New England Patriots Sue StubHub - Boston Globe

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Patriots sue ticket reseller in effort to fight scalping
By Keith Reed, Globe Staff | November 23, 2006

The New England Patriots have filed suit against one of the nation's largest ticket resellers, StubHub Inc., saying the company encourages fans to flout the state antiscalping law and the team's prohibition against reselling Patriots tickets for a profit by facilitating the sale of tickets on its website, StubHub.com.

The suit, filed Tuesday in Suffolk Superior Court, also names as defendants two Bridgewater residents who allegedly resold season tickets on StubHub after the tickets had been revoked by the team, and 50 other unnamed Patriots season ticket holders who, the team says, illegally resold their tickets on StubHub.

By suing StubHub and the other defendants, the Patriots are taking on the resellers -- and their own fans -- to stop scalping. The team seeks an award of three times the revenue StubHub and the other defendants brought in through the online sales, plus an injunction against further resales of Patriots tickets on the StubHub website .

The lawsuit also could play a major role in the efforts of some lawmakers to revisit the state's antiscalping law in the spring.
"It appears that the current law is obviously not working," said state Representative Michael Morrissey, a Democrat from Quincy. "I applaud the actions of the Patriots, but the question is, how does that stop the guy on the corner from reselling the ticket? They'd never know about it if the person didn't list the ticket on StubHub."

Ticket resales have boomed in recent years as the Internet has made it easier to bring buyers and sellers together. Industry sources estimate annual sales of $4 billion to $10 billion in the resale market, with giants such as StubHub, eBay, Craigslist, RazorGator, and Ticket Liquidator and a host of smaller agencies and websites reselling millions of tickets.

With so much money at stake, professional sports teams and companies that once shunned the shadowy world of ticket scalping now want a piece of the action. Ticketmaster, a company that collected $950 million in fees last year selling tickets to concerts, stage shows, and sporting events, is trying to make millions more reselling those same tickets. Major League Baseball has gotten into the resale business with the website Tickets.com. The four major professional teams in the Boston area all provide or will soon offer a resale service for season ticket holders online.

Many states are doing away with their antiscalping laws, prodded by teams and corporations eager to get a piece of the resale market. Florida, Louisiana, and South Carolina have scrapped or relaxed many of their regulations this year; Illinois and New York did the same last year.

But scalping is still illegal in Massachusetts , though the law is rarely enforced. The law doesn't prohibit ticket purchases above face value, but it requires anyone in the business of reselling tickets in Massachusetts to obtain a license from the Department of Public Safety and limits markups to $2 above face value, plus certain service charges.

Last night, however, several dozen tickets to the Patriots' home game on Sunday against the Chicago Bears were listed on StubHub.com. Lower sideline seats with a face value of $125 were being offered for $754; upper-level sideline seats, face value $59, were for sale at $205.

In an e-mailed statement, StubHub said last night it could not comment on the suit because it had not yet been served with it. But the company said it has already struck partnership deals with other NFL teams, and it said it has sufficient protections in place to prevent fraud and abuse.

"StubHub is a champion for the rights of fans to be able to gain access to tickets for events they want to see and a platform to sell the tickets they cannot use," the statement said. "Every individual is subject to our user agreement which obligates them to abide by their local and state regulations with respect to ticket resale," the statement read.

Daniel Goldberg, the attorney representing the Patriots, acknowledged that there are many other ways fans and scalpers resell tickets, but he said StubHub as a particularly troublesome offender that encourages ticket holders to resell, often at inflated prices and without warning buyers that the tickets they purchase may not be honored by the club.

"If you're encouraging people to list their tickets for sale, if you're doing that knowing that these tickets have an expressed prohibition against reselling and they're not telling them what the risks are, I think that's an issue," he said.

All sales of Patriots tickets originate with the team, though they can also be bought legally through Ticketmaster, a company that has a deal with the National Football League. Beyond that, the Patriots prohibit resale of any of tickets except through a website it controls, which allows those on the waiting list for season tickets to buy them from existing season-ticket holders at face value.

The Patriots can revoke a fan's season tickets if he or she resells them, or for unruly conduct during the game. When that happens, the bar code on the ticket is deactivated for the rest of the season . Those tickets are supposed to be returned to the Patriots, but in some instances they end up on StubHub without any warning that the purchaser -- who often pays hundreds of dollars above face value -- won't be allowed into the game.

That problem, the Patriots argue, is worsened by a guarantee from StubHub that if tickets turn out to be fraudulent, the website will find alternate accommodations for the buyer.

"Our experience is that as the listings on StubHub have increased, so also have the number of people who show up at the stadium with invalid tickets," Goldberg said.

The Patriots say two defendants , Steven McGrath and Carol McGrath of Bridgewater, sold invalid season tickets through StubHub. A woman who answered a phone listed to Carol McGrath in Bridgewater declined to comment on the lawsuit .
Dorchester resident Colman Herman, who has sued ticket brokers in the past, applauded the Patriots' action against StubHub. "All they have to do is go after one and really whack 'em, and that'll be it," he said.