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

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.

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.

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.

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.”

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.”

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.

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.

Cavaliers were the first NBA team to offer this exciting new technology, and
their fans have been very enthusiastic about it,” Gerace added. “It
is far more convenient and fan-friendly than any other service on the market.
Fans have flocked to this innovative service because it is both easier to use
and adds value and significant benefit to the ticketing process.”

Seats provides quick and easy access to Quicken Loans Arena through specially
marked gates where, instead of presenting a paper ticket, the seat-holder
presents a credit card or driver’s license for paperless, electronic entrance.

With Flash
Seats, season ticket holders can transfer their electronic ticket(s) to family
members, business associates or other parties on the Internet by simply
entering the e-mail address of the intended recipient who will then
electronically receive the paperless tickets.

ticket holders also have an option to utilize an easy, secure secondary marketplace
through Flash Seats by selling their seats at fair market value.

Buyers can be assured that the purchased seat
is authentic and valid.

contract with the Cavaliers prevents Flash Seats technology from being used for
the resale of Cavaliers single-game tickets (tickets other than season ticket

does not offer fans a paperless, electronic ticket or a paperless secondary
marketplace. The court filing points out that Ticketmaster has attempted to
sell the Cavaliers and other customers an inferior secondary- ticketing product
called TeamExchange, which does not offer fans the same features and
conveniences that Flash Seats and other secondary marketing exchanges offer.

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