Resale Sites Forced to Cancel Ticket Orders within Hours of Champions League Final

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Thousands of English soccer fans embarked on the journey to Madrid for the Champions League final (between Liverpool and Tottenham) on June 1st only to find out that the tickets they had purchased on the secondary market didn’t exist – the threat of “indefinite season ticket bans” for fans caught scalping seats online had many of those intending to sell ultimately elect to attend the game. StubHub (and other resellers like Viagogo) was forced to notify buyers in the days leading up to the game that their orders would not be fulfilled – agreeing to refund those inconvenienced (including all fees & shipping costs incurred) and award them an additional +/- $1,900/ticket cancelled for their troubles. Those that accepted the offer waived their right to file suit against the company.

Howie Long-Short: Tickets were being sold for +/- $12,500 on game day, so the common misconception is that as prices rose sellers reneged on previously agreed upon deals in hopes of holding out for more money. But the increase in pricing didn’t happen overnight, it had been known for weeks that ticket prices would exceed $10,000.

In the days leading up to Tottenham’s first Champions League final, the club announced that it had “banned three season ticket holders [for offering] to sell their match seats online at a profit.” The ticket shortage – and ultimately the resale sites’ need to cancel transactions – stems from the panic that quickly spread after the news broke. Once season ticket holders began deciding to hold on to their tickets, brokers who had anticipated those seats (see: short selling) were left scrambling to fill the transactions completed on the resale sites. With no inventory available, StubHub (and Viagogo) ultimately had to cancel the listings and refund buyers.

While easy to point fingers at the resale sites – detractors will say they shouldn’t have been allowing so many speculative tickets to be sold and could have de-listed the event when the 3 Tottenham fans had their season tickets revoked – Brett Goldberg (co-CEO, TickPick) insists that much of what occurred was “out of their control. If the season ticket holder agrees to sell the ticket and then opts not to part with it, what can a resale marketplace do?” Goldberg isn’t wrong, but that explanation probably won’t sway European regulators who tend to have little tolerance for consumer protection law violators.

Fans who spent thousands on airfare and hotel rooms are unlikely to be satisfied with the $1,900 StubHub offered – particularly if they’re aware fans squeezed out of the ’15 Super Bowl (last major event with fans shut out due to short selling) between $5,000 – $10,000 – so it’s reasonable to assume the company will also be facing a class action lawsuit in the near future.

Fan Marino: Dumping extras in the parking lot (or now on resale sites) is a rite of passage for Jets fans, so it was shocking to see the Spurs revoke fans’ season tickets for trying to sell their seats. Goldberg explained that differing cultural dynamics allowed Tottenham to make an example of the violators. While scalping tickets is commonplace and socially acceptable in the U.S., it remains frowned upon in Europe. There have been cases of U.S. teams restricting broker access to tickets or revoking inventory from season ticket holders believed to be re-selling tickets, but the examples are far and few between.

The main reason you don’t see MLB, NBA and NHL teams revoking the season tickets of fans who sell seats to playoff games is the sheer volume of contests that make up their post-seasons. U.S. pro sports leagues (sans the NFL) are playing best of 7 series. Champions League matchups consist of just 2 games. While Champions League participants can host no more than 3 home games before qualifying for the final (6 if you include the group stage), U.S. teams could have as many as a dozen. It’s unreasonable to expect even the biggest of fans to attend that many games – the costs are prohibitive.

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Author: John Wall Street

At the intersection of sports & finance.

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