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StubHub (and the average fan) Defeated in Court
The New England Patriots are an undefeated 7-0 on the field and 1-0 so far off the field. The team sued online ticket seller StubHub.com last year, alleging that StubHub encouraged fans to sell tickets on the site at inflated prices, which is against team policy. StubHub lost the case and complied with a judge’s order to turn over information on more than 13,000 users who bought or sold Patriots’ home game tickets. Illegality aside, both the Patriots and StubHub have huge customer bases, and this battle could have adverse effects on loyalty for both parties involved.
The Patriots have no problem selling out season tickets (the club has thousands of people on a waiting list) but the story is damaging PR for them, especially considering the scandal over Bill Belichick taping the New York Jets’ defensive signals earlier this season. Patriots ticket holders who sold on StubHub face revocation of their license, since the team forbids reselling for more than $2 over the ticket’s face value. What they don’t say in their press release is that the only online seller that regulates users and prevents them from overcharging for tickets is their own site, which StubHub alleges is monopolistic.
As for StubHub, it stands to lose revenue because handing over users’ information to the Patriots violated its confidentiality agreement with its customers. Worse, the judge didn’t place any restrictions on the Patriots, who can use the information for anything from punishing sellers to marketing to buyers. The Patriots aren’t the only team that wants to regulate reselling of its tickets, and many teams have similar pricing policies (although they’re rarely enforced online, if ever). If this case serves as a precedent and StubHub is hit with more lawsuits, its credibility will disappear and it could signal its end.
There’s a fine line between encouraging others to break the law and offering a service that could be utilized by law-breakers. File sharing sites like Napster and Kazaa had many legitimate uses, but they lost in court because most of their users were breaking the law with the help of their software. Ticket resellers could face a similar fate, and teams like the Patriots will enjoy the exclusive distribution power that music labels now enjoy.
The question is, will the consumers win? When big corporations fight, you and I rarely come out better off. As with file-sharing, when the rich media companies got richer, now it seems the rich sports franchises will line even deeper pockets. As a Patriots fan I hope that doing away with ticket brokers charging 10 times the value of an upper deck seat will mean I can afford to see a game in person. But I think it’s more likely that the Patriots will kick the brokers out, sell more season tickets to the people on the waiting list (with a hefty licensing fee), and I’ll still be watching the game on TV at home.
Tickets will still be bought and sold, so the Patriots have not accomplished anything. Consumers will still link up with other consumers to trade tickets -- or music.
What's next?? Are they going to sue newspapers for carrying "tickets for sale" ads? Or sue Craig's list for linking buyers and sellers? Very stupid move on the part of the Pats.