In a multistate settlement agreement between the National Football League and six state attorneys general, the NFL agreed it will no longer set price minimums for tickets sold on secondary markets.
The settlement ends an antitrust investigation, led by New York Attorney General Eric Schneiderman, into the NFL’s “fixed game” of ticket resales that has allegedly kept prices artificially inflated.
Parties to the agreement include the NFL, along with Schneiderman, Ohio Attorney General Mike DeWine, Massachusetts Attorney General Maura Healey, Florida Attorney General Pam Bondi, Pennsylvania Attorney General Bruce Beemer and D.C. Attorney General Karl Racine.
The antitrust investigation was launched in 2014 after Schneiderman received a large number of complaints to his office regarding inflated NFL ticket prices.
In January, Schneiderman released a 43-page report, titled “Obstructive View: What’s Blocking New Yorkers from Getting Tickets.” The report criticized the NFL’s ticket sale practices and recommended substantial industry and legislative changes.
In scrutinizing the sale of NFL tickets, the report states that without price floors, tickets might sell for far less than currently allowed. As a result, consumers might be paying more for NFL tickets than they would be paying in a competitive market.
As a result of the investigation, the NFL agreed in the settlement to stop their practice of imposing floor prices on tickets sold on secondary marketplaces. The league said it would no longer “formally or informally coordinate or encourage pricing practices among its member clubs” that would result in minimum resale prices.
The deal is designed to make it easier for fans to find tickets at lower costs on secondary markets. However, the agreement provides that the NFL may leave the decision of whether to maintain a “price floor” on the NFL Ticket Exchange up to each individual member club “to be made unilaterally.”
Therefore, individual teams will still be allowed to set minimum resale prices at their discretion. While Schneiderman said he “encourages every NFL team — and every team in professional sports — to heed the call of all sports fans and remove price floors,” the reality is that only 10 teams have eliminated the price floor completely.
Further, the NFL acknowledged no wrongdoing in the settlement agreement and paid only $102,100 for the states’ cost of the investigation. No penalty payments were enforced.
NFL spokesman Brian McCarthy said they were satisfied with the agreement and also stated the agreement “confirms that the state attorneys general have concluded their two-year investigation and did not identify any injury to consumers resulting from the leaguewide Ticket Exchange price floor.”
While Schneiderman vows that his office will continue to “fight for the rights of sports fans by ensuring that secondary markets are free and competitive,” still, the agreement does not mean price floors will necessarily be eliminated for all the league’s 32 teams.
As noted, individual teams will still be allowed to implement minimum resale prices and so far only 10 teams have taken measures to eliminate the price floor completely.
The settlement agreement, which runs through 2026, ends any legal action the six attorneys general may have been able to bring over ticket-pricing policies, including lawsuits under laws pertaining to unfair competition, deceptive trade practices and price discrimination.
Note, however, that the agreement does not preclude any other state attorney general from bringing similar claims or conducting their own investigations.
Still, this settlement, along with recent court decisions in favor of sports leagues, should leave the NFL hopeful that it will not face future legal liability for ticket pricing.
In January of this year, the 3rd U.S. Circuit Court of Appeals ruled in favor of the NFL, finding that two New Jersey football fans lacked standing to bring a putative class action alleging violation of New Jersey’s Consumer Fraud Act and unjust enrichment. Finkelman v. National Football League, 810 F.3d 187 (3d Cir. 2016).
The plaintiffs charged the league with breaking New Jersey law and alleged that only 1 percent of the seats in MetLife Stadium were released to the public for the 2014 Super Bowl. Josh Finkelman and Ben Hoch-Parker filed the suit on behalf of anyone forced to pay more than face value for the Super Bowl game or anyone who wanted to buy seats and could not afford to pay for the tickets.
Ultimately, the court said the plaintiff-consumers lacked standing because Finkelman purchased two tickets on the secondary market, and Hoch-Parker made a decision not to purchase tickets at all.
A similar action involving the NBA and their restriction on ticket resales was filed last year in California. In November 2015, U.S. District Judge Maxine Chesney dismissed an antitrust lawsuit brought by StubHub against the Golden State Warriors and Ticketmaster, finding the arrangement between the defendants to be compatible with antitrust law. Stubhub Inc. v. Golden State Warriors, LLC, 2015 WL 6755594, at *2 (N.D. Cal. Nov. 5, 2015).
StubHub accused Ticketmaster and the Warriors of conspiring to direct Warriors’ season ticket holders to resell their tickets only through Ticketmaster. StubHub argued the agreement limited competition in the marketplace for resale tickets and led to higher prices for consumers.
Chesney found StubHub’s arguments unfounded and ultimately ruled in favor of the defendants, finding no evidence of a violation of antitrust law.
While the StubHub case involves different facts and a different league, it nonetheless supports the restriction of ticket resales in secondary markets, specifically Ticketmaster, the entity that runs the NFL Ticket Exchange.
It is certainly possible that the NFL and other leagues could face similar lawsuits, particularly if individual member clubs continue to put artificial limitations on the ticket resale market.
However, the NFL’s willingness to settle this issue, and recent case precedent suggests that these challenges will be less frequent and probably less likely to succeed.
From a fan perspective, the settlement agreement is intended to make it easier for consumers to find tickets at lower costs, and hopefully this proves to be true, but even if it does not, recent court cases and provisions of the settlement agreement have further insulated leagues from potential liability.