StubHub Sues Golden State, Alleging Monopoly Over Ticket Reselling

[I'mWithDan]

Do the Cavs make a profit off FlashSeats?

I'm asking because the supposed harm of this policy is that it keeps the price of resale tickets lower. That isn't great for those who want to sell tickets, but it is a huge plus for the public at large who may wish to buy a ticket.

So the Cavs argument against the claim would be that they are not seeking monopoly profits, but rather simply trying to ensure that the public isn't overcharged for resale tickets.

Of course, if FlashSeats is a moneymaker for them, that particular argument wouldn't work.

The Cavs profit GREATLY off of FlashSeats. They charge both sellers and buyers (more heavily) fees for the ticket changing hands.

The Cavs charge the buyer 23% of the purchase price, plus $1.50 a ticket. You then also pay an 8% sales tax on the fees (which is laughable). So if you bought two tickets on FlashSeats listed at $50.00 each, the breakdown would be:

Tickets (2): $100.00
Fees (23%): $23.00
Fees (per tick): $3.00
Tax (8% of fees): $2.08

Total price paid for tickets: $128.08 or an increase of nearly 30% over the listed price.

The Cavs are making a KILLLLLLLING charging people on FlashSeats.

 

[Redzone]

The Cavs profit GREATLY off of FlashSeats. They charge both sellers and buyers (more heavily) fees for the ticket changing hands.

The Cavs charge the buyer 23% of the purchase price, plus $1.50 a ticket. You then also pay an 8% sales tax on the fees (which is laughable). So if you bought two tickets on FlashSeats listed at $50.00 each, the breakdown would be:

Tickets (2): $100.00
Fees (23%): $23.00
Fees (per tick): $3.00
Tax (8% of fees): $2.08

Total price paid for tickets: $128.08 or an increase of nearly 30% over the listed price.

The Cavs are making a KILLLLLLLING charging people on FlashSeats.

Can you also post the seller fees for those who do not know and use your above example and an additional example to show total fees the Cavs are making on each transaction (from both buyer and seller) ?

 

[The Human Q-Tip]

The Cavs profit GREATLY off of FlashSeats. They charge both sellers and buyers (more heavily) fees for the ticket changing hands.

The Cavs charge the buyer 23% of the purchase price, plus $1.50 a ticket. You then also pay an 8% sales tax on the fees (which is laughable). So if you bought two tickets on FlashSeats listed at $50.00 each, the breakdown would be:

Tickets (2): $100.00
Fees (23%): $23.00
Fees (per tick): $3.00
Tax (8% of fees): $2.08

Total price paid for tickets: $128.08 or an increase of nearly 30% over the listed price.

The Cavs are making a KILLLLLLLING charging people on FlashSeats.

FlashSeats is an independent company that services all sorts of teams/venues. So they obviously make a profit. Does we know if any of that goes to the Cavs?

It may be something they do because it minimizes the risk of fraudulent selling, etc.. I honestly don't know. Just asking.

 

[I'mWithDan]

FlashSeats is an independent company that services all sorts of teams/venues. So they obviously make a profit. Does we know if any of that goes to the Cavs?

It may be something they do because it minimizes the risk of fraudulent selling, etc.. I honestly don't know. Just asking.

FlashSeats is owned by Dan Gilbert. He acquired the company in 2007 and it operates in Cleveland, OH.

In terms of "minimizing risk", every reputable ticket broker online guarantees their tickets. Stubhub, Ticketmaster, Ticket City, Seat Geek, etc. That argument will not hold up in court as a reason for solely controlling the re-sale market.

 

[Redzone]

Here's Golden State's response to the lawsuit, per Darren Rovell's tweet. Interesting. I thought they would say something like "Our practice conforms fully within the bounds of the law and we will defend this lawsuit vigorously." Instead, the message appears to be defending why they do it:

"Warriors statement on StubHub suing team & Ticketmaster: "While we do not comment specifically on pending legal matters, we wanted to provide our fans some of the important reasons for our policies. The Warriors are committed to providing fans with the opportunity to see our games in person through a safe and secure ticket buying experience. Dozens of fans are denied entry to Oracle Arena each game because they purchased counterfeit tickets. Warriors.com and NBATickets.com are the only sites where tickets are guaranteed to be authentic. Although some third party sites may offer a "money back" guarantee, none of them can verify ticket authenticity that would guarantee entry to our games. Currently, more than 10,500 fans are waiting for the opportunity to purchase Warriors season tickets. However, each year a significant number of those tickets are purchased by ticket brokers with the sole intent to resell them at a markup. The Warriors recently decided not to renew 2015-16 season tickets held by some ticket brokers, so that we can instead sell those tickets directly to fans on our wait list. This approach reflects our commitment to giving our fans the game experience they deserve.""

 

[I'mWithDan]

They are flatly lying when saying "none of them can verify authenticity"......and if that IS true now, it is a direct result of paper tickets going away.

Notice they didn't reference a reduction in counterfeit purchases they just vaguely stated "dozens of fans are denied entry". So they're using some muddied language to justify why they are explicitly profiting off of the re-sale of secondary market tickets but they're not providing any information that this new system eliminates or even reduces counterfeit purchases. In a court of law, they will need to PROVE this system significantly lowers counterfeit tickets, as that is the ONLY concrete benefit in this whole lawsuit. If they can PROVE it is significantly safer, they may have the policies upheld. If they can't, they have no chance IMO.

The argument that in an open market you're doing something to cater to "true fans" is trying to play the nobility card, which is a flimsy argument. If that is the case, why are you then GOUGING those "true fans" with insanely high ticket fees? For a court to buy this argument, the Warriors would have to prove they aren't then significantly profiting off of controlling the secondary market (which I guarantee they are). They are trying to say they're doing the fans a favor while then, in turn, charging an even higher premium to "guarantee" authenticity. It's a huge conflict of interest based on how they're trying to frame this conversation. If regular people can see that, lawyers will have a field day with it.

 

[Redzone]

The claimed "justifications" are not defenses to antitrust claims; they're Golden State's effort to win a PR battle with its fans, in my humble opinion. Either it's an unlawful monopoly or it's not. This will be watched closely since the very future of sports ticketing/reselling is at issue. If Golden State can do this, look for all sports teams (including the Browns) and entertainment venues (including concerts) to prohibit reselling with third parties. Lots of millions/billions at stake. The fans are just caught up in the middle. I think a settlement is also an option and, if so, then it would be up to another third party reseller or a collection of them to continue the fight. I believe StubHub may have been seeing a trend across the industries (I believe when I order Playhouse Square tickets online it asks me to confirm that I will not resell them, or words to that effect), and StubHub may be trying to end further erosion of its business.