Four large ticket brokers have filed a lawsuit against the Los Angeles Dodgers after their season tickets were canceled as part of a consolidation deal with Eventellect. The brokers argue they have supported the Dodgers for years including the team’s playoff drought last decade and argue the Dodgers are canceling their tickets to cash in on the team’s success after making the World Series in 2017.
The case could be a legal test of the consolidation movement within sports, where teams are canceling the season tickets of brokers they have worked with for years. Once the seats are canceled, teams like the Dodgers then negotiate the resale rights with a single partner in a multi-million-dollar deal. By cutting out individual brokers and working with a single resale partner, teams have more control over pricing and how tickets on the primary and secondary market are sold.
In the case of the Dodgers, the team allegedly canceled the season tickets of brokerage firm Prestige Entertainment, Broadway Hospitality Group, Venue Kings and 714 Tickets in January as it prepared to make Eventellect its sole resale partner. Those four brokers filed suit in Los Angeles Superior Court Friday, alleging breach of contract, fraud and violations of California business law. The lawsuit alleges that approximately 17,000 seats in the 56,000-seat stadium are controlled by brokers.
Attorney Jonathan Genish with Blackstone Law tells Amplify that his four broker clients had an implied contract with the team, built over a decade in which the brokers would buy up inventory throughout the regular season, sometimes losing money, in hopes of the team making the playoffs.
“Brokers rely on that implied contract when the teams are not performing well, knowing that they’re making a long-term investment when the team improves,” Genish tells Amplify. “Now that they finally have a good team in place, the Dodgers have excised all these third-party brokers.”
Some of the brokerage firms challenging the Eventellect deal — Venue Kings and 714 Tickets — have similar consolidation deals in place with other professional sports teams. Another plaintiff, Prestige, is currently being sued by Ticketmaster in a $10-million lawsuit that includes allegations the secondary market firm used bots to buy up tickets for shows like Hamilton.
The Dodgers lawsuit includes plenty of its own allegations that offer a behind-the-scenes look at ticketing, including a claim that the team would halt the sale of tickets on StubHub when a special promotion would be announced so that ticket brokers could adjust their ticket prices up without worrying about being outpriced by StubHub. On April 20, 2016, the team’s VP of Ticket Sales David Seigel allegedly sent an email to Venue Kings’ founder David Beyrouti telling him a Sept. 23 game was selected as Vin Scully Appreciation Day and the team “took down StubHub for that particular game for three hours with the intent to give you (Beyrouti) ample time to make any necessary adjustments.”
On June 17, Seigel sent a similar message that he wanted to give Beyrouti a “heads up that as of now StubHub will be temporarily pulling down sales for the 9/8 game pending an announcement by the Dodgers that we will be adding a Cody Bellinger Bobblehead on that game. Hopefully, this gives you enough time to reprice your seats and take advantage of this added value opportunity.”
The suit also alleges that the team gave brokers “offline” deals to avoid fees and enjoy special pricing that was not offered to the public. It also says brokers were pressured to “donate” tickets they purchased back to the team so they could “give” them away to fans. In another instance, the suit says Dodgers’ President and CEO Stan Kasten pressured brokers to sell him Hamilton tickets when they could have been sold on StubHub for $5,000.
The suit alleges the team notified brokers they would not be selling them tickets on Jan. 25 and weeks later announced the Eventellect deal. Genish is asking the team to pay damages for lost revenue to brokers and is asking for an injunction to block the transfer of tickets to Eventellect.