Sports Law Blog
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Saturday, December 02, 2006
Patriots Sue StubHub
Just before Thanksgiving, the New England Patriots sued online ticket reseller StubHub.com, a former season ticket holder and former wait list member and other season ticket holders for reselling their tickets online.
The Complaint alleges that StubHub and the sellers interfere with the Patriots' advantageous relations with its fan base, misappropriate the Patriots' name and violate Massachusetts law. The complaint recites in great detail the various aspects of the team's goodwill. Through its season ticket program, the Patriots reward loyal fans by providing access to games at below market rates. Through the team-facilitated TeamExchange ticket exchange, the team provides season ticket holders and wait list members the ability to purchase tickets at face value plus a transaction cost, from season ticket holders who cannot attend certain games. This also benefits the selling season ticket holders by providing them a way to legally recoup the cost of tickets for games they can't attend.
The team argues that StubHub's online resale activities tarnish its goodwill. By controlling access to the stadium, the team provides a secure, fan-friendly experience. The team voids the season tickets of those who behave in an unacceptable manner. It appears from the complaint that many of those with voided season tickets have resold their voided tickets on StubHub. StubHub buyers then show up at the stadium and are denied access. When irate unknowing buyers are denied entry at the stadium, the team's goodwill is compromised and its resources are expended by having to deal with the defrauded buyers.
Lastly and most obviously, StubHub and the resellers who use its service violate Massachusetts law, which prohibits the resale of tickets by anyone who is not licensed and limits resale price to two dollars above face value plus a transaction cost. The exorbitant pure market prices on StubHub far exceed legal limits. It also represents a source of revenue based directly on the Patriots product, yet the Patriots have no share in it.
The suit seeks money damages and injunctive relief. It will be interesting to see how StubHub and the individual defendants respond. While the Patriots' arguments are strong, there are more violators to be dealt with than StubHub. This may be the first move by the typically aggressive franchise.
The complaint itself is accessible for those with access to the Massachusetts Superior Court's website www.ma-trialcourts.org. It is docket number 06-4874 BLS. For those interested, I can email a pdf of the complaint.
My prediction about further action proved true. Sunday's Boston Globe business section features a story about the Patriots rescinding 38 season tickets held by former player Fred Smerlas, who along with radio personality Glen Ordway run www.Patriotstailgate.com, a business featuring access to pre-game tailgates and game tickets. Although Smerlas claims that the tickets are sold at face value within the packages he sells, the team has revoked his tickets for violation of "team policy."