New England Patriots wrestling StubHub over ticket sales

by Josh @ Pats Pulpit on Jul 11, 2007 6:04 PM EDT

StubHub Gets Go-Ahead
Ticket Reseller's Counter-Suit OK'd by Judge

A Superior Court judge ruled in favor of ticketing Goliath Stubhub on July 7 in their counter-suit against the Patriots, which will allow the company to proceed with the case against the team.

The New England Patriots, in an effort to curb scalping, brought a suit against Stubhub in November 2006 seeking damages and an injunction. The Patriots are asking for three times the revenue brought in by the online sales. In addition, they are seeking an injunction to block any further reselling of Patriots tickets on the ticketing company's website.

This month, the counter-suit filed by Stubhub last December was green-lighted, permitting the company to proceed with claims that the Patriots are monopolizing the ticket resale business. This claim is mostly supported by the fact that the Patriots prohibit any sort of ticket resale outside of the club's own TeamExchange website.

The Patriots argue that Stubhub, and the 52 season ticket holders also named as defendants in the suit, are curtailing Massachusetts's antiscalping law. This law requires that resellers be licensed by the state and that tickets being resold remain within $2 above face value. The licensed resellers, however, can charge certain business or service charges on top of that.

While scalping is currently illegal, it is an extremely lucrative business. Thus, many professional sports teams are finding that they want a piece of the action. As many states are dumping their scalping laws, more teams are signing contracts with ticket resale companies, like Stubhub and Tickets.com, so that season ticket holders can legally resell their tickets.

What this suit means for fans is yet to be clearly defined. With scalping playing such a large role in ticket distribution, it would appear that prohibiting ticket resales could limit the number of opportunities for fans. Even though some seats can be resold for over three times the face value, many fans around the country still turn to ticket resale sites as an opportunity to see their favorite sports teams live.

In the counter-suit, Stubhub alleges that, "if anyone has violated the state statute on ticket resale, it is the Patriots themselves." The company has also noted that Stubhub has reached agreements or is negotiating contracts with other NFL teams to provide a place for fans to resell tickets.

Stubhub also released a statement at the time of the Patriots suit defending their right to do business. In their user agreement, the company clearly states that users of the site must adhere to their local and state reselling laws. This type of disclaimer has come to the aid of a few online companies in the past, namely YouTube and Google when they were sued for hosting copyrighted material on their site.

No further dates or actions have been identified at this time. With permission to proceed with its suit, both Stubhub and the Patriots will likely prepare their arguments for the next step in the process.

The Patriots made no comments about the judge's decision to permit the counter-suit.

The views expressed in these FanPosts are not necessarily those of the writers or SBNation.

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Set Ticket Prices

I've wondered why some teams haven't gone to varying ticket prices for different games. The biggest driving force behind scalping is the disparity in demand for different games. Most teams can't give away pre-season games, but make only a fraction of potential revenue for high-demand games (like a Pats-Colts game.) In addition to optimizing ticket revenue, it might also increase attendance (for those teams that don't sell-out,) which would also increase concession and parking revenue. IMO, it would increase fan loyalty as it would give lower-income fans a better chance of actually going to a game, even if it is a less desirable one. If teams really wanted to eliminate scalpers they should institute a bidding process on-line, but I won't get my hopes up.

by 6thround on Jul 11, 2007 8:30 PM EDT reply actions

Great in a perfect world

Great idea, just not practical.

Look at the varying ticket prices from a fan's perspective. When I'm getting ready attempt to buy tickets during the general sale on Ticketmaster, I'm looking at particular games, maybe even particular seats. If I need to look at varying prices for eight different games, I'm going to need to spend hours trying to figure out what I can afford; what I really want to pay to see certain teams; and if I get this game, what does that mean to the other games I wanted; or if I don't get that one, then maybe I can afford these other ones.

Tickets for different seats and for standing room are already different. You'd need a matrix just to keep track.

At the moment, the Patriots have little problem selling out every game. Perhaps the varied prices are good for some place like Arizona, where they sometimes have $10 tickets just to get people to the games. (I remember they did some promotion out there. Maybe it was a free ticket with a Coke or something.) But there's no reason to do this in Foxboro.

Ultimately, you're simply not going to make everyone happy. Ticketmaster tweaks the system every year trying to make it "more fair." Every year, the scalpers and ticket warehouses find some way to rip off fans more. The Krafts are already making plenty of money, so we don't need to give them any suggestions to raise prices for some games, when they can sell out the .. well, lousy .. games at the current prices. (Don't forget what it costs to park, and heaven forbid you decide to patronize the concessions.)

This stuff has kept me up some nights. I'd like to see the resellers go away completely, but I don't think that will ever happen. It's a catch 22 pretty much no matter how you look at it. Someone is always going to be ripping off someone else.

It was a valiant effort to come up with a suggestion. Keep working on it.

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by tommasse on Jul 12, 2007 9:30 PM EDT up reply actions

Good point

I think that varying the ticket prices among the games would be a good idea, but I also think it would be extremely difficult to calculate which games will be worth the big bucks beyond the obvious ones like heated rivalries. It would be just like a random greedy NFL owner to get pissed when they dropped ticket prices to 2-3 games that ended up being huge-impact games. They would have issues determining when to set the price. Selling tickets to week 16 before the season starts would be disastrous because they don't know if that game will mean nothing or if it will mean a playoff spot.

Removing scalping starts with removing greed. There's no way you can do that. If fans aren't making big dollars scalping then the team is making big money scalping. What's the definition of scalping? I think broadly it's overcharging unfairly and intentionally in order to turn a larger profit; extortion or exploitation of another person's desires or needs. Wouldn't you think it's arguable to say that if the Pats charged three times as much for seats to the Colts game that's just as unethical?

Anyway, that's all my opinion too. I like the idea of varying ticket prices, I just fear that the owners or powers in charge wouldn't budge much to actually give benefits to fans.

Josh

by Josh @ Pats Pulpit on Jul 12, 2007 9:11 PM EDT reply actions

In response to lzldmb

For clarity's sake, I will define "scalping" as the selling of tickets by a 2nd party at a higher price than what the Patriots originally charged. There are plenty of other nuances, but for the purposes of debate, that is the definition I will use. Feel free to update it if I fail to address any particular issue. I do agree that it will be hard to set a price up-front (i.e. in March and April,) that will match market value. As lzldmb points out, market value will change through the season. What is a good game could become moot, and what is a less than desirable one in August, could become a playoff clincher in December. Mine is not a perfect solution, but rather an attempt to lessen the effects of the rampant scalping that has the Patriots so worried that they are willing to risk bad publicity by going after Stubhub.There are certain ways to alleviate some of your concerns though, and taking into account the public's acceptance of ticket-selling innovations over the last ten-plus years, I think they can be implemented fairly easily. tommasse, re: a fan's need to have a ticket price matrix: part of the purpose of having varying prices is to level demand for each game, and in fact to reduce the scramble for tickets that happens whenever they go on sale. To some extent, fans will self-select what games they can afford, and only look to buy those games in particular. They woudn't need a matrix of every game, rather they would most likely decide upfront which games on which to focus. In terms of different prices for every seat, I think most fans already set a budget, and then decide how many games to purchase (and then the race is on for which games to try for,) so the decision of what seats for what games can be decided upfront as well. I realize that this is a major change in the way that fans approach ticket purchasing, but I think that it actually improves the experience. If you can decide upfront what seats for what games you can afford, and then have to face less of a competition to get those seats, isn't that better than the current time-consuming/constrained speed-dialing competition? lzldmb, re: changing demand over the season duration, I think teams can hold back some tickets from the pre-season sale, and update the price, or hold an on-line auction, as each game day nears. In effect, the Patriots become the scalpers. Granted, fans that purchased bargain seats in the beginning of the year may want to make a profit later, but if they can sell/auction the seats through the Patriots (and share in the profits somehow,) then isn't that a benefit to both sides? This would still leave an opening for scalpers to speculate on the market of tickets during pre-season sales, but I think the risk of losing money would limit that issue. If I may add one other point, I think holding back tickets for an in-season, updated sale-price/auction, would help improve the pressure on teams to compete all season long. This is less of an issue in the NFL than say the NBA, but every little bit helps.

by 6thround on Jul 13, 2007 8:43 PM EDT reply actions

Again, in a perfect world

Like I said, currently, the Patriots are selling out every game in very short order. There's no way they're going to lower ticket prices for the "less desirable" games, so there's only one way to go.

We paid $49 (plus fees -- make it close to $60) for standing room only tickets. We don't even get seats, and all views are partially obstructed or very far from the field. Seats are $59, $75, $89 and $125.

What do you propose the Krafts charge for "high demand" games, and how can "real fans" afford to attend them? Once again, don't forget the $35 parking. And then there's concessions.

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by tommasse on Jul 13, 2007 9:59 PM EDT up reply actions

Capitalism

You're right, the Pats would only increase revenue from varying ticket prices. In their team's particular case, prices would only go up, perhaps even for the least desirable games. But by making fans pay the most that they are willing to for each game/seat, the process of purchasing tickets would most likely be smoother. In my experience (including being on the waiting list for season tickets since 2000, when they we're going to move to Hartford,) more fans are left wanting for tickets than those that get through to a ticketmaster operator. Right now, ticket prices are set to sell out the least desirable games (or thus they wouldn't be sold out.) Perhaps I'm jaded at having not gotten through the telephone lines when I tried, but the fact is that the only way that I could get tickets now is through Stubhub or another scalper. I would be willing to pay more than current face value for tickets. I'm not going to because I hate scalpers as much as you. I think that there were as many, if not more, scalpers on the phone than real fans when I tried to call. I think you and I just disagree about the method that we are willing to use to get tickets. For me, it makes more sense to pay more, and spend the saved-time at my day job, to get tickets. For you (and please correct me if I'm wrong,) it is easier to spend hours speed-dialing at every opportunity to get face-value. That having been said, there probably is not an equitable way for Pats fans to get tickets to the games they wish. At best right now it is a crap-shoot. My idea only increases the odds that an individual Pats fan gets tickets at a price they are willing to pay, but nothing beyond that. I do think that across the league though that my plan does increase the pressure for competition, access for more fans, and eventually increased fan interest.

by 6thround on Jul 13, 2007 11:26 PM EDT up reply actions

Interesting points, but there must be a better way

Fortunately, I use Ticketmaster's website, not their call-in service, and tickets are usually sold out or I have purchased my quota in very short order. So I don't spend more than an hour in the process, and that includes my "prep" time.

In 2006, we were shut out for regular season tickets but seemingly easily snagged Wild Card tickets. This year, again, went flawlessly and we were able to get tickets to four games.

There is no question that the system isn't perfect. Heck, it's far from great, and is barely good. The system is designed to get the most tickets to the fans without allowing the ticket agencies get there hands on too many and reselling them at extravagant prices to fans who should have been able to buy them at face value. And they (Ticketmaster at least, and they probably work with the Patriots and other 'promoters') tweak the system a little bit every year.

There are two problems: First, the Patriots have a lot of season ticket holders. (The stadium has a capacity of 68,756, but I don't know of that includes SRO. Rumor has it that close to 60,000 seats are season tickets. I will try to verify.) That leaves very few tickets available for the rest of us.

Second, there are very few ways to make so few tickets available to so many. I don't think a varied pricing schedule alleviates that problem. That only makes the current process more complicated. Ticketmaster, while imperfect is currently the best method to accomplish this goal.

I don't think the Patriots (i.e. The Krafts) are looking to maximize profits. Clearly, they could charge a lot more for tickets. I think there is an honest effort to get as many tickets as possible directly to the fans.

Look at the bright side: It's hard to get tickets, because the Patriots, right now, are that good.

Now, there are a couple "alternatives" while we don't have any good "solutions" at the moment.

First, go to Buffalo or Miami for a game.

Dolphins tickets appear to go on sale next Saturday (July 21).

There are still tickets available for the Patriots in Buffalo. Not the greatest seats, but I attempted to get as many as 4, and they're there. And they're significantly less expensive than Gillette. (Family Section were unavailable, but they start at $38. The Bills most expensive tickets are $70. Imagine that pricing structure at Gillette. Actually, there's a small-market reality, but I digress.)

Tickets for the Jets and Giants in the Meadownlands are probably hard to come by (I didn't check), and you might also want to check for tickets in Baltimore, Cincinnati, Dallas and (cough, cough) Indianapolis. It seems unlikely there will be many tickets available in some of those stadiums though.

Second, go to a (cough, cough) preseason game. There are still tickets (seats and SRO) available for both the Titans and Giants games. There's even some very good tickets for Tennessee; and good for the Giants if you only want 2, not so good if you want 4. Of course, they're regular-season prices. (Now there you have a point. Those tickets should be half-price or less.

You want a solution? Here's one: Build another stadium. Install 100,000 seats. At this very moment, you'll probably still sell out. But here's where maximizing profits comes in: What happens when the dynasty is over? It really stinks to own a stadium (and maintain it) that has 50,000 empty seats every week. (I don't know from experience. I'm just assuming.)

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by tommasse on Jul 14, 2007 10:45 AM EDT up reply actions