Source: Groupon’s Mason ‘knew’ he’d be fired

Mar 04, 2013

Dan Primack was a senior editor at Fortune from 2010 to 2016. He was also the author of Term Sheet, Fortune's daily newsletter about deals and dealmakers.

FORTUNE -- Andrew Mason was officially fired as CEO of Groupon (grpn) last Thursday, but it didn't come as a surprise to the 31 year-old.

A source close to the situation says Mason "totally knew" that the board planned to replace him during its quarterly meeting, and that there had been a "continuing dialog" over his future role with the company.

Rumors that Mason would be axed began in earnest last November, when Kara Swisher reported that "several Groupon board members have been seriously discussing making major leadership changes at the Chicago-based daily deals company." That was immediately followed Mason's appearance at a Business Insider conference, in which he commented: "Our stock is down about 80%, it would be weird if the board wasn't discussing whether I'm the right guy to do the job, it's their chief responsibility to ask that question."

It's unclear exactly what changed over the past three months, except that Groupon's board apparently felt that staying the course was no longer an option.

Here's how my source put it: "A CEO today need to be able to deal with the noise, from the media, Wall Street and internally -- for both employee morale and recruiting new employees. Andrew was part of that noise, fairly or unfairly, and sometimes a change is what you need. Remove Andrew, and remove some of the noise."

Or, put another way, Groupon's directors feel that the company's performance has been negatively impacted by the relentless barrage of unflattering attention (in addition to bungling international expansion, etc.). This is something I also heard last summer when speaking with folks in Chicago, and I'm not surprised the sentiment has festered over time.

So fire the head coach, and hope your team goes on a winning streak. Such a strategy has worked before, although rarely when the general manager names himself interim coach (which is what Groupon essentially did, by putting board members Eric Leftkosky and Ted Leonsis in charge).

The real challenge comes in finding a new CEO willing to take over a Chicago company that has become a bit of an Internet punchline. Groupon has not yet hired an outside recruiter, but it expected to do so shortly. Whoever gets tapped, expect him to walk softly...

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