Flash Seats and Cavaliers File Lawsuit Against Ticketmaster

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FLASH SEATS AND THE CLEVELAND CAVALIERS FILE JOINT FEDERAL LAWSUIT AGAINST TICKETMASTER ALLEGING ANTI-COMPETITIVE AND MONOPOLISTIC PRACTICES

Lawsuit also claims Ticketmaster uses illegal practices preventing fans from benefiting from new technology that Ticketmaster does not provide

CLEVELAND - July 30th, 2007 - Flash 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.

The 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. Ticketmaster 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.

Sam 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."

“We 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.”

The 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.

Ticketmaster 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.

“The 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.”

Flash 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.

Season 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.

Ticketmaster’s contract with the Cavaliers prevents Flash Seats technology from being used for the resale of Cavaliers single-game tickets (tickets other than season ticket locations).

Ticketmaster 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.