StubHub Sues Ticketmaster Over Alleged Hard-Line Resale Rules

Concert Tickets
Mike Kemp/Getty Images

eBay-owned ticket resale market StubHub has taken action against its principal rival Ticketmaster over the Live Nation-owned giants's rules around resales of Golden State Warriors tickets, which the company claims ventures into anti-competitive behavior. The two companies have been locked in a battle for supremacy over the estimated $5 billion annual resale market for years.

StubHub asserts that ticket-holders to Golden State Warriors games looking to resell are being forced to list those seats through Ticketmaster's resale service TM+, or risk losing those tickets as well as losing their season passes, including entrance to the Warriors' playoff games. As StubHub's complaint, filed in San Francisco's District Court on Mar. 29, reads:

To control and profit from the resale of Warriors tickets ... the Warriors and Ticketmaster have cancelled or threatened to cancel fan ticket subscriptions to Warriors season and post-season tickets if fans choose to resell their Warriors tickets over a Secondary Ticketing Exchange that competes with Ticketmaster’s, such as the one operated by StubHub. In short, [the Warriors and Ticketmaster] have offered a Hobson’s Choice to Warriors fans: use Ticketmaster’s [resale service] exclusively or forfeit your Warriors tickets altogether.

StubHub representative Glenn Lehrman tells Billboard that "What this really is about is tying the primary [market] to the secondary." When asked how tickets are treated with regards to ownership -- essentially, who legally owns a purchased ticket -- Lehrman says that StubHub (unsurprisingly) thinks of tickets as "a piece of property like anything else," not a license granted to a buyer, as Ticketmaster's alleged treatment of the season tickets implies. But even if it were, "there is precedence in antitrust law," says Lehrman.

Ticketmaster responded to the complaint in a statement, saying it "does not force any customer to resell tickets on any particular platform and will vigorously defend these specious charges.”

The complaint deals with issues the two companies have battled over for years. Dating back to 2006, Ticketmaster has lobbied extensively in many states to change laws in ways that would hurt ticket brokers and help Ticketmaster's resale business. StubHub has argued against regulations on ticket resellers and maintains a ticket is considered a piece of property that can be bought, sold and transferred at the buyer's discretion.

StubHub and Ticketmaster spent 2014 (and many previous years) battling each other within each other's services and prices, with StubHub making final pricing clearer earlier in the buying process and reducing its fees significantly. Ticketmaster generates the most profit for Live Nation (bringing in 65.3 percent of operating income but only 26 percent of the company's total revenue), and spent the year pushing its TM+ resale product and pushing its relationships with major sports leagues (like the NBA).

As far as anticompetitive behavior is concerned, an agreement with the Dept. Justice around the time of Live Nation's 2010 acquisition of Ticketmaster from five years ago.

Ticketmaster's response to the suit, in full:

“We are disappointed that StubHub has filed a baseless lawsuit that asks the courts to help prop up its business against true fan-friendly competition. NBA teams like the Golden State Warriors have implemented ticket exchanges powered by Ticketmaster because they want ticket resale to be a secure experience, not an opportunity for scalping and fraud. The exchanges are growing in popularity because Ticketmaster and its partners have worked hard to make ticket resale much safer and more transparent, uniquely serving true fans. Ticketmaster does not force any customer to resell tickets on any particular platform and will vigorously defend these specious charges.”