The top Democrat on the House Oversight Committee is demanding answers after media investigations revealed that StubHub CEO Eric Baker is part owner and managing director of a hedge fund which has made millions of dollars scalping tickets on the platform.
Congressman Robert Garcia (CA-42) cited reports from the CBC that showed that in addition to his role as StubHub CEO, Eric Baker is also part owner of an entity called Andro Capital. In keeping with our late stage capitalistic aesthetic, Andro Capital is actually a hedge fund that snaps up tickets and sells them on platforms including StubHub.
“Reports that StubHub’s CEO may have profited from a ticket brokerage while running one of the nation’s largest ticket marketplaces are deeply troubling,” Garcia said. “If true, this is a blatant conflict of interest that raises serious questions about whether consumers were treated fairly.”
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There is no doubt about Baker’s role at both companies. After StubHub filed for a stock IPO last fall, the company was compelled to file reports with the SEC on “related party transactions.” There the company revealed that “Andro Capital (‘Andro’) is a seller on the Company’s platform and, in the normal course of business, has engaged the Company to list, price and fulfill its tickets on its behalf. The Company’s CEO” — who is Baker — “has an ownership stake in both the Company and Andro.”
There was renewed interest in Baker’s dual role following a report by the CBC in July which made it sound very much like being CEO of StubHub is merely Baker’s side hustle to mass buying and selling tickets on StubHub via Andro. “StubHub and its CEO are in the business of mass scalping,” the CBC’s Dave Seglins wrote.
Congressional interest in the StubHub CEO’s unusual arrangement is just the latest fallout from the CBC report. On July 13, a $5 million proposed class action lawsuit was filed on behalf of ticket buyers who believed StubHub was (as their tagline has it) “the leading marketplace for fans to buy and sell tickets.”
The SEC filing by StubHub also revealed a complicated and bizarre financing arrangement between StubHub and Colloquy Capital, which the document itself identifies as “an affiliate of Andro.” The agreement involves StubHub referring “certain cellers to Colloquy” to provide “short-term financing” based on future and potential returns. And in keeping with the theme, Colloquy also has their own agreement to sell tickets owned by Colloquy on StubHub.
“Reports suggest that you have financed and profited from the very scalpers that are locking fans out of affordable ticket sales in the first place, and that you are further ripping off consumers and smaller sellers by giving yourself preferential treatment on the StubHub platform,” Garcia wrote.
“Oversight Democrats are investigating whether you have manipulated markets for your own benefit, while Americans are left paying higher costs in an unfair system.”
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