Good morning. Ticket resellers have long turned to StubHub to hawk their wares, selling seats to concerts and sports games, often at significant markups. But what happens when the CEO of a platform for ticket resellers turns out to be one himself? Even as Stubhub faces class action lawsuits and investigations over selling World Cup tickets that didn’t exist, its founder Eric Baker is facing scrutiny for his ties to a fund that resells millions of dollars of tickets on the site—and finances other resellers to do the same.
Here’s the issue: In its prospectus to go public last fall, Stubhub noted that one million sellers offloaded 40 million tickets in 2024. The S-1 filing also revealed that Baker is managing director of Andro Capital, a fund that buys tickets in bulk and resells them on the platform. StubHub also pays hefty fees to Andro to help sell and service inventory and refers other resellers to an affiliate of the fund that offers financing for bulk ticket sales. A CBC investigation put a spotlight on the filings amid the uproar over StubHub canceling hundreds, if not thousands, of World Cup tickets. (StubHub has not disclosed the total number.)
On Friday, Rep. Robert Garcia (D-Calif.), ranking member of the Committee on Oversight and Government Reform, demanded answers from Baker, sending him a sharply worded letter asking about his “secret hedge fund” and related businesses. The question, Garcia wrote, is “whether you have manipulated markets for your own benefit, while Americans are left paying higher costs in an unfair system.” (StubHub didn’t respond to my request for comment this weekend but it’s long maintained that it does not own, possess or sell tickets, functioning simply as a marketplace that makes money off transaction fees.)
There’s a long tradition of CEOs expanding into adjacent businesses that let them capture more of the money flowing through their systems. Baker’s role in reselling tickets was, after all, disclosed prior to the IPO. But this is a site that’s been fined for deceptive pricing and is not beloved by those who use it, with low customer net-promoter scores. Resale sites like StubHub solve a problem that they arguably helped to create, giving scalpers an easy way to profit off scooping up tickets that others want to buy. StubHub is about to become a real-time test of how far a CEO can personally benefit from a business before regulators, Congress, and customers decide it’s crossed into self-dealing.
Contact CEO Daily via Diane Brady at [email protected]
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CEO Daily is curated and edited by Joseph Abrams, Jason Ma, Claire Zillman, and Lee Clifford.
