Possible Challenges to Sports Leagues’ and Teams’ New Policies Regarding Secondary Ticket Exchanges

Sports fans across the United States utilize secondary ticket exchanges such as StubHub and SeatGeek to obtain tickets to sporting events. These exchanges allow fans to acquire tickets for sporting events from current holders of tickets. Additionally, these services allow for the exchange of digital tickets that fans can print out from the comfort of their own home. However, sports teams and leagues in recent years have implemented policies that limit access to these secondary ticket exchanges.1

Some teams have implemented paperless policies.2 Leagues have also limited what exchanges can be used to procure tickets and have set price floors that limit the alienability of tickets.3 These limitations are in response to fraud concerns as well as to season ticket holders, who spend a large amount on season tickets, having to sit next to fans who purchased their ticket for a fraction of the cost on one of the secondary ticket exchanges.4

Several lawsuits have been brought over the years that challenge these practices, arguing that they violate Section 2 of the Sherman Antitrust Act. These cases include lawsuits against the San Francisco 49ers5 of the National Football League (“NFL”), and against the Golden State Warriors6 and Minnesota Timberwolves7 of the National Basketball Association (“NBA”). The lawsuit against the 49ers was voluntarily dismissed by the plaintiff8 and the case against the Warriors was dismissed.9 Additionally, Eric Schneiderman, the New York Attorney General, published a report on similar practices used throughout the state of New York, including practices used by the New York Yankees.10 The Yankees implemented a new paperless policy earlier this year, but have since reached an agreement with StubHub, which will allow fans to use the secondary ticket exchange.11

Legal commentators, such as Michael McCann, from Sports Illustrated, have analyzed the potential antitrust implications for these policies.12 McCann also presents several defenses available to the leagues and suggests a glimmer of hope in that the Golden State Warriors lawsuit was dismissed by the U.S. District Court for the Northern District of California.13 Rather than focusing on an antitrust argument, I believe fans who wish to sell their tickets but are prohibited from doing so may have a claim against the leagues and teams for tortious interference with prospective economic gain.

To make out a claim for tortious inference with prospective economic gain in New York, for example, “a plaintiff must establish ‘(1) that [he] had a business relationship with a third party; (2) the defendant knew of that relationship and intentionally interfered with it; (3) the defendant acted solely out of malice, or used dishonest, unfair, or improper means; and (4) the defendant’s interference caused injury to the relationship.’”14 In cases where a season ticket holder would have sold tickets to another consumer but for ticket restriction policies, elements 1 and 4 should be satisfied.
The problem with these claims will come in arguing that the leagues and teams have knowledge of the relationship and acted with malice. For the latter element, New York courts require the Defendant’s actions rise to a level of criminal or tort liability.15 If the seller is able to show that the team or league violated a ticket consumer act, or any consumer protection act, this element should also be satisfied. The former element will most likely prove to be the most difficult to show. Whether courts will determine actual knowledge or constructive knowledge is required will resolve this issue. If a plaintiff need only show constructive knowledge, it is likely all elements will be satisfied as it is reasonable to expect fans to sell tickets if they cannot make a game.

  1. Zachary Zagger, New Ticket Restrictions Could Be Risky for Teams, Law 360, (Mar. 25, 2016), http://www.law360.com/articles/776139/new-ticket-restrictions-could-be-risky-for-teams.
  2. Id. See also Eric Schneiderman, Obstructed View: What’s Blocking New Yorkers from Getting Tickets, http://www.ag.ny.gov/pdfs/Ticket_Sales_Report.pdf. at 36 (“‘Paperless tickets’ are non-transferrable event tickets that are designed to avoid resale by brokers . . . it is harder for paperless tickets to be transferred or resold, given the need to present the purchasing credit card.”).
  3. Eben Novy-Williams & Christie Smythe, NFL’s Ticket Rules Said to Be Subject of Antitrust Investigation, Bloomberg, (Jan. 27, 2016), http://www.bloomberg.com/news/articles/2016-01-28/nfl-s-ticket-rules-said-to-be-subject-of-antitrust-investigation.
  4. Jared Diamond, A Pitched Battle Over Yankees’ Ticket Policy, The Wall Street Journal, (Feb. 21, 2016), http://www.wsj.com/articles/yankees-president-says-new-ticket-policy-designed-to-prevent-fraud-1456016684. (“[T]he Yankees’ new ticket policy is designed to look out for the interests of their best customers: their season-ticket holders.”).
  5. Bob Egelko, Season Ticket Holder Sues 49ers Over New Resale Policy, SF Gate, (Aug. 12, 2015), http://www.sfgate.com/49ers/article/Season-ticket-holder-sues-49ers-over-new-resale-6438554.php.
  6. StubHub Inc. v. Golden State Warriors, LLC, No. C 15-1436, 2015 U.S. Dist. LEXIS 151188 (N.D. Cal. Nov. 15, 2015).
  7. Michael Rand, Timberwolves Sued Over Paperless Ticket Policy, StarTribune, (Mar. 4, 2016), http://www.startribune.com/timberwolves-sued-over-paperless-ticket-policy/370973641/.
  8. Bob Egelko, 49ers’ Season-Ticket Holder Drops Lawsuit Over Sale Restrictions, SF Gate, (Feb. 9, 2016), http://www.sfgate.com/49ers/article/49ers-season-ticket-holder-drops-lawsuit-over-6819456.php.
  9. StubHub Inc. v. Golden State Warriors, LLC, No. C 15-1436, 2015 U.S. Dist. LEXIS 151188 (N.D. Cal. Nov. 15, 2015).
  10. Eric Schneiderman, Obstructed View: What’s Blocking New Yorkers from Getting Tickets, http://www.ag.ny.gov/pdfs/Ticket_Sales_Report.pdf.
  11. Madeline Farber, Yankees and StubHub Reach Ticket Re-Sale Deal, Fortune, June 27, 2016, http://fortune.com/2016/06/27/yankees-stubhub-ticket-deal/.
  12. Michael McCann, Breaking Down N.Y.’S Investigation Into NFL Ticket Sale Practices, Sports Illustrated, Jan. 29, 2016, http://www.si.com/nfl/2016/01/28/nfl-ticket-prices-investigation-eric-schneiderman.
  13. Id.
  14. Penrose Computer Marketgroup, Inc. v. Camin, 682 F. Supp. 2d 202, 215 (N.D.N.Y 2010) (citations omitted).
  15. Id.

Author: Christopher Bascelli

Chris Bascelli is a third-year law student and a Managing Notes & Comments Editor of the Rutgers Computer and Technology Law Journal. Chris graduated from Muhlenberg College with honors in 2015, majoring in Political Science and History. Chris played lacrosse at Muhlenberg and enjoys analyzing the NFL Draft.