StubHub has recently filed suit against Ticketmaster and the front office of the Golden State Warriors for engaging in unfair business practices in ticket resales.

Even without this recent complaint, the Warriors have been the talk of the NBA. Starting point guard Stephen Curry is a potential MVP candidate, the team has clinched the playoffs as a one-seed, and currently leads the NBA with an outstanding record of 60 Wins and 13 Losses: 34 Wins and just 2 Losses at home.

What is even more intriguing is that the Warriors are forcing season ticket holders to sell their tickets strictly through (Ticketmaster’s) NBATickets.com…any other resale exchange may strip the holders of their season subscriptions.

“Splash Brothers” & Co. Dominate The Bay Area

The Golden State Warriors are just the start of a new dynasty on the rise. The Warriors are led by an electrifying backcourt of Stephen Curry and Klay Thompson, commonly known as the “Splash Brothers,” and a new coach, ex-NBA legend Steve Kerr.

More notably, one of the many hypes of Oracle Arena in Oakland, CA, is the thrilling performance by the team on a consistent basis. The Warriors rank first in Points/Game 109.8, Field Goal Percentage(%), and 3-Point Percentage(%).

Moreover, when looking the progression of the team’s record throughout the years (’11-’12: 23-43,  ’12-’13: 47-35,  ’13-’14: 51-31,  ’14-’15: 60-13), the Warriors are only getting better; and we may not know how high demands will be for season tickets next year.

According to Statista, the attendance of regular season home attendance (fee-based) in ’11-’12 to ’13-’14 has shot from a total of 622,311 (averaging 18,947) to 803,436 people (averaging 19,596), respectively. According to ESPN, the Warriors are still averaging the 100% sellout rate of 19,596 at Oracle Arena this year.

With demand at an all time high, it seems as if the Warriors and Ticketmaster have connived an anticompetitive campaign to cater to their interests.

Why is this Monopolistic?

StubHub contends in its complaint, as a result of Ticketmaster and Warriors’ collaboration of unlawful business practices, the market of Secondary Ticket Exchange services, like StubHub, has taken a substantial hit.

Additionally, there has been notable foreclosure in the market and harm to consumers, competition, and StubHub itself.

This past year, due to this anticompetitive scheme, StubHub’s listings for Warrior tickets have decreased by approximately 80%. Next year, the price of Warriors season ticket for the ’15-’16 season will increase by 30%.

This “monopolistic” practice encompasses the exclusive rights Ticketmaster has in reselling the tickets. These season tickets may only be acquired through Primary Ticket Platforms.

The Warriors already have substantial market power over consumers because they issue these season tickets; however, due to this “monopolistic conspiracy,” there may be no opportunity for a Secondary Ticket Exchange.

The Terms and Conditions to “Non-Transferability” explicitly states, “Sale or resale of any tickets by unauthorized means is prohibited… Authorized resale of your tickets via online means is limited to (Ticketmaster’s) NBATickets.com.

Subsequently, Ticketmaster would have exclusive control of the ticket resale industry, and the Warriors have threatened to revoke season from fans who do not abide.

NBATickets.com vs. Other Secondary Ticket Exchanges

The purpose of the Secondary Ticket Exchange is to provide network services and options for potential ticket buyers.

Fans may not be able to attend a game due to time conflict or illness, as potential buyers may want to invest and resell on an Exchange by grouping quantity and quality of tickets for an event.

StubHub notes that the frequency of the Exchange is what makes that Exchange more attractive.

Under NBATickets.com’s provisions for “Electronic Delivery,” tickets that are not available for Electronic Delivery will be shipped out.

As part of its complaint, Stubhub states that Ticketmaster’s Primary Ticket Platform has waited until only a few days prior to the event, in order to prevent fans from reselling their tickets on competing Secondary Ticket Exchanges.

StubHub also contends there are no offsetting benefits to eliminating the Secondary Ticket Exchange market.

On NBATickets.com, Ticketmaster assures this is the only way to eliminate fraud and assure security to ticket purchasers. NBATickets.com labels its tickets “Ticketmaster Verified,” because its barcode verification technology gives purchasers the utmost security and convenience.

When fans purchase tickets from NBATickets.com, they are “buying from the team.” 

However, it also bears to note Ticketmaster can charge all the service fees it desires, and Warriors fans would still have to pay; they can only purchase season tickets through Ticketmaster.

What This Means. Do We Even Know?

Currently this exclusive partnership is directly detrimental to StubHub and competition; but according to StubHub, these “unlawful business practices” are projected to harm consumers in the future.

It is unclear whether Ticketmaster actually protects consumers, or merely rejects electronic tickets in order to delay and ships tickets for certain events or venues.

From the face of StubHub’s complaint, it seems as if Ticketmaster and the Golden State Warriors have used “security” and “partnership” to its advantage.

However, we cannot merely assert StubHub’s allegations of a conspiracy are true.

At a time of demand for Warriors season tickets at an all-time high and steady rise, and coincidentally as technology develops in modern society, the Golden State Warriors and (Ticketmaster’s) NBATickets.com may be able to raise a viable defense.

NBATickets.com may actually be the only current method of exchange to prevent fraud and assure security.

Although ESPN alleges this could be a “landmark case” in the works, why has this process not been previously applied to home games for the other successful organizations like the Bulls, Cavaliers, Mavericks, or Clippers?

The NBA Attendance Report of 2015 shows that these teams have exceeded well past their respective 100% sellout rates.

What is even more interesting is that the Knicks are 4th in rank in attendance, despite their atrocious performance this year.

As StubHub awaits Ticketmaster and the Warriors’ responses to this claim, in the event they have abided the law, it may be in the best interest of Secondary Ticket Exchange services to start opening up talks with professional sports organizations and its front offices regarding season ticket resale… to assure “security” and “authenticity” to consumers, of course.

 

Topics: Lawsuits