Fifteen years after Eric Baker was fired from StubHub, the ticketing giant he cofounded, he bought it back for $4 billion—weeks before coronavirus utterly wrecked the business. Revenge isn’t always sweet.t’s Thanksgiving Eve 2019, and Eric Baker is already celebrating. “There has never been a better time to be in live events,” he says giddily, knowing that he’s positioned to profit from pretty much all of them. Two days earlier, Baker had announced the biggest deal of his life.
Success is nearly always a matter of some luck and good timing. In this case, Baker—who declined repeated requests for a follow-up interview —had neither. It’s rare that you can judge a deal within months of completion, but the verdict on this one is absolute: Baker’s purchase of StubHub will go down as one of the worst deals in history, closed just days before the pandemic eviscerated the live-events business that, with regard to ticket reselling, he had so gleefully cornered.
It was during his time at Bain, according to Baker, that he first hatched the idea for an online ticket marketplace. His girlfriend wanted to seeon Broadway, but tickets were scarce, requiring him to look on the secondary market. “‘How do you do it?’” he remembers thinking. “‘Do I go on a street corner?’ I’d have to look online and find a ticket broker and pay through the nose. It wasn’t a lot of fun.
From there, the founders’ paths diverged for the first time. Fluhr dropped out of school to work on the business with a small team, including Jeff Lawson, who is now the billionaire founder of Twilio. It was risky: The dot-com bubble had just burst. “We were sort of swimming against the current,” Fluhr says.
Baker thought about traveling the world for a year. Then he had a better idea. When he left StubHub, the company had never asked him to sign a noncompete agreement. “I think the thought process was, well, ‘Gosh, Eric is the second-largest shareholder; he’s not going to compete,’” Baker recalls. That was wrong. Barely a month after getting let go, while planning the first leg of his trip, to London, Baker realized his former colleagues were years away from expanding into Europe.
He went ahead with the deal, funding it with debt as well as more money from his top two investors: the VC firm Bessemer Venture Partners and Madrone Capital Partners, a private investment firm affiliated with the Walton family, of Walmart. As Baker calmly noted on CNBC just after the acquisition, “Right now, [the virus] has been isolated to Asia.”
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