Leadership / 10.23.18
Legal Update: Super Bowl Ticketing Policies Examined, Ticketmaster Sued, FTC to Hold Ticketing Workshop
Teddy Durgin
The live event ticketing industry has had its days in court lately. From Super Bowl ticketing policies being put under the microscope in New Jersey to Ticketmaster being sued for allegedly facilitating the sale of tickets to the secondary market, there has been a lot for legal minds to ponder. Here is the latest.
NFL Defends Lawsuit Alleging Super Bowl Ticketing Violations
In late September, the National Football League (NFL) was on the defensive as New Jersey's Supreme Court heard arguments over a lawsuit related to ticket availability for the 2014 Super Bowl, which was held at MetLife Stadium in East Rutherford. The Associated Press reports that football fan Josh Finkelman sued the league, charging that the NFL's practice of releasing roughly 1 percent of available tickets at face value via a lottery — with the rest going to teams, sponsors and others insiders — violated state law. At the time of the game between the Seattle Seahawks and the Denver Broncos, New Jersey had a law on the books (since repealed without public hearing) that required 95 percent of tickets be made available to the public.
Lawyers for the NFL contended that the lack of a public sale "is in harmony" with the league's ticketing policy each, and every, year for the Super Bowl, adding that the state officials responsible for pursuing the NFL to have the championship game at MetLife Stadium were aware of that in advance. Since its initial filing, Ticket News notes that the lawsuit was twice dismissed by a federal judge sitting in New Jersey. However, the 3rd U.S. Circuit of Appeals in Philadelphia ruled in late 2017 that the case could go forward pending the state Supreme Court's ruling. The lawsuit could bring millions of dollars in damages to the NFL pending the decision.
Ticketmaster Sued for Allegedly Encouraging Scalpers
Ticketmaster and Live Nation, its parent company, have been hit with a class-action lawsuit for allegedly facilitating the scalping of live event tickets. According to the lawsuit filed earlier this month in California federal court, Ticketmaster actively encourages scalpers to resell event tickets on its site through TradeDesk, a member-only program, because it collects a fee on both the initial sale and resale. In addition to the lawsuit, Digital Music News notes that two U.S. senators — Richard Blumenthal (D-Conn.) and Jerry Morgan (R-Kan.) — have penned a letter to Live Nation CEO Michael Rapino demanding answers.
In the lawsuit filed by the law firm of Hagens Berman, the attorneys charge that Ticketmaster's system allows for scalpers to purchase large quantities of tickets to live events. To be sure, the buying and selling of tickets on the secondary market is perfectly legal, Fortune concedes. But, when it is done in mass quantities, alleges the lawsuit, it runs afoul of Ticketmaster's policies. The scheme was discovered by undercover journalists from Canada's CBC and the Toronto Star, who attended a live entertainment convention in Nevada posing as scalpers.
Then, in late September, Sotos Class Actions filed a lawsuit seeking C$250 million in damages on behalf of all individuals who bought resold tickets from Ticketmaster Canada Holdings ULC for live concerts, games and other events occurring in Canada beginning on Sept. 1, 2013.
Ticketmaster has policies in place that claim to prohibit mass ticket buys by resellers via electronic and other means. A recent joint investigation by the CBC and the Toronto Star, though, has reportedly uncovered proof that Ticketmaster does encourage such activity by resellers. Not only that, but it has also developed TradeDesk, an electronic point of sale platform specifically for assisting resellers in listing tickets for sale en masse. Attorney Louis Sokolov, lead counsel for the class action, said, "The media investigation has provided strong evidence of what many ticket buyers have long suspected – the market is rigged in favor of resellers and against consumers. . . The aim of this lawsuit is to stop those practices and return the money to Canadian ticket buyers."
FTC to Hold Workshop Examining Online Event Ticket Sales
The Federal Trade Commission (FTC) recently announced that its staff will examine consumer protection issues related to the online event-ticket marketplace at a public workshop scheduled for March 27, 2019. FTC officials are inviting public comment in advance of the workshop on an industry that's been a frequent topic of consumer complaints. The workshop will bring together an array of stakeholders to discuss problematic practices in the online event ticket marketplace, ranging from industry representatives and consumer advocates to trade associations and government officials. Organizers of the workshop hope it will shed light on industry-wide advertising and pricing issues and come up with new ways to address deception beyond traditional law enforcement.
Billboard, meanwhile, is reporting that Ticketmaster is eager to take part in the workshop. The company wrote in a recent media release: "We encourage other ticketing companies to take part in educating consumers and lawmakers on the opportunities and challenges in the ticketing industry and to join us in further action to improve the consumer ticket buying experience." Specifically, Ticketmaster advocates stepped-up enforcement of the BOTS Act, as well as the elimination of speculative ticket sales and new restrictions on deceptive marketing and misleading ticketing URLs.
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Tags: Sports , Ticketmaster , Reselling , Regulations , Secondary Ticketing , NFL