Originally posted on Fangraphs  |  Last updated 4/23/13
When Major League Baseball renewed its partnership with StubHub last winter, the Yankees and Angels opted out. Instead, each of those teams created its own ticket resale marketplace in partnership with TicketMaster. Like many teams, the Yankees and Angels were unhappy about the MLB/StubHub arrangement, which often results in tickets selling on StubHub for prices well below face value. Those secondary-market sales then undercut a team’s ability to sell additional tickets at face value. The Yankees asked MLB to negotiate a price floor in the new MLB/StubHub contract. When that didn’t happen, the Yankees and Angels went their own way with the TicketMaster Ticket Exchange. What has that meant for fans holding Yankees and Angels tickets? If you purchase Yankees tickets and you want to sell your tickets and transfer them electronically, you must do so using the team’s Ticket Exchange. StubHub isn’t authorized by the Yankees to allow the print-at-home option for ticket buyers. If you purchase Angels tickets and want to to sell your tickets and transfer them in any manner, you must do so using the team’s Ticket Exchange. According to the Angels, the team can void any ticket “should any person sell or offer this ticket for resale,” and resale in any forum other than on the team-authorized Ticketmaster site “is prohibited.” These ticket re-sale restrictions have prompted several responses from StubHub and its allies. In New York, StubHub opened a store near Yankee Stadium so that ticket sellers and ticket buyers would have a secure location for the physical transfer of tickets once the electronic sale transaction had been completed. The Yankees responded by suing StubHub for violating New York’s anti-scalping law, which prohibits the sale of tickets within 1,500 feet of an event venue. The trial court in the Bronx agreed with the Yankees, granted a temporary restraining order, and shut down the StubHub store front. On the day the court was to consider a more permanent ban on the StubHub location, the parties reached a confidential settlement. The fate of the store front just steps from Yankee Stadium is unclear. Lawyers for the Bronx Bombers said after the settlement was reached that fans would not be permitted to pick up tickets at that location that had been purchased online. StubHub didn’t comment on the settlement per se, but pointed out that it had opened a second location — outside the no-scalping zone — where fans can pick up tickets purchased through the online re-seller. That pick-up center is located in a Payless ShoeSource store in the Bronx Terminal Market. The parties are to submit the settlement agreement to the court by May 7. In California, StubHub’s taken its fight to the state legislature. Dr. Richard Pan, an assembly member from the Sacramento area, introduced a bill to amend provisions of the state’s Business & Professions Code which regulate ticket re-sellers. The bill would, among other things, prohibit any ticket issuer in the state from placing restrictions on the transferability of an event ticket or “otherwise prohibit a person from reselling the event ticket on an online marketplace not owned by the ticket issuer or its authorized agent.”  The bill has four co-authors — two members of the Assembly and two state Senators. Dr. Pan issued the following statement in response to an inquiry on his support for the proposed legislation: Concerts and sporting events are part of what binds communities together, and our ability to attend these special events with the people we care about shouldn’t cost us yet another fee. By protecting our right to own the tickets we bought so we can freely use them, at the time and manner in which we choose, we can make sure that having an extra ticket means one more friend can attend the game or the show. That statement doesn’t make a ton of sense. StubHub charges a hefty fee on any ticket transaction. Indeed, according to Dr. Pan’s office, the bill is supported by StubHub, as well as consumer groups and transportation associations.  The Assembly Art and Entertainment Committee will hold a hearing on the bill today (Tuesday, April 23) at 9:00 a.m. According to the Los Angeles Times, the Angels will send a representative to the hearing, as will the Dodgers, Padres, A’s and Giants.  It’s worth noting, though, that the four other California-based teams not only participate in the MLB/StubHub arrangement but also allow fans to electronically transfer tickets to friends without a fee. According to Fan Freedom, an organization that claims to speak for the rights of ticket holders, similar bills are pending in Florida, Texas, New Jersey and Minnesota. Like the California bill, these other proposals seek to create a clear property right in an event ticket, such that the purchaser can sell, transfer or do anything else she chooses with the ticket. These broad provisions are aimed at more than the restrictions the Angels impose on their tickets. The real battleground is on electronic-only tickets, where the ticket information resides only on the purchaser’s credit card and only the purchaser can use tickets. Concert and other event venues have moved toward these electronic-only tickets for a variety of reasons, not the least of which is to limit the secondary market. The MLB/StubHub contract will be in effect through the end of the 2017 season, unless the parties agree to modify it sooner. Ticket technology will undoubtedly evolve over the next four years. That will present challenges for StubHub and MLB teams seeking greater control over their ticket sales and the secondary market.
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