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Software company Spotlight Ticket Management is suing StubHub for intentionally underreporting sales directed to the popular resale platform and failing to pay commissions on millions of dollars it helped bring in.
According to a complaint filed last month in the US District Court in the Central District of California, Spotlight claims StubHub has repeatedly underpaid for commissions it should have received through its business partner American Express. StubHub allegedly failed to rectify the accounting errors after being informed and has jeopardized Spotlight’s partnership with American Express in retaliation, potentially costing Spotlight millions.
California-based Spotlight licenses software to and hosts the online ticketing platform TicketManager used by American Express to offer American Express credit card holders access to ticketed events and experience packages. When American Express users call the card company’s concierge service for help purchasing live event tickets, Spotlight’s software can direct those calls to ticket providers such as StubHub. Through StubHub’s affiliate program, Spotlight should receive commission of at least 5% for those transactions.
Based on its own internal data, Spotlight says it became aware of discrepancies with StubHub payouts in March 2016 and informed the resale giant. StubHub then hired a third-party company, Awin, to help with the tracking of commissionable sales. As compensation for the underreporting, StubHub paid Spotlight more than $500,000 for what the resale site partially owed for commission in 2017.
According to Spotlight, however, Awin continued the misrepresentation of the numbers at StubHub’s direction by failing to track transactions, reporting completed transactions as canceled or deciding not to mark certain Spotlight generated transactions as commissionable without reason.
“StubHub has not endeavored to change its practices or corrected commission payments,” the complaint reads. “Instead, it has undertaken measures to silence Spotlight by harming its business interests to discourage Spotlight from seeking payment of the money it has earned through its work on behalf of StubHub.”
StubHub declined to comment on the active litigation.
The lawsuit, filed by firm Hunton Andrews Kurth LLP, claims that Spotlight’s relationship with the resale platform has resulted in roughly $20 million annually for StubHub for nearly 10 years. Through the affiliate program, Spotlight says it has brought StubHub around $84 million in sales since 2011.
Spotlight alleges it reached out to StubHub again about the inaccurate accounting and was directed to Awin, who in turn asked Spotlight to take up the issue with StubHub.
Lawyers for Spotlight allege that the strained relationship with StubHub has jeopardized its partnership with American Express.
“StubHub has also interfered with Spotlight’s relationship with Amex, attempting to divert all Amex business away from Spotlight, despite Spotlight introducing StubHub as a vendor into Amex’s Ticket Inventory,” the complaint reads.
The complaint suggests that, in the midst of contract renegotiations between Spotlight and American Express, “Spotlight learned that StubHub informed Amex that StubHub claimed it was no longer able to work with Spotlight, leaving Amex the option to either end its long-time relationship with Spotlight or no longer have access to StubHub’s inventory of tickets to fulfill its secondary market card member requests.”
As of the filing of the complaint, Spotlight has yet to resolve its renegotiations with American Express due to StubHub’s incompatibility.
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