Chris Tsakalakis' sudden departure as president of StubHub, the world's largest secondary ticket marketplace, comes as executives from parent company eBay depart that company and the move was not totally unexpected, Billboard has learned.
News came Tuesday (Nov. 4) that Tsakalakis would "step down immediately" as president, according to a statement. The move is likely at least partially related to eBay's planned split from PayPal into two separately traded companies in 2015, which will include the exit of eBay president/CEO John Donahoe and his entire executive team once the split takes effect. eBay will be led by eBay marketplaces president Devin Wenig. Tsakalakis reported directly to Wenig.
StubHub's North America lead Noah Goldberg and CFO Ajay Gopal will serve as the interim co-leads for the business, and an executive search to replace Tsakalakis is already under way. One StubHub insider speculated that Tsakalakis feels he's "done it all at StubHub and it was time for a new challenge." StubHub changed the secondary marketplace forever when it launched in 2000, and during Tsakalakis' tenure, StubHub became the largest secondary marketplace in the world. While the secondary market players were once known widely as "scalpers" (and still are to a large degree), Tsakalakis steered the company into deeper integration with the primary market, including partnerships with such company partners as the San Francisco Giants and University of Texas, along with more than 60 teams in the MLB, NBA, NHL, MLS, NCAA and Barclays Premiere League, complemented by companies such as ESPN, AEG, Tickets.com and Paciolan.
But StubHub's rapid growth in scale has led to a vastly different company from the one Tsakalakis stepped into. eBay acquired StubHub in 2007 for $310 million. Outside of some best practices and resources combined toward projects like mobile development, eBay largely left StubHub to operate independently. But Tsakalakis was more of a disrupter of the industry, and as this startup became more integrated into the overall sports and entertainment business -- and therefore more corporate -- it was less suited to his skill set. StubHub has approximately 50 percent of the $5 billion U.S. resale market, according to Northcoast Research.
"If StubHub is going to continue to be as profitable as it has been in the past," says one insider, "there is going to be a need for new business models, new revenue streams, and somebody from the outside needs to come in and help us." It is believed that StubHub will possibly go outside the ticketing industry in its search for an executive more externally facing, with more relationships within the music and sports industry. That's not unlike eBay hiring Dan Schulman, former president of the Enterprise Growth Group at American Express, to run PayPal.
Though it commands 50 percent of the secondary market, StubHub is facing its toughest competition yet with the launch of Ticketmaster Plus a year ago, but a source at StubHub says October was the most successful month in the history of the company and revenues are up year-over-year. The company has introduced some changes in an effort to maintain its lead in the secondary market. Early this year, the company shifted to "all in" pricing and reduced sellers' fees, with ticket prices dropping 6 percent as of September as a result. Music is about 40 percent of StubHub's business, with sports representing the other 60 percent.