Vivid Seats Announces Termination of Tax Receivable Agreement and Elimination of Dual-Class Stock Structure

Rhea-AI Summary

Vivid Seats (NASDAQ: SEAT) entered a Corporate Simplification Agreement on Oct 20, 2025 to terminate its Tax Receivable Agreement in exchange for 403,022 Class A shares and to eliminate its dual-class Up-C structure.

The transaction eliminates a $6 million cash payment due in Q1 2026, lets the company retain 100% of future realized tax savings (estimated up to $180 million lifetime), and is expected to reduce annual cash tax payments to about $3 million. The company also expects approximately $1 million of annual savings from simplified reporting. Post-transaction, Vivid Seats will have a single class of common stock with ~10.7 million Class A shares outstanding.

Positive

• Eliminates $6 million cash payment due Q1 2026
• Retains 100% of future realized tax savings
• Up to $180 million estimated lifetime tax savings
• Reduces annual cash tax payments to ~$3 million
• Saves ~$1 million annually from simpler reporting
• Consolidates to a single-class stock with ~10.7M shares

Negative

• Issued 403,022 Class A shares as consideration (dilutive)
• Exchange of Class B to Class A increases total shares to ~10.7M

Insights

Corporate Finance Analyst

Eliminating the TRA and dual-class structure materially improves cash flow and simplifies governance, with near-term and lifetime tax savings.

Vivid Seats will cease payments under its Tax Receivable Agreement by issuing 403,022 shares of Class A stock and removing the Up‑C structure, which eliminates a scheduled $6 million cash payment in Q1 2026 and transfers future realized tax benefits fully to the company, described as up to $180 million of lifetime savings.

The business mechanism is straightforward: ending the TRA retains tax amortization benefits that previously flowed to others and collapses two share classes into one, reducing ongoing cash taxes to roughly $3 million annually and cutting about $1 million a year in compliance/reporting costs. These changes reduce cash outflows and simplify reporting, while converting Class B holders to Class A stock creates a single‑class capital structure with about 10.7 million shares outstanding.

Key dependencies and risks include realization of the stated tax amortization over time and any tax or regulatory challenges tied to the termination; the company cites the special committee approval and legal advisors, which supports procedural soundness. Watch the filed Corporate Simplification Agreement on the Form 8‑K for exact terms, the timing of the TRA termination and any disclosed contingencies, and near‑term cash flow improvement reported in the next quarterly filing (first meaningful signal likely in the quarter including Q1 2026 results).

Strategic Actions Expected to Result in Meaningful Cash Savings

CHICAGO, Oct. 20, 2025 (GLOBE NEWSWIRE) -- Vivid Seats Inc. (NASDAQ: SEAT) (“Vivid Seats”), a leading marketplace that utilizes its technology platform to connect millions of buyers with thousands of ticket sellers across hundreds of thousands of events each year, today announced that it has entered into a Corporate Simplification Agreement to effect a series of transactions that will simplify its organizational structure, including by eliminating its existing dual-class, umbrella partnership C corporation (Up-C) structure and terminating its Tax Receivable Agreement (the “TRA”) in exchange for 403,022 shares of its Class A common stock.

The agreement eliminates $6 million of cash payments that would otherwise have been due in the first quarter of 2026 under the terms of the TRA, as well as future distributions to redeemable noncontrolling interests. Going forward, Vivid Seats will retain 100% of realized tax savings that, but for the TRA termination, would have been payable to the former TRA parties, resulting in up to $180 million of lifetime savings for the company. As a result, Vivid Seats expects to substantially reduce its annual cash tax payments to approximately $3 million, with future taxes primarily the result of taxable income generated in foreign jurisdictions. In addition, Vivid Seats expects to realize approximately $1 million in annual savings from reduced compliance and financial reporting costs associated with a single-class stock structure.

“This agreement results in near-term cash savings while enhancing our long-term cash flow profile with substantial tax amortization offsetting domestic income for the foreseeable future,” said Stan Chia, Vivid Seats’ Chief Executive Officer. “Our streamlined corporate structure will also reduce costs while simplifying financial reporting.”

As part of the transactions, the former TRA parties will exchange all outstanding shares of Vivid Seats’ Class B common stock (and corresponding units of Vivid Seats’ operating subsidiary) for shares of Vivid Seats’ Class A common stock on a one-for-one basis. As a result, Vivid Seats will have a single class of common stock with approximately 10.7 million shares of Class A common stock outstanding (including the shares of Class A common stock issued to Hoya Topco, LLC as consideration for the agreement).

A special committee of Vivid Seats’ Board of Directors, comprised solely of independent and disinterested directors, approved the agreement and transactions. Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisors to the special committee. Latham & Watkins LLP acted as legal advisors to Hoya Topco, LLC. Investors will be able to find the full text of the Corporate Simplification Agreement when filed by Vivid Seats on a Current Report on Form 8-K.

About Vivid Seats
Founded in 2001, Vivid Seats is a leading online ticket marketplace committed to becoming the ultimate partner for connecting fans to the live events, artists, and teams they love. Based on the belief that everyone should “Experience It Live,” the Chicago-based company provides exceptional value by providing one of the widest selections of events and tickets in North America and an industry leading Vivid Seats Rewards program where all fans earn on every purchase. Through its proprietary software and unique technology, Vivid Seats drives the consumer and business ecosystem for live event ticketing and enables the power of shared experiences to unite people. Vivid Seats has been recognized by Newsweek as one of America’s Best Companies for Customer Service in ticketing. Fans who want to have the best live experiences can start by downloading the Vivid Seats mobile app, going to vividseats.com, or calling 866-848-8499.

Forward Looking Statements
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to, without limitation: the timing and likelihood of the consummation of the TRA termination, the simplification of Vivid Seats’ corporate structure, and the other transactions described herein (collectively, the “transactions”), and the expected benefits therefrom, including future savings; and Vivid Seats’ future tax obligations. Words such as “anticipate,” “believe,” “can,” “continue,” “could,” “design,” “estimate,” “expect,” “forecast,” “future,” “goal,” “intend,” “likely,” “may,” “plan,” “project,” “propose,” “seek,” “should,” “target,” “will,” and “would,” as well as similar expressions which predict or indicate future events and trends or which do not relate to historical matters, are intended to identify such forward-looking statements. Forward-looking statements are not guarantees of future performance, conditions, or results, and are subject to risks, uncertainties, and assumptions that can be difficult to predict and/or outside of Vivid Seats’ control. Therefore, actual results may differ materially from those contemplated by any forward-looking statements. Important factors that could cause or contribute to such differences include, but are not limited to: risks related to the diversion of management’s attention from ongoing business operations due to the transactions; risks related to legal proceedings that may arise as a result of or relating to the transactions; changes to applicable laws or fluctuations in Vivid Seats’ taxable income that could impact its ability to realize the expected benefits of the transactions, including future savings; and other factors discussed in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of Vivid Seats’ most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date of this press release. Except as required by applicable law, Vivid Seats undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Contacts:

Investors
Kate Africk
Kate.Africk@vividseats.com

Media
Julia Young
Julia.Young@vividseats.com

FAQ

What did Vivid Seats (SEAT) announce on October 20, 2025?

Vivid Seats announced a Corporate Simplification Agreement to terminate its TRA for 403,022 Class A shares and to eliminate its dual-class Up-C structure.

How much cash does the TRA termination save Vivid Seats (SEAT) in Q1 2026?

The agreement eliminates a planned $6 million cash payment that would have been due in Q1 2026.

What are the projected lifetime tax savings for Vivid Seats (SEAT) from the TRA termination?

Vivid Seats expects up to $180 million of lifetime savings by retaining 100% of realized tax benefits.

How will Vivid Seats' (SEAT) annual cash tax payments change after the transaction?

The company expects to substantially reduce annual cash tax payments to approximately $3 million, mainly from foreign taxable income.

Will Vivid Seats (SEAT) still have multiple share classes after the transaction?

No. The company will transition to a single class of common stock with approximately 10.7 million Class A shares outstanding.

What annual savings does Vivid Seats (SEAT) expect from simplified reporting after the deal?

Vivid Seats expects about $1 million in annual savings from reduced compliance and financial reporting costs.