Flash Seats and the Cleveland Cavaliers File Joint Federal Lawsuit Against Ticketmaster

Flash
Seats and the Cleveland Cavaliers have filed suit against Ticketmaster, the
dominant ticketing company in professional sports. The complaint was filed
today in the U.S. District Court for the Northern District of Ohio.
Cleveland-based Flash Seats, LLC and the Cleveland Cavaliers have common,
though not identical, ownership.

In the
complaint, Flash Seats and the Cavaliers seek “to stop Ticketmaster’s
ongoing campaign to utilize its substantial market power in ticketing service
to exclude actual and potential competition,” in violation of federal and
state antitrust laws.

The
complaint also alleges that Ticketmaster is “coercively seeking to enforce
its primary-ticketing contracts (relating to the direct sale of tickets to the
public) with the Cavaliers and other customers” by requiring them to use
only Ticketmaster’s own secondary-ticketing program (relating to the resale of
tickets) or none at all.

Ticketmaster
does not offer a secondary-ticketing product with the capabilities and fan
conveniences of Flash Seats’ products and services.

Flash Seats offers fans easy,
electronically transferable, paperless arena access that many patrons find more
advanced and convenient than Ticketmaster’s solution, which only utilizes paper
ticket entry.

Sam
Gerace, chief executive officer of Flash Seats, said, “Fans deserve to
enjoy and benefit from a free and open marketplace. We believe fans suffer from
less competition and less innovation due to the Ticketmaster business practices
we address in our lawsuit. We further believe Ticketmaster is trying to prevent
the Cavaliers and numerous other professional sports teams from offering their
fans the ability to buy and sell tickets on any secondary- marketing exchange
Ticketmaster does not own, as well as preventing fans from enjoying innovative
new technology products that are not Ticketmaster’s. We feel it is time to put
a stop to these practices.”

“We
have been focused on this issue for some time,” said Len Komoroski, the
Cleveland Cavaliers and Quicken Loans Arena president. “Our fans have used
and enjoyed the Flash Seats service this past season, and after many months of
discussion with Ticketmaster were unproductive, we felt compelled to take this
action. How can Ticketmaster be allowed to prevent a team from offering a
service to its fans that Ticketmaster itself does not offer?

Should pro
sports teams simply be limited to offering only services that Ticketmaster
decides to offer? We think the answer to that is very clear. No.”

The
dispute cites what Flash Seats and the team allege are Ticketmaster’s
anti-competitive efforts to interfere with the Cavaliers’ offering to its
season ticket holders one of the new and technologically advanced Flash Seats
services. Introduced at the beginning of last season, Flash Seats offers season
ticket holders the convenience of ticketless venue access, electronic transfer
of tickets, and a secure, team-sanctioned online secondary-ticketing
marketplace for transferring and selling their game seats electronically (and
without paper) to other fans.

Ticketmaster
now contends that the Cavaliers’ conduct in making Flash Seats available to its
season ticket holders violates Ticketmaster’s exclusive rights. Although the
Cavaliers have a contract with Ticketmaster for the sale of individual game
tickets in the primary-ticketing market, Komoroski said its exclusivity
provision has never been applied, and was never intended to apply, to the
secondary-ticketing market for season tickets or the manner in which season
ticket holders transfer or resell their tickets to other fans.

“The
Cavaliers were the first NBA team to offer this