Warriors file to dismiss suit accusing them of rigging resale market

ByDarren Rovell via ESPN logo
Sunday, May 24, 2015

The Golden State Warriors are taking care of business on the court in the Western Conference finals, but the team is also focused on taking care of business in court.

The Warriors responded Friday to a lawsuit brought against the team and Ticketmaster by ticket resale site StubHub, accusing them of illegally rigging the resale market, by filing a motion to dismiss the case.

The case, should it proceed to trial, would be seen as a landmark development in the sports ticketing industry. A legal decision would set forth for the first time an established precedent as to whether the sports fan leases the right to a ticket or owns it and whether teams have the right to tell fans where they can sell the seats that they buy.

Through Golden State's deal with Ticketmaster, StubHub has alleged that the Warriors have informed fans that if they don't use the Ticketmaster platform to resell their tickets, their ticket buying privileges could be revoked. StubHub claims that this is an illegal marketplace restriction according to federal law and legislation in California, where the Warriors do business and StubHub has its headquarters.

But attorneys for the Warriors, in their formal response to the court, argued that for many reasons their deal with Ticketmaster can't be seen as an unfair restraint of trade. The most essential argument the team makes is that it has the right to tell fans how they can sell their tickets because, as stated by the team's terms and conditions, "a ticket is a revocable license, and a licensor has long been permitted to impose restrictions on its licensees." While that has been established for years by teams, the idea specifically has not been legally confirmed.

Furthermore, the Warriors say that they are not unfairly controlling the market for Warriors tickets because their tickets don't represent the entire marketplace. Rather, the Warriors are competing in a marketplace that makes up all local entertainment options. Even though common sense might suggest that there's no exact substitute for seeing Stephen Curry and Klay Thompson, the law, the Warriors argue, says otherwise.

A recent court decision in Illinois in the case between the Chicago Cubs and the Wrigley rooftop owners suggested that while the Cubs product is unique, it doesn't mean there are no alternatives.

That is why, the team argues, it restricts resales to Ticketmaster -- so that it can better serve the fan and rid the marketplace of fraud and better compete with other entertainment options. StubHub alleges that the Warriors do what they do to be able to make money not only on the primary sales of tickets, but also take a percentage off the resale portion.

The response also says that StubHub fails to describe a single person who has been affected by the restriction on the resale market and that the fan doesn't care what marketplace he or she buys it on, or whether he or she buys the ticket directly from the team or by resale, as long as he or she has a seat.

Counsel for the Warriors further say that StubHub had a chance to win the team's resale business as part of a bidding process two years ago, but did not prevail. This makes clear that at least the process to secure the business wasn't anti-competitive.

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