Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Fans sue NBA Timberwolves over paperless tickets, (Mar 8, 2016)

By Linda O’Brien, J.D., LL.M.

The new ticketing policy implemented by the Minnesota Timberwolves professional basketball team for the 2015-2016 season is anticompetitive and has imposed unlawful limitations on the ability of ticket holders to sell or transfer their tickets, according to a complaint filed in the Minnesota District Court in the County of Hennepin (GLS Companies v. Minnesota Timberwolves Basketball LP, March 3, 2016).

Minnesota Timberwolves Basketball LP owns the Minnesota Timberwolves, a professional basketball team that plays in the National Basketball Association (NBA). Tickets sold directly by the Timberwolves are sold for a set price, or face value. Tickets sold in the secondary market are resold by individual ticket holders for prices set by the individual sellers.

GLS Companies and James Mattson have purchased season tickets for the Timberwolves.

The complaint states that, after nearly 25 years of the same ticketing policy, the Timberwolves unilaterally changed its policy for the 2015-2016 season, after season ticket holders had already purchased their tickets. The changes, the plaintiffs claim, are onerous and far-reaching, and the Timberwolves did not consult or inform ticket holders about the changes to the ticketing policy because the team knew the changes are harmful to prospective ticket holders.

The new policy has eliminated paper tickets to Timberwolves home games; requires ticket holders to access, resell, or transfer their purchased tickets only on Flash Seats, the team’s approved secondary market platform; and requires ticket holders to resell their purchased tickets on Flash Seats under non-competitive restrictions, such as for mandatory minimum prices that are unilaterally set by the team.

The cumbersome and complicated process of using Flash Seats—creating a user profile, agreeing to a voluminous privacy policy, and providing access to personal data on the ticket holder’s smartphone—has made it difficult for ticket holders to access, resell, or give away their tickets, since recipients are unwilling or unable to follow the Timberwolves’ ticketing policy just to attend a single Timberwolves game, the complaint alleges.

According to the complaint, the changes were designed to allow the Timberwolves to exclusively control and generate more revenue from the secondary ticket sales market, in addition to the significant revenue the team already generates from the primary sales of its tickets. As a result, ticket holders allegedly are being deprived of the ability to freely resell or transfer their purchased tickets on platforms other than Flash Seats and for prices determined by the fair market. If the plaintiffs had known about the Timberwolves new ticketing policy prior to the purchase of their season tickets, they would not have purchased them or would have paid less for their 2015-2016 season tickets, they claimed.

The plaintiff asserts claims for breach of contract, unjust enrichment, and violations of the Minnesota Antitrust Act, Consumer Fraud Act, Unlawful Trade Practices Act, and Uniform Deceptive Trade Practices Act. The action seeks declaratory and injunctive relief, damages, pre- and post-judgment interest, costs of suit, attorney fees, and any other just and proper relief.

The case is No. 27-cv-16-2816.

Attorneys: Brian C. Gudmundson, Hart L. Robinovitch, Caleb Marker (Zimmerman Reed, LLP) and Vincent J. Esades (Heins Mills & Olson, P.L.C.) for GLS Companies and James Mattson.

Companies: GLS Companies; Minnesota Timberwolves Basketball LP

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