Ticketmaster files suit against StubHub
EmptyNASHVILLE -- Ticketmaster, the world's largest ticketing company, has fired a major shot over the bow against online ticket seller StubHub.
Ticketmaster filed a suit Wednesday in Los Angeles Superior Court against Stubhub and its parent eBay, citing intentional interference with Ticketmaster's contractual rights and other charges.
The suit centers around, but is not limited to, the Lynyrd Skynyrd/Hank Williams Jr. "Rowdy Frynds" tour. Stubhub has been offering "official premium tickets" to the Hank/Skynyrd tour, which Ticketmaster claims violates its exclusivity contracts with venues. Ticketmaster alleges these tickets are obtained for sale on the secondary market by threatening that future events might skip Ticketmaster buildings.
"It is clear to us that StubHub knowingly and intentionally interfered with our contracts and is selling tickets to the general public in violation of our contracts, and it had to be addressed," Sean Moriarty, president and CEO of Ticketmaster, tells Billboard.biz.
While both StubHub and Ticketmaster are in the secondary or re-selling game, this suit is more about primary sales. "The issue in this case is these tickets posted on StubHub for a tour were tickets that were made available to the general public, and in these particular instances, we had the exclusive right with our clients," says Moriarty. "It's very obvious to us that they're selling seats in the venue directly to the general public, it doesn't get any more complicated than that."
The StubHub suit comes a day after a series of lawsuits Ticketmaster filed against three secondary ticket brokers and individuals regarding the use of automated "bots" that allegedly buy and resell tickets.
In that action, the following defendants were named in four separate lawsuits: RMG Technologies (dba ticketbrokertools.com); a group of individuals in Texas operating with one common e-mail address and multiple physical addresses; a similar group of indviduals in Massachussetts using the last name of Prior; and Ace Ticket Service, a national online ticket broker based in Illinois.
Bots, or automated software programs, are designed to navigate ticketing systems, including Ticketmaster, with speed and volume far beyond what a typical consumer could manage. Ticketmaster says its fraud prevention team uncovered the activity, identifying in one instance more than 3 million attempts to access Ticketmaster's system from a single IP.
"The timing of these [suits] was absolutely coincidental," says Moriarty. "As part of our consumer protection efforts we have sought fair access, and we're constantly working on the technology to protect the consumer so that when they're looking at tickets on Ticketmaster, they're not crowded out our pushed to the side by brokers operating these automated programs. Over the course of investigating for several months we found some very specific incidents where brokers organized and used this type of automated software [and] were putting the system at risk, certainly to the detriment of consumers."
Ticketmaster says about 117,000 tickets from all sorts of events were discovered by Ticketmaster as being purchased through these systems. In regard to the StubHub suit, Ticketmaster agreements with venues or sports teams generally grant Ticketmaster the right to sell all tickets from the "sellable capacity," i.e., tickets other than season tickets or tickets that are "held back" for whatever reason.
Among the 18 Ticketmaster buildings on the Hank/Skynyrd tour St. Petersburg Times Forum in Tampa, Conseco Fieldhouse in Indianapolis, First Mariner Arena in Baltimore, the Nashville Arena, the Palace at Auburn Hills (Mich.), Target Center in Minneapolis, and Philips Arena in Atlanta.
Stubhub tickets are typically sold via auction, charges sellers 15% of the total winning bid, and buyers 10% of the winning bid, plus a handling fee.
Ticketmaster claims it has notified StubHub in writing about its concerns on several occasions. Ticketmaster claims it has been damaged through deprivation of inventory, visits to its Web site, impairment of its brand, and strained relations with its venue clients. TM believes StubHub's actions were "committed with oppression, fraud and malice, and with intentional and reckless regard of Ticketmaster's rights" under its contracts.
Ticketmaster is seeking general, special and punitive damages, restitution, and a permanent injunction of impact sale or resale of tickets.
"When folks demonstrate the willingness to violate your contractual rights, sometimes you're left with no choice, and this is one of those times," Moriarty says. "The industry is in a time of great change, we care very much about doing the right things by consumers, by our clients and by the industry, and certainly by our business, and we won't stand by and have contractual rights we bargained for fairly and squarely and have paid dearly for, and have those rights trampled on merely because StubHub would like to operate without having to respect those rights. And we're certainly not afraid because it's eBay that now owns them."
StubHub representatives could not immediately be reached for comment.