Canadian broker Julien Lavallee is a member of a little-known StubHub group comprised of the company’s top brokers and resellers that hold quarterly meetings with senior StubHub executives, including occasional visits by StubHub President Scott Cutler. The revelation comes as U.K. investigators probe whether ticket brokers selling through StubHub, Viagogo and other secondary markets used outlawed bots to buy up tickets, and whether or not company officials were aware of any illegal activity by its top sellers.
Lavallee was part of StubHub’s Seller Advisory Council, a group of high-volume brokers who sold at least $50,000 worth of tickets on the site and would meet with company officials to share feedback and ask for help with APIs, tech integrations and advise on seller fees and incentive programs. The Council was created to serve as a link between StubHub executives and their high-volume sales clients, everyone from professional brokers to big ticketing consolidators. According to several sources, Lavallee is still a member of the Seller Advisory Council. While one broker tells us that membership in the group doesn’t require non-disclosure of its existence, many declined to talk to about what is discussed or who attends these meetings.
Lavallee’s relationship with StubHub is coming under increased scrutiny following the publication of the Paradise Papers, which revealed that Lavallee used offshore accounts on Britain’s Isle of Man, a known tax haven, to set up a ticket operation that bought and sold tickets for concerts like Adele, Ed Sheeran and Metallica. In one instance, Lavallee purchased 310 Adele tickets over a period of 25 minutes, according to documents found in the papers, using 15 names and 12 addresses in three separate countries. While some cyber experts say the volume of purchases could only be done by a bot, established brokers tell Amplify it’s possible the purchases could have been made manually.
“The quantities of tickets being mentioned in these reports are not ‘bot’ quantities,” one high volume reseller tells Amplify. “Getting 100-200 tickets is very easy with staff helping pull tickets.”
Regardless, StubHub and Viagogo are now under scrutiny for their relationship with Lavallee and other brokers who are suspected of using bots to buy up tickets. Earlier this year, the U.K.’s Competition and Market Authority raided StubHub’s U.K. offices after the company refused to hand over records about its sellers, with investigators looking into what types of discounts the company provided as part of its top seller program.
Providing discounts on fees to high volume sellers is a practice many ticket resale marketplaces use to coax topline brokers to sell inventory and generate revenue through fees. The fee structures are not meant to explicitly encourage the use of bots — while it seems unfathomable to some that a broker clearing $5 million in sales could do so without the help of bots, it’s not uncommon for brokers to legitimately acquire large stakes in inventory through season tickets, subscriber packages and carveout deals with venues, teams and rights holders.
In a November 2016 article in the Daily Record, Lavallee claimed to procure the bulk of his U.K. inventory directly from British venues and show producers, including a Kings of Leon show at Glasgow’s SSE Hydro.
“(Lavallee) told us that he does not use ‘botnet’ technology to harvest tickets and believes he breaks no laws,” the Scottish paper reported, telling the news outlet: “We have contracts with venues that allow us to buy certain allotments in exchange for a yearly fee, so we reduce their risk in case they can’t attract the big acts.”
A rep for the SSE Hydro denied the claim, while a spokesperson from the O2 said they were investigating.
When it comes to understanding how tickets are procured, StubHub doesn’t ask a ton of questions of its sellers. While the company maintains a complex system of rating its sellers based on delivery time, cancellation rates and inventory quality, it’s 32-page Top Seller Handbook never mentions bots or ticket procurement. As long as the tickets are delivered on time and the seat locations match what the seller promises, StubHub doesn’t ask a lot of questions.
A StubHub spokesperson told Amplify that the company would investigate any claim of illegally-obtained tickets sold through its site, and bans users from any behavior that breaks the law. If Ticketmaster came to StubHub with a list of tickets they thought were procured by bots, StubHub would investigate, but that type of request has never been made.
The StubHub sellers manual does provide insight on one ticket sales practice that many consumer groups say is unfair and unethical — speculative ticket sales, where brokers list tickets on the site before they have the tickets in hand. According to the company’s Top Sellers Handbook, “StubHub does not permit or condone the practice of listing ‘speculative’ tickets for sale on the site.”
“Exact seat locations must be known before tickets can be listed,” the handbook reads. “Speculative and vague seat locations such as ‘TBD’ in either the Section or Row fields may be removed from the site at any time without prior notification,” adding “StubHub monitors the site for ticket listings that violate this policy.”