Ticketmaster sues eBay’s StubHub over ticket sales

Reuters, News.com: Ticketmaster is suing eBay Inc. in Los Angeles, accusing the Internet auction company’s subsidiary StubHub of fraudulently obtaining premium tickets to sell online.

OK, I hate to be the one to say it, but “I told you so!”

Anyone I have talked to about the ticketing business since eBay’s acquisition of StubHub, knows I have talked at length about how eventually Ticketmaster is going to start enforcing their contracts and going after the secondary market. I even wrote about it in January when eBay made the purchase.

As you read these articles (and others) about this, you notice that Ticketmaster alleges that StubHub was negotiating directly with the bands and venues for inventory. If that is the case, then there’s gonna be some fireworks. 😉

The reason that I know this is because if Ticketmaster is getting into a fight, they don’t do it unless they can win. Ticketmaster is also most likely doing this on behalf of their clients, maybe even some of the promoters and venues that are allegedly selling StubHub the tickets, under pressure that they aren’t making the money in the mark-up on the secondary market for the tickets…. Ticketmaster often takes the black eye for their clients on such topics as service charges, etc. when the client knows what they are going to be (they are contractual often times) and points the finger at TM.

And there’s the fact that often a band/group/artist doesn’t “own” the seats that they are selling to the ticketing company. It’s complicated, but to dumb it down, in general — a promoter rents a venue and contracts with a band/artist/group to play. The band gets a fee and may get a “percentage of the house”, but that’s a dollar value based on value of the capacity of the building for the show, not actual tickets. They may also have a contract rider that gives them X tickets per show, but the contracts are written in a way, especially those with the promoters and venues, assuring that TM is the sole “computerized ticketing” source/provider. The contracts with the band/artist/group from the promoter often mention that the promoter, or his/her delegate etc., is the sole “seller” of tickets.

So as Ticketmaster roles out their own secondary market (they have auctions where promoters and venues offer up some of the best seats at a premium price) and an exchange system where you can sell your season seats and the buyer can easily re-print them; the secondary secondary market is going to get squeezed.

First Ticketmaster is going to make their lives very hard through legal channels. Then Ticketmaster is going to not only start promoting their secondary market for premium seats, but they are going to promote it as a primary source for secondary seats. By that I mean; since TM is the primary ticket seller for the venue/promoter, not only is there greater inventory to “pull” from, but the quality and validity can be assured.

And with the prices that are being charged for a concert ticket these days, I want to make sure that it’s a great seat and not a counterfeit ticket bought from some guy named “Vinny”…. 🙂