas.com? There sure is! Let’s do some sleuthing, since they don’t make it too obvious from the actual websites themselves:

(a) The “A” record (the IP address where the domain name’s website is hosted) for Vegas.com is (using the Google Admin Toolbox) is 64.12.0.13 for vegas.com and  64.12.0.14 for LasVegas.com, which are nearly identical (same hosting provider, and IP address block).

(b) The “CNAME” records for each domain with a “www” subdomain are:

(i) for www.vegas.com: fp2f9f.wpc.18c9ff.zetacdn.net.
(ii) for www.lasvegas.com: fp2fa0.wpc.18c9ff.zetacdn.net.

indicating that they’re using the same content delivery networks (subdomains of zetacdn.net).

(c) while the visual styles of the two websites are a bit different, their terms of service pages are nearly identical! Using a text comparison tool, one can copy the terms of service from:

https://www.vegas.com/about/terms/

and

https://www.lasvegas.com/about/termsofuse.html

and compare the two. Every “VEGAS.com” was changed to “LasVegas.com”, and the address/contact info was changed too.

(d) Or perhaps most simply, they disclose in Section 19 of the above terms that the “Nevada Seller of Travel Registration No” is 2003-0113, the same registration number on both sites!

(e) Going back to this week’s SEC filing, pages 5 and 7 also mention “LasVegas.com, LLC“. I suppose that makes things definitive!

June 30, 2040 is 16 years and 7 months away. Thus, at $2.5 million/year, Vivid Seats will need to pay approximately $41.5 million over that period in order to finally own the LasVegas.com domain name.  Approximately $48.5 million has already been paid towards the LasVegas.com domain name, far surpassing the $30 million Voice.com deal. Hopefully Ron Jackson of DNJournal will still be with us in 2040 so that he can officially “chart” the $90 million transaction, although I suspect that it might not be the highest public reported domain name deal on that date….we shall see.

If $2.5 million per year is a feasible investment for a company to lease a domain name, for a company worth a mere $240 million, how much can much larger enterprises justify investing to capture the enormous economic benefits that flow from owning elite domain names? Instead of leasing the domain name over 35 years, what’s the value of a lump sum one-time all cash payment? Research the “relief from royalty method” of valuation, and you will find the answer.

In conclusion, elite domain names continue to be extremely valuable, as demonstrated by the ongoing lease of the LasVegas.com domain name, an important piece of the Vegas.com transaction that few have picked up on.