PATS SUE STUBHUB

Zero2Cool · Nov 23, 2006

In a stunning move that could do more harm to the NFL than good, the New England Patriots have sued online ticket reseller StubHub for encouraging violation of the Massachusetts antiscalping laws.

The landmark suit also names 52 individuals who re-sold Patriots tickets via the StubHub service, and the Patriots seek as damages three times the revenue StubHub and the other defendants earned through the online sales of tickets to New England games, along with an injunction against further resale of Patriots tickets by StubHub.

The problem is that more than a few NFL teams currently are in bed with companies like StubHub, engaging in "partnerships" that indirectly funnel money realized via ticket scalping to owners. A high-level executive with one team defended the practice in a conversation with us several months ago, explaining that for fans of modest income the ability of a season-ticket holder to sell seats at a markup to one game per year makes the total package of tickets affordable -- and it helps other fans willing and able to pay fair market value obtain access to NFL games.

The practical consequence of the Patriots' lawsuit could be the disruption (if not the evaporation) of these partnerships, since the league will likely be forced to conjure a consistent policy for all teams as to whether business arrangements with scalpers in cubicles is desirable or permitted. The media also might begin to probe these transactions more carefully for evidence of abuse.

In September, for example, it was discovered that Cowboys-Eagles standing-room-only tickets were available on RazorGator.com, the Eagles' online ticket reselling partner, even though the tickets had not been made available for sale to the public. The initial suspicion was that the team was funneling tickets on a preferential basis to RazorGator. In the end, the fact was that RazorGator was selling seats that it had not yet acquired, prompting a cease-and-desist demand from the team.

But the mere fact that NFL teams do business with companies that are scalping tickets by high-tech means (and, as in the RazorGator case, allegedly taking improper liberties) should be a cause for alarm.

To date, the warning signs have been ignored. With the Patriots on the offensive against one of the leaders in the field, it'll be impossible (in our view) for the relationships between other teams and online scalpers to continue to escape scrutiny.

And there's another problem here that the team's legal action could inadvertently be exposing.

"What's the saying about people in glass houses?" said a league source regarding the lawsuit. "Do the owners really want people poking around about the re-sale of Super Bowl tickets? It might give exposure to something that most owners don't want seen."

Reports recently surfaced regarding a federal grand jury in Ohio, which is believed to be exploring the handling of Super Bowl tickets by members of the Browns organization. And one of the league's dirty little secrets, as we understand it, is that some owners realize huge windfalls through the sale of "packages" that include the most coveted of all sports tickets.

In the end, the lid could soon be blown off of these practices, due in large part by the efforts of one team to prevent third parties from doing the very same thing that NFL types have been doing with Super Bowl tickets for years.

If PF.com didn't have their logo in the upper left I wouldn't have even an idea of who StubHub was!

PATS SUE STUBHUB

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PATS SUE STUBHUB

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