On Tuesday, a New York judge temporarily blocked the New York Yankees from selling tickets previously held by season ticket holders tied to a New York ticket brokerage firm who allege the team unfairly canceled their tickets earlier this year.
“The court just granted a TRO (temporary restraining order) preserving 49 out of the 52 subscriptions which was a great result for us,” explained Larry Hutcher of Davidoff Hutcher & Citron LLP, lawyers for brokerage firm ASC. “What they are doing is preserving the tickets,” he said, adding “Pending the determination of the motion, the Yankees agree not to sell them or otherwise transfer them. So in the event that we are successful, the tickets will still be there and the Yankees can’t argue that our request for a release is moot because the tickets have already been sold.”
The legal decision by a Bronx County judge came one day after ASC filed a complaint in New York Supreme Court against Major League Baseball’s New York Yankees Partnership for revoking dozens of season tickets. Ticket brokerage ASC Ticket Co., co-owned by several brokers with a minority position held by Lee Shenker who left ASC for consolidation firm DTI in 2017, is seeking $1 million in damages after the team revoked 52 season tickets from the resellers, some of which were already sold to fans. For now, the injunction prevents the Yankees from selling the tickets while the case winds its way through the court.
“The Yankees have used a pretext to rescind tickets that were otherwise legally purchased solely because the plaintiffs are resellers. They are not permitted to do that. The plaintiffs have done nothing wrong,” Hutcher told Amplify. “They bought the tickets. They followed the rules and they are entitled to sell them or resell them as many times as they want without any fear that the Yankees can use that as an excuse to rescind these tickets.”
In the suit, lawyers for ASC said “The Yankees detest the free market” and reneged on the purchase “in order for the Yankees to hoard the tickets for themselves and charge artificially inflated prices to the detriment of (ASC) and the public at large.”
It continues “Despite the lengths that New York sports teams have gone to spread the false propaganda that ticket resellers are evil and the cause of inflated prices, it is the sports teams themselves who have sought to monopolize ticket sales and create price floors to artificially prop up the value of their tickets.”
According to the complaint, ASC lawfully purchased 52 season tickets from the Yankees for $440,885 in November of 2017. On Feb. 9, 2018, ASC received an email from Yankee’s representative Richard Granato stating that the tickets would be revoked because the “analytics team has determined that (ASC) buying behavior does not fit (the Yankee’s) criteria.”
The complaint reads “The Yankees’ so-called ‘criteria’ concerning Plaintiffs’ ‘buying behavior’ is obviously nothing more than a disguise for their illegal policy of targeting and taking inventory away from ticket resellers.”
“These are people that have done everything by the book. They followed the rules. They followed the Yankees’ regulations. All they want to be able to do is afford the rights that they are entitled to,” Hutcher said.
The suit further claims that the MLB partnership is in violation of reseller protections laid out in 2007 amendment to New York’s Arts and Cultural Affairs Law (ACAL). The ACAL expressly prohibits venue operators, such as the Yankees, from “restrict[ing] by any means the resale of any tickets included in a subscription or season ticket package as a condition of purchase [or] as a condition to retain such tickets for the duration of the subscription or season ticket package agreement.”
In addition, ASC is accusing the Yankees of breach of contract for revoking the tickets. The suit reads “After accepting and retaining ASC’s money for three months, it was not until February 2018 that the Yankees suddenly (and without prior warning) rescinded the Season Tickets.”
The plaintiffs are seeking a minimum of $1 million in damages, explaining that withdrawing tickets from purchasers erodes their trust in not only ASC but the secondary market.
“If the company can’t fulfill orders, it is going to adversely impact them with the consumers and the public on these ticket exchanges,” Hutcher said. “If you post a ticket, you need to be able to deliver them.”
In 2016, the Yankees signed a $100 million deal with StubHub, naming them the “official fan-to-fan ticket resale marketplace” of the team. The deal was a stunning reversal for the Yankees, who had been battling StubHub for years and had created its own gated ticket exchange, even banning print-at-home tickets as a way to keep tickets off of StubHub.
“The deal with the Yankees had nothing to do with the tickets or consolidated tickets,” Head of Global Communications for StubHub, Glenn Lehrman, told Amplify. “It is like our deal with any other major baseball team. It is a combination of revenue share on tickets and sponsorship. The only difference with the Yankees was when we renewed our deal with Major League Baseball in 2012, the Yankees had opted out. The deal in 2016 was the Yankees opting back in.”
The deal came just months after Yankees COO Lon Trost caused a mini-PR crisis after he criticized StubHub for allowing fans to buy premium tickets at cheap prices, forcing wealthy fans who paid full price to mingle with “someone who has never sat in a premium location.”
In November of 2017, MLB and StubHub announced a five-year renewal for StubHub to continue to serve as the Official Fan to Fan Ticket Marketplace of MLB.com and all 30 Major League Clubs.