()
COMMENT
REVOKING THE REVOCABLE LICENSE RULE: A NEW
LOOK AT RESALE RESTRICTIONS ON
SPORTS TICKETS
ALEXANDER P. FRAWLEY
†
Most sports fans consistently rely on the secondary ticket market. After all, the
secondary ticket market provides fans with numerous benefits, including the opportunity
to obtain tickets to sold out, high-profile events and the ability to resell tickets to recoup
the cost of a ticket for an event they cannot attend. But some key players—namely,
primary ticket sellers like sports teams—have lamented the rise of the secondary market,
complaining that resale exchanges unfairly profit from the teams’ labor and diminish the
value of buying tickets directly from the teams. Consequently, teams have begun to develop
new initiatives to curb the growth of the secondary market, including establishing official
team resale exchanges to compete with sites like StubHub, prohibiting season ticket
holders from selling tickets on unofficial resale exchanges, and implementing ticket
delivery procedures that make it more difficult to resell tickets. Fortunately for teams,
the law cuts squarely in their favor as courts, academics, and industry professionals
alike adhere to the late nineteenth century notion of tickets as fully revocable licenses.
As such, teams are free to impose resale restrictions as they see fit.
But in this Comment, I argue that lawmakers should reconsider the extent to which
teams can continue to use the revocable license rule to restrict ticket holders’ resale rights.
I show how the revocable license rule, though widely accepted today, was criticized and
often rejected by early twentieth century courts and academics for seemingly allowing
†
Executive Editor, Volume , University of Pennsylvania Law Review. J.D. Candidate, ,
University of Pennsylvania Law School; B.A., , Georgetown University. I would like to thank
Professor Eleanor Barrett for her tremendous support and invaluable feedback throughout the research
and writing process. I would also like to thank Aaseesh Polavarapu, Katherine Schloss, and all of my
colleagues on the University of Pennsylvania Law Review for their very helpful comments and edits.
Finally, I would like to thank my family. Thank you to my dad for instilling a love of sporting events in
me; my sister, Lea, for always inspiring me; my fiancée, Danielle, for enjoying buying tickets to games
on StubHub as much as I do; and my mom, for always pushing me to achieve my goals.
University of Pennsylvania Law Review [Vol. :
proprietors to unfairly and arbitrarily exclude innocent ticket-holding patrons. I then
explain how business incentives nevertheless prevented proprietors from abusing the rule
and how judges and lawmakers relied on the assumption that these incentives would
prevent the rule from being abused. In doing so, I show that the rule was actually
adopted for a very limited purpose—namely, to protect a proprietor’s right to exclude
unruly patrons. Given that limited purpose, I argue that courts and scholars have
gradually—but improperly—extended the rule of tickets as revocable licenses such that
primary ticket vendors now wield a type of unilateral power over ticket holders that the
original proponents of the rule never intended to establish. Therefore, I urge that
lawmakers stop allowing the notion of tickets as revocable licenses to inform the
industry’s discourse about ticket holders’ rights. Finally, I explore various practical
legislative solutions to reform the secondary market, which are free from the rigid
assumptions of the revocable license rule and which account for the legitimate concerns of
both ticket holders and teams.
I
NTRODUCTION .............................................................................
I. C
URRENT TEAM-IMPOSED RESALE RESTRICTIONS ..................
II. H
OW TEAMS GET AWAY WITH THIS: THE REVOCABLE
LICENSE RULE .........................................................................
A. The Revocable License Rule Today................................................
B. The Revocable License Rule Applied to Current Resale Restrictions
and Recent Litigation ..................................................................
III. T
HE ORIGIN OF THE REVOCABLE LICENSE RULE AND ITS
LIMITED INITIAL SCOPE ...........................................................
A. The Foundational Cases ...............................................................
B. Early Criticisms of the Rule and Departures from It ........................
. Policy Arguments Raised Against the Revocable License Rule ..
. Courts’ Limited Applications of Marrone ............................
. Courts’ Avoidance of Marrone’s Unjust Applications ...........
. England’s Abandonment of the Revocable License Rule
Due to Its Inequitable Implications ....................................
C. Reconsidering the Revocable License Rule’s Intended Purpose and Scope ..
IV. T
HE REVOCABLE LICENSE RULE’S CONTINUED VITALITY
IN THE
MODERN SECONDARY TICKET MARKET .......................
A. The Modern Secondary Ticket Market and Teams’ Strong Incentives
to Exploit the Revocable License Rule .............................................
B. The Need to Curb Teams’ Use of the Revocable License Rule in the
Modern Resale Context ................................................................
] Revoking the Revocable License Rule
C. Going Forward ..........................................................................
. Avoiding Rote Application of the Revocable License Rule ..
. Recommendations for Legislative Reform that Balances
Unfair Resale Restrictions with Unfair Ticket Scalping Profits ..
C
ONCLUSION ..................................................................................
I
NTRODUCTION
Sports in America make up a multibillion dollar industry, and teams generate
money from various sources, including ticket sales, concessions, television
contracts, licensing, and merchandise.
1
Major League Baseball (MLB), for
example, earned . billion in revenue during the baseball season, which
marked the thirteenth consecutive year that MLB saw an increase in total
revenue.
2
The New York Yankees, one of MLB’s most high-profile franchises,
earned million during the baseball season, of which million—over
%—came from ticket sales.
3
As revenue has grown, fans have literally paid the
price. On average, a family of four spent . to attend a New York
Yankees baseball game.
4
While Yankees tickets are the second-highest priced
tickets in MLB, the average cost of attending an MLB game for a family of
four still reaches an astonishing ..
5
These prices naturally lead to two questions for sports fans. First, what
happens when a ticket holder can no longer attend a game: is there a way for
him to recoup the cost of the tickets? Second, and relatedly, are there any ways
for fans on tighter budgets to purchase tickets at discounted prices? Fortunately,
fans in both situations can turn to the secondary ticket market.
6
One of the
1
Danette R. Davis, Comment, The Myth & Mystery of Personal Seat Licenses and Season Tickets:
Licenses or More?, S
T. LOUIS U. L.J. , ().
2
Maury Brown, MLB Sees Record Revenues for 2015, Up $500 Million and Approaching $9.5 Billion,
F
ORBES (Dec. , , : PM), http://www.forbes.com/sites/maurybrown////mlb-sees-record-
revenues-for--up--million-and-approaching---billion/print [https://perma.cc/UEE-KBK].
3
New York Yankees, FORBES, http://www.forbes.com/teams/new-york-yankees [https://perma.cc/
GCU-WHP].
4
See TEAM MKTG. REPORT, MLB (), https://www.teammarketing.com/public/uploaded
PDFs/MLB-FCI-.pdf [https://perma.cc/UZY-BZM] (providing the “Fan Cost Index” (FCI)
of attending a New York Yankees game, which includes the cost of four “adult average-price tickets,”
two “small draft beers,” four “small soft drinks,” four “regular-size hot dogs,” “parking for one . . . car,”
and two “least expensive, adult-size adjustable caps”).
5
See id.
6
See Susan Johnston Taylor, 9 Ways to Save on Sports Tickets, U.S. NEWS & WORLD REP. (Aug.
, , : PM), http://money.usnews.com/money/personal-finance/articles////-ways-to-
save-on-sports-tickets [https://perma.cc/SM-FCB] (noting that ticket holders who cannot attend
games “often resell their tickets on [secondary resale] websites like StubHub.com, TicketCity.com, or
eBay”). Fans can find tickets for prices below face value on the secondary market because ticket holders
who can no longer attend games “simply want[] to get rid of” their tickets. Id. “Face value” refers to the
price that is printed on the ticket and charged by a primary ticket vendor, such as a sports team.
University of Pennsylvania Law Review [Vol. :
more popular secondary market exchanges, StubHub.com, provides an online
marketplace that connects fans seeking to sell tickets with fans seeking to
purchase tickets to various kinds of entertainment events, including sports
games, concerts, and theater performances.
7
At rst glance, the proliferation of secondary-ticket-market websites like
StubHub seems nancially benecial for ticket holders trying to sell tickets,
fans seeking to purchase tickets, and primary ticket sellers such as teams and
sports leagues.
8
Ticket holders can recoup some of their money for games
they cannot attend, and some may even earn a prot when selling tickets to a
particularly popular event.
9
Likewise, fans searching for tickets sometimes
save money on the face value price by using the secondary market instead of
buying directly from the team.
10
Moreover, fans that are unable to secure
tickets during a venue’s original public sale can use the secondary market to
buy tickets for sold out events without having to worry about the risk of
buying a fake ticket from a ticket scalper outside of the stadium.
11
Finally,
many sports teams and leagues have formed mutually benecial agreements
with StubHub, which require those teams to direct ticket holders and ticket
7
About Us, STUBHUB, http://www.stubhub.com/about-us/ [https://perma.cc/CGT-SEJR].
StubHub generates revenue by charging fees to both the buyer and seller. James Geddes, How to Sell
Concert or Event Tickets on StubHub, T
ECH TIMES (May , , : AM), http://www.techtimes.
com/articles///how-to-sell-concert-or-event-tickets-on-stubhub.htm [https://perma.cc/ZP-
HHND]. For the seller fee, StubHub collects % of the sale price. Brett Goldberg, StubHub Fees | The
Truth About Buyer and Seller Fees, T
ICKPICKBLOG (Aug. , ), https://blog.tickpick.com/stubhub-
buyer-seller-fees [https://perma.cc/WR-HDS]. In addition, StubHub charges the buyer a fee that is
between % and % of the sale price. Id. For example, on a sale, the buyer could pay up to . In
that case, the seller would collect , and StubHub would retain the remaining .
8
In this Comment, the “primary” ticket market refers to ticket sales by teams directly to fans who,
upon purchase, become ticket holders. The “secondary” ticket market refers to transactions between ticket
holders and fans seeking to purchase tickets.
9
As an example, tickets for one very high-demand game between the New York Yankees and
their rival, the Boston Red Sox, sold on StubHub for over % of the face value price. Bill King &
Eric Fisher, Second Thoughts, STREET & SMITH’S SPORTSBUSINESS J. (Oct. , ), http://www. sports
businessdaily.com/Journal/Issues////In-Depth/Main.aspx [https://perma.cc/NA-LD].
10
See Matthew Feuerman, Note, Court-Side Seats? The Communications Decency Act and the Potential
Threat to StubHub and Peer-to-Peer Marketplaces, B.C.
L. REV. , () (“[W]hen the supply of
tickets greatly exceeds the demand, StubHub is home to ticket prices that are far below face value.”).
11
For many high-prole, sold out events, such as the Super Bowl, demand for tickets “greatly
exceeds supply.” Id. at . Tickets to the Super Bowl were sold on StubHub for an average
price of , even though the face value prices ranged from to for general admission
and up to for premium seating. Brent Schrotenboer, Getting into Super Bowl 50 a Tricky Ticket,
USA TODAY (Feb. , , : PM), http://www.usatoday.com/story/sports/n////super-
bowl--tickets-secondary-market-stubhub/ [https://perma.cc/K-NEV]. Secondary ticket
market websites allow fans to purchase tickets for these kinds of events without having to worry about
the risk of being duped into purchasing fake tickets. See, e.g., The StubHub FanProtect Guarantee, S
TUBHUB,
http://www.stubhub.com/legal/?sectionfp [https://perma.cc/PXA-LXY] (guaranteeing comparable
tickets or a full refund to purchasers when tickets are fraudulent, not delivered in time, or deviate from
those listed by the seller).
] Revoking the Revocable License Rule
seekers to StubHub in exchange for a percentage of the transaction fees that
StubHub charges to fans. For example, “StubHub is the [o]fficial [f]an to [f]an
[t]icket [m]arketplace of MLB.com.”
12
Under its agreement with MLB, StubHub
sends more than half of its commission fees for MLB tickets to MLB, which
then distributes some of that money to all thirty MLB teams.
13
In ,
StubHub sent roughly million to MLB as part of the agreement.
14
Thus,
secondary ticket venues like StubHub seem beneficial for ticket holders, ticket
seekers, and teams.
Nevertheless, some key players do not view the secondary market
favorably—namely, many primary ticket vendors, such as sports teams. Derek
Schiller, an Atlanta Braves marketing executive, has referred to the proliferation
of secondary market ticket sales as the “bigge[st] threat to the professional
team sports marketplace and industry as a whole.”
15
In , eight million
MLB tickets were sold on StubHub.
16
This gure amounts to an average of
roughly tickets per MLB game or ten percent of the average per game
attendance.
17
These numbers trouble team executives, who believe that the
secondary market has transformed from its original purpose—“a place where
fans could pay a premium for great seats at hard-to-crack events”—to “a ea
market where buyers have their pick from thousands of seats to many games,
often at prices that compete with, or even beat, the prices oered by the
teams.”
18
For example, Robert Alvarado, Vice President of Marketing and
Ticket Sales for the Los Angeles Angels, laments StubHub’s rise from a
“small player” to a legitimate threat that is “killing us.”
19
In other words,
teams believe that secondary ticket exchanges like StubHub harm teams by
drawing away fans who traditionally bought tickets for non–sold out games
directly from teams.
20
The idea is that for every ticket bought on StubHub,
there is one less ticket sale for a team.
12
StubHub Seller FAQ, MLB.COM, http://mlb.mlb.com/ticketing/stubhub_faq_seller.jsp?c_id
mlb [https://perma.cc/PQR-VDK].
13
King & Fisher, supra note .
14
Id. MLB and StubHub agreed to a five-year renewal of their partnership in late , assuring that
StubHub would continue to serve as the league’s official reseller through the baseball season. MLB
Renews Deal with StubHub, ESPN
(Dec. , ), http://www.espn.com/mlb/story/_/id//major-
league-baseball-stubhub-renew-secondary-ticket-market-deal [https://perma.cc/YL-CQMT].
15
King & Fisher, supra note .
16
Id.
17
Id.
18
Id.
19
Id. Of course, not every team is critical of the secondary ticket market. See, e.g., id. (noting that
Derrick Hall, President and CEO of the Arizona Diamondbacks, embraces StubHub because it helps
the team reach their attendance goals).
20
See, e.g., Josh Kosman, Yanks Rip StubHub for Not Great-Gate, N.Y. POST (June , ),
http://nypost.com////yanks-rip-stubhub-for-not-great-gate/ixzzxtLgth [https://perma.cc/
LL-YYJ] (“Yankee Stadium attendance is down . percent so far this year . . . and the team is blaming
University of Pennsylvania Law Review [Vol. :
Primary ticket sellers have responded accordingly, developing new initiatives
that both curb the growth of the secondary market and capture a greater
share of the profits that inevitably flow from secondary ticket sales. Some
teams have established their own official secondary ticket exchanges and now
prohibit season ticket holders from using unofficial exchanges.
21
Others have
implemented new ticket delivery mechanisms aimed at limiting opportunities
for resale.
22
These attempts to restrict ticket holders’ resale opportunities
have generated significant attention in the sports industry.
23
The issue is
arguably the “most high-profile [topic that] the ticketing world has seen”
because it involves the critical questions of “whether the fan or the team
owns the right to the ticket and whether teams can legally restrict fans to
venues for reselling their seats.”
24
This question naturally raises another: what rights, if any, inhere in the
possession of a ticket? A survey of contemporary scholarship and case law
suggests a clear answer: not many. “[C]ourts have uniformly recognized that
tickets are revocable licenses,” subject to the will of the grantor, and that resale
StubHub for its gate woes.”); see also Barry Petchesky, The Market for Yankees Tickets Is Worse than We Thought,
D
EADSPIN (June , , : PM), http://deadspin.com//the-market-for-yankees-tickets-is-worse-
than-we-thought [https://perma.cc/HVN-XWRX] (referencing data showing that in , .% of
Yankees tickets sold on the secondary market were sold for lower than face value prices and that tickets were,
on average, sold at a % discount from the face value price). MLB’s five-year renewal agreement with
StubHub requires that all tickets be sold for at least . MLB Renews Deal with StubHub, supra note .
This measure is meant to assuage teams’ concerns about seeing their tickets listed for “pocket change.” Id.
But it should not be interpreted as a price floor or a minimum amount at which a ticket may be listed for
sale. See infra note . Instead, the minimum is purely an “optic[al]” measure since the includes users’
commissions and delivery fees, which were previously only assessed to buyers at checkout time—after they
selected their tickets. MLB Renews Deal with StubHub, supra note . In fact, under the previous agreement,
all buyers, regardless of the selling price, were charged at least . because of delivery and commission
fees that were added to the total price. Id. The new deal also includes lower service and delivery fees for
users. Wendy Thurm, MLB Re-Ups with StubHub but Yankees, Others Opt Out, F
ANGRAPHS (Dec. , ),
http://www.fangraphs.com/blogs/mlb-re-ups-with-stubhub-but-yankees-others-opt-out [https://perma.cc/
QJX-NRN]. Thus, the agreement did not increase the ultimate price that baseball fans were
paying to buy tickets on StubHub; rather, in some cases, the price actually decreased.
21
See infra Part I.
22
See infra Part I.
23
See, e.g., ANTHONY J. DREYER & KAREN HOFFMAN LENT, SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP, KEY TAKEAWAYS: THE EMERGING LEGAL LANDSCAPE REGARDING
TICKET SALES: WHAT EVERY SPORTS/EVENT ORGANIZER OR VENUE NEEDS TO KNOW -
(), https://www.skadden.com/sites/default/files/publications/NY_Emerging_Legal_Landscape_
Webinar_Takeaway_.pdf [https://perma.cc/MG-NDW] (discussing the antitrust implications
of team policies that limit the extent to which ticket holders can resell their tickets on the secondary
market); Shepard Goldfein & James Keyte, Sports Tickets: Revocable Licenses or Rights to Resale?, N.Y.
L.J.
(Apr. , ), http://www.newyorklawjournal.com/id/Sports-Tickets-Revocable-
Licenses-or-Rights-to-Resale?slreturnixzzDHHmgG [https://perma.cc/MAH-
EV] (discussing various types of resale restrictions that teams impose on ticket holders).
24
Darren Rovell, StubHub’s Antitrust Lawsuit Against Warriors, Ticketmaster Dismissed, ESPN (Nov.
, ), http://espn.go.com/nba/story/_/id//stubhub-antitrust-lawsuit-golden-state-warriors-
ticketmaster-dismissed [https://perma.cc/RTV-YVV].
] Revoking the Revocable License Rule
limitations and other team-imposed conditions “generally are fully enforceable.”
25
Stephen Happel and Marianne M. Jennings explain,
[O]wners of professional sports teams state that consumers actually
purchase a “license” to a seat and the license is subject to certain rules.
If the ticket is treated as a license, owners use their right of revocation
of these licenses of those season ticket holders
who try to resell tickets
at above face-value to games they cannot or do not want to attend.
26
The revocable license characterization provides teams with a very potent weapon
since, as a matter of property law, revocable licenses can be terminated by the
grantor at any time and for any reason.
27
The notion of sports tickets as revocable licenses has led courts to uphold
various team-imposed restrictions on ticket holders, including resale restrictions.
28
Not surprisingly, teams have begun to use the revocable license language in their
season ticket holder policies and agreements.
29
Thus, both common law property
doctrines and standard contemporary contractual agreements between season
ticket holders and teams support primary sellers’ efforts to restrict ticket resellers.
StubHub and other resale sites do not seem to stand much of a chance.
But in this Comment, I argue that lawmakers should reconsider the extent
to which they allow teams to continue to use the revocable license rule to
restrict ticket holders’ resale rights. In Part I, I provide an overview of the
measures that teams have implemented to restrict the resale of tickets. In Part
II, I explain how the concept of tickets as revocable licenses has played a key
role in establishing and perpetuating an industry-wide norm that favors teams’
rights over those of their fans—especially in the resale context—and I show
how teams continue to rely on that concept to defend resale restrictions.
25
Anthony J. Dreyer & Mitchell P. Schwartz, Whose Game Is It Anyway: Sport Teams’ Right to
Restrict (and Control) Ticket Resale, F
ORDHAM INTELL. PROP. MEDIA & ENT. L.J. , ().
26
Stephen Happel & Marianne M. Jennings, The Eight Principles of the Microeconomic and
Regulatory Future of Ticket Scalping, Ticket Brokers, and Secondary Ticket Markets, J.L.
& COM. , -
(). The notion of tickets as licenses has been applied to both season ticket subscriptions and individual
game tickets. But in the resale context, the concept has been more influential in disputes concerning season
ticket agreements. Teams have more leverage to impose restrictions on season ticket holders than on fans
who merely purchase single-game tickets. For example, teams have threatened to revoke a fan’s season tickets
or refused to renew a fan’s tickets the following season. See, e.g., infra text accompanying notes –.
27
Marrone v. Wash. Jockey Club, U.S. , - ().
28
See infra text accompanying notes –.
29
See, e.g., Season Ticket Holder Terms and Conditions, PHILA. FLYE RS, http://yers.nhl.com/v/
ext/STH_TandC_FINAL.pdf [https://perma.cc/BQ-JMA] (“Each ticket purchased
as part of your Season Ticket Plan . . . constitutes a revocable license. As a revocable license, each
Ticket may be revoked at any time . . . for any reason . . . .”); Terms & Conditions Relating to Golden State
Warri ors Ticket Plans, W
ARRIORS.COM, http://www.nba.com/warriors/tickets/ticket_terms_and_conditions.
html [https://perma.cc/PVH-LCPA] (“Ticket plans and all rights attendant thereto are owned by the
Warriors. Ticket plans are revocable licenses . . . .”).
University of Pennsylvania Law Review [Vol. :
In Part III, I illustrate how the revocable license rule, though widely
accepted today, has always rested on questionable grounds. Indeed, the
characterization of tickets as revocable licenses was criticized and often
rejected by early twentieth century courts and academics for seemingly
providing a legal justication to proprietors who wished to arbitrarily exclude
innocent ticket-holding patrons. But business incentives generally prevented
early twentieth century proprietors from abusing the rule to the detriment of
innocent patrons. In turn, I argue that early proponents of the rule had reason
to ignore its dangerously wide scope and that the rule was originally adopted
for a very limited purpose—namely, to protect a proprietor’s right to exclude
unruly patrons by ensuring that no jury could ever nd against a proprietor
in that situation.
In Part IV, I contend that courts and scholars have gradually—but
improperly—extended the rule of tickets as revocable licenses such that
primary ticket vendors now wield a kind of unilateral power over ticket
holders that the original proponents of the rule never intended to establish.
This is especially concerning in the current secondary resale market because
teams are now confronted with signicant nancial incentives to exploit the
revocable license rule to the fullest extent possible. Thus, the modern ticket
market is missing one of the critical assumptions that supported the rule’s
original adoption: the belief that proprietors would not use the rule to
legitimize unjust practices. Therefore, I argue that lawmakers should stop
allowing the notion of tickets as revocable licenses to inform the industry’s
conception of ticket holders’ rights. Finally, freed from the rigid and outdated
assumptions of the revocable license rule, I explore what can be done going
forward to account for the legitimate concerns of both ticket holders and
teams, and I propose various legislative solutions. Most importantly, my goal
is to inspire lawmakers to reconsider the continued viability of the revocable
license rule. This early twentieth century characterization should not dictate
our approach to twenty-rst century issues.
I. C
URRENT TEAM-IMPOSED RESALE RESTRICTIONS
As teams’ concerns with secondary resales have grown, some have begun to
implement initiatives to address the secondary market’s effect on their businesses.
These efforts have ranged from establishing separate team-managed resale
exchanges—while prohibiting ticket holders from using other sites—to adopting
ticket delivery policies that functionally limit fans’ ability to transact on the
secondary market. By restricting ticket holders’ resale rights and capabilities, teams
hope to both curb the proliferation of the secondary ticket market and capture
a greater portion of secondary resale revenues.
] Revoking the Revocable License Rule
For example, the Golden State Warriors of the National Basketball
Association (NBA) formed an ocial secondary ticket exchange through a
partnership with Ticketmaster, and the team prohibits season ticket holders
from selling tickets on unocial exchanges like StubHub. Fans have alleged
that the team “contractually require[s] that the resale of Warriors tickets be
eectuated only through Ticketmaster’s Secondary Ticket Exchange” and
enforces this requirement by cancelling the ticket subscriptions of fans who
resell their Warriors tickets through a nonaffiliated secondary ticket exchange.
30
Likewise, the New Jersey Devils of the National Hockey League (NHL) have
allegedly refused to renew season ticket subscriptions of fans whom they
catch selling tickets on secondary market websites.
31
These policies pressure
fans into using team-managed ticket exchanges.
Relatedly, the Minnesota Timberwolves—also of the NBA—have used
the Flash Seats ticket platform to implement a paperless ticket policy that
requires ticket holders to use a smart phone or present a driver’s license or
credit card to gain entry to the arena.
32
The team requires that all resales be
conducted through its ocial Flash Seats platform, which maintains a %
price oor.
33
Moreover, like fans who purchase through Flash Seats, season
ticket holders who buy directly from the team do not actually receive tickets;
they simply enter the arena by presenting their credit card or identication.
34
Because Timberwolves fans do not have access to any type of physical or
digital ticket that can be transferred to someone else, season ticket holders
cannot sell tickets on sites like StubHub and are forced to use the team’s Flash
Seats platform.
Other teams, stopping short of entirely restricting ticket sales on secondary
market sites, have implemented policies that functionally limit a ticket holder’s
ability to resell tickets. For example, before the season, the San Francisco
ers of the National Football League (NFL) transitioned away from issuing
traditional hard stock tickets to season ticket holders by implementing an
30
StubHub, Inc. v. Golden State Warriors, LLC, No. -, WL , at * (N.D.
Cal. Nov. , ).
31
Zachary Zagger, NJ Devils Sued for Restricting Season Ticket Resales, LAW (Apr. , ,
: PM), http://www.law.com/articles//nj-devils-sued-for-restricting-season-ticket-resales
[https://perma.cc/YPN-ML].
32
Timberwolves Season-Ticket Holders Sue Team over Ticket Policy, SPORTS ILLUSTRATED
(Mar. , ), http://www.si.com/nba////minnesota-timberwolves-ticket-policy-fans-lawsuit
[https://perma.cc/JKP-JTJ].
33
Id. A price oor, a minimum dollar amount for which a ticket can be listed, sometimes
precludes sellers from choosing a price level that buyers nd appropriate for a low-demand game
and, as a result, limits the extent to which secondary sales detract from the team’s primary ticket
selling eorts. Id.
34
Id.
University of Pennsylvania Law Review [Vol. :
exclusive electronic delivery method.
35
In addition, the team refuses to release
tickets to ticket holders until seventy-two hours before each game,
36
severely
limiting the amount of time ticket holders have to freely resell their tickets.
The ers do allow fans to resell tickets in advance of the seventy-two hour
window through the team’s ocial resale exchange, but the team does not
actually release the tickets until three days before each game.
37
As a result,
before the three-day window, ticket holders cannot use unocial exchanges
like StubHub because they do not have access to their tickets and are
therefore unable to post them for sale.
Similarly, for more than three years,
38
the New York Yankees ran their
own team-managed secondary ticket exchange that competed with secondary
resale sites like StubHub. In , both the Yankees and the Los Angeles
Angels opted out of MLB’s new agreement with StubHub.
39
A spokesperson
for the Yankees defended the move by predicting that the team would be able
to lift attendance by fans per game by disaliating from StubHub.
40
In
addition, the Yankees were reportedly upset that tickets for Yankees games
were often available on StubHub for less than ., which is signicantly
below the team’s lowest face value price.
41
Months later, the Yankees announced
a new partnership with Ticketmaster and the launch of the Yankees Ticket
Exchange, “the only official online resale marketplace for Yankees fans to
purchase and resell tickets to Yankees games.”
42
Unlike StubHub, the Yankees
Ticket Exchange set a price floor for every game.
43
By preventing tickets from
being listed for bargain basement price levels, the price floor limited the extent to
which secondary sales undercut primary ticket sales. Moreover, the arrangement
35
Chris Nguyen, Many Unhappy San Francisco 49ers Fans Selling Season Ticket Licenses, ABC
NEWS (Sept. , ), http://abcnews.com/sports/many-unhappy-ers-fans-selling-season-ticket-
licenses/ [https://perma.cc/WGU-LMJP].
36
Id.
37
Je Zalesin, 49ers Fans Say Season Ticket Resale Rule Harms Competition, LAW (Aug. ,
, : PM), http://www.law.com/articles//ers-fans-say-season-ticket-resale-rule-harms-
competition [https://perma.cc/WGU-LMJP].
38
In June , the Yankees and StubHub announced a six-year agreement to make StubHub the
team’s official reseller once again. See infra text accompanying notes –. The agreement includes a
% price floor. See infra text accompanying note . Evidence suggests that the price floor will result in
hundreds of tickets per game being listed for prices that exceed their true market value. See infra text
accompanying note .
39
Yankees Close to Deal with Ticketmaster After Opting Out of StubHub Contract, STREET &
SMITH’S SPORTSBUSINESS DAILY (Dec. , ), http://m.sportsbusinessdaily.com/Daily/Issues///
/Franchises/Yankees.aspx [https://perma.cc/KMT-LQGK].
40
Id.
41
Thurm, supra note .
42
Press Release, N.Y. Yankees, Yankees Announce Launch of Ocial Yankees Ticket Exchange
for Fans (Feb. , ), http://m.mlb.com/news/article//yankees-announce-launch-of-official-
yankees-ticket-exchange-for-fans [https://perma.cc/UZ-VNG].
43
Jared Diamond, A Pitched Battle over Yankees’ Ticket Policy, WALL ST. J., Feb. , , at A.
] Revoking the Revocable License Rule
was benecial to the Yankees because the team kept all of the transaction fees
charged to fans buying and selling tickets on the Exchange rather than sharing
the revenue with StubHub. While fans could still buy and sell Yankees tickets
on StubHub, the Exchange made doing so a much less convenient option.
44
Relatedly, starting with the season, the Yankees further undercut
secondary sales on nonaffiliated exchanges by refusing to accept print-at-home
tickets.
45
This new policy was a “huge blow” to StubHub since StubHub
“primarily uses print-at-home tickets.”
46
In other words, the Yankees eliminated
one of StubHub’s best features—namely, the ability to simply print out a ticket
rather than waiting for it in the mail or picking it up in person.
The new policy
required fans to use traditional hard stock tickets or mobile tickets through a
smartphone.
47
But the mobile ticket option was only available to fans who
purchased directly from the Yankees or through the Yankees Ticket Exchange.
48
Thus, the sale of Yankees tickets on StubHub was limited to old-fashioned hard
stock tickets. Sellers would have to physically mail their tickets, an inconvenience
that fans “lamented” since they could “no longer do what they had done for
years—print out tickets at home.”
49
The team attributed the new policy to
44
The Exchange used an exclusive barcode transfer system, which allowed a seller to simply
type in the ticket’s barcode and a buyer to download the tickets or pick them up at the stadium.
Patrick Wall, Yankees Balk at New StubHub Ticket Pick-Up Center Outside Stadium, DNA
INFO (Feb. ,
, : AM), https://www.dnainfo.com/new-york//concourse/yankees-balk-at-new-stubhub-
ticket-pick-up-center-outside-stadium [https://perma.cc/UCM-YSA]. These benefits were exclusive to the
Exchange and were meant to “lure fans from StubHub”: Yankees tickets could not be electronically
delivered through StubHub unless the seller already had an electronic version of the ticket that could
be directly uploaded to the site, in contrast to indirectly uploading the ticket by typing in the barcode
found on both electronic tickets and physical, hard stock tickets. See id. The Exchange’s electronic
transfer system mirrored StubHub’s agreement with MLB, which allows StubHub to perform a similar
electronic delivery service for the tickets of teams that have not opted out of the deal. StubHub Seller
FA Q, supra note .
45
Press Release, N.Y. Yankees, Yankees Announce On-Sale Dates for Regular Season
Individual Game Tickets (Feb. , ), http://m.yankees.mlb.com/news/article/ [https://
perma.cc/UZ-VNG].
46
You’re Outta Here: Yankees Discontinue Print-at-Home Tickets, CBS N.Y. (Feb. , , : PM),
http://newyork.cbslocal.com////youre-outta-here-new-york-yankees-discontinue-print-at-
home-tickets [https://perma.cc/WY-K].
47
Mark Emery, By Banning Print-at-Home Tickets, Yankees Hurt Fans Served by StubHub’s Open
Market, N.Y.
DAILY NEWS (Feb. , , : PM), http://www.nydailynews.com/sports/baseball/yankees/
banning-print-at-home-tickets-yankees-hurt-fans-stubhub-article-. [https://perma.cc/PW-S].
48
Id.
49
Seth Berkman, StubHub Will Serve as Yankees’ Ticket Reseller, N.Y. TIMES (June , ),
http://www.nytimes.com////sports/baseball/yankees-and-stubhub-announce-a-ticket-part
nership.html [https://perma.cc/KW-ZXXD]. In response, StubHub established a last-minute ticket
center close to Yankee Stadium in time for the season. See Nate Schweber, Some Yankees Tickets
Require a Long Walk, N.Y.
TIMES (Apr. , ), http://www.nytimes.com////sports/baseball/
some-yankees-tickets-require-a-long-walk.html [https://perma.cc/BVU-YFQT]. This allowed sellers to
ship the tickets to StubHub before a secondary buyer even decided to purchase them. See id. Fans
could then purchase tickets very close to the time of the event and pick them up just before the
University of Pennsylvania Law Review [Vol. :
consumer protection concerns, insisting that the use of print-at-home tickets
inevitably leads to fraud,
50
but many believed that the Yankees actually
implemented the policy to deter sales on StubHub.
51
The idea was that the
Yankees were making it more dicult for fans to use StubHub so that they
would move their business to the Yankees Ticket Exchange.
Finally, in June , after “years of feuding” with StubHub, the Yankees
announced that they reached an agreement with StubHub for the reseller to
become their official secondary ticket exchange.
52
Both sides have agreed to
split the profits from the resale of tickets, and the Yankees are guaranteed at
least million over the course of the six-year agreement.
53
Most importantly,
the agreement includes a price floor of % of the face value of each ticket, a
departure from StubHub’s tradition of promoting “an open marketplace
[without price floors], where the public [demand] sets the price.”
54
In other
words, despite re-affiliating with StubHub, the Yankees are maintaining
extensive control over the resale of their tickets and, in doing so, significantly
detracting from their fans’ ability to buy and sell tickets at market-level prices.
55
II. H
OW TEAMS GET AWAY WITH THIS:
THE REVOCABLE LICENSE RULE
Fortunately for teams, the law appears to support their eorts to restrict
ticket holders’ resale rights. In this Part, I explore the legal justications that
teams use to defend these restrictions. I begin by discussing what is widely
considered the uncontroversial black letter law of ticket holder rights—namely,
the revocable license rule—and I explain how courts consistently apply this
game. See id. But many Yankees fans were frustrated by this arrangement. See id. (explaining fans’ frustration
with their inability to print their tickets from the StubHub website and describing the unpleasantly long
and “frigid walk” from the st Street Yankee Stadium subway stop to the StubHub ticket office).
50
Press Release, N.Y. Yankees, supra note .
51
See, e.g., Matt Bonesteel, Here’s Why the Yankees Are Getting Rid of Print-at-Home Tickets,
W
ASH. POST (Feb. , ), https://www.washingtonpost.com/news/early-lead/wp////heres-
why-the-yankees-are-getting-rid-of-print-at-home-tickets [https://perma.cc/EB-VC] (“[T]he Yankees
probably have an ulterior motive for this, namely that they’ve been at war with StubHub for years now.”); see
also Berkman, supra note (“[M]any perceived the new policy as a way to exclude StubHub from a good
chunk of the Yankees’ ticket market because StubHub did not have the means to distribute Yankees
tickets through mobile devices.”). Even scholars are generally skeptical of primary ticket sellers’ stated
consumer protection justifications for resale restrictions. See, e.g., Happel & Jennings, supra note , at
(explaining that while primary ticket sellers’ efforts to limit the operations of the secondary market
“are ostensibly made in the name of consumer protection,” the “ultimate effects are limited consumer
options through reduced competition”).
52
Berkman, supra note .
53
Id.
54
Id.
55
See infra note and accompanying text for an explanation of how the price oor will
negatively aect fans.
] Revoking the Revocable License Rule
rule in favor of teams and to the detriment of fans. I then discuss recent litigation
concerning the types of resale restrictions described in Part I, showing how
teams continue to rely on the revocable license rule to justify these restrictions.
Likewise, I explain how industry insiders widely accept the revocable license rule
as the governing principle of ticket holder rights.
A. The Revocable License Rule Today
The current black letter law of ticket holder rights is that tickets are mere
licenses, revocable at the will of the proprietor. The rule can be traced to the
Supreme Court’s decision in Marrone v. Washington Jockey Club.
56
In Marrone,
the Court held that the defendant-proprietor was free to exclude the plaintiff
from a racetrack despite the plaintiff’s lawfully purchased ticket.
57
The plaintiff
was not entitled to specific performance, and the Court strictly limited any
damages to the face value price of the ticket.
58
The Court reached this conclusion
because the “ticket was not a conveyance of an interest in the race track.”
59
Instead, the ticket was a mere license to enter someone else’s property for a
limited period of time.
60
The ticket could be revoked at any time because the
ticket holder did not actually have a property-based right to attend the event.
61
This notion of tickets as fully revocable licenses is now widely accepted
by academics and industry professionals as the governing rule for property
rights in tickets.
62
As such, the rule provides teams with valuable legal ammunition
in their efforts to restrict ticket holders’ resale rights. As Shepard Goldfein and
James Keyte—two prominent sports attorneys—explain, “Historically, courts
have viewed an event ticket as a revocable license to attend an event, with no
absolute right to sell or transfer that license.”
63
Thus, courts have consistently
invoked the revocable license rule to uphold team-imposed resale restrictions.
For instance, in Soderholm v. Chicago National League Ball Club, Inc., the court
upheld the Chicago Cubs’ decision to refuse to renew the plainti’s season
tickets.
64
The Cubs made the decision after learning that the plainti resold
some of his tickets for higher than face value prices, a violation of the team’s
56
U.S. ().
57
Id. at -.
58
Id.
59
Id. at .
60
Id. at .
61
Id. at -.
62
See, e.g., Dreyer & Schwartz, supra note , at (“Since at least as far back as , courts
have held that an admission ticket to an entertainment venue is a license of a personal nature, and
is freely revocable . . . .”); see also Davis, supra note , at & n. (citing Marrone for the “commonly
accepted rule” that a ticket is nothing more than a license to witness a specific performance, which the
proprietor may revoke at will for any reason).
63
Goldfein & Keyte, supra note .
64
N.E.d , (Ill. App. Ct. ).
University of Pennsylvania Law Review [Vol. :
resale policy.
65
The court rejected the plainti ’s characterization of the season
ticket plan as a lease or option contract and denied his action for specic
performance to compel renewal.
66
Instead, the court held that a season ticket
plan constitutes nothing more than a “series of [revocable] licenses” that
permit an individual to attend a specic game in a specic seat.
67
Similarly, People v. Waisvisz upheld the constitutionality of a ticket scalping
law and dismissed the defendant’s objection that the law unconstitutionally
granted event sponsors “the power to determine who will be allowed to engage
in the business of ticket brokering.”
68
The court explained that the Illinois
statute, which prohibited ticket resales for higher than face value prices, merely
“g[ave] effect to the[] common law rights” of ticket holders: “A ticket to a
sporting or entertainment event is a license which may be revoked at the will
of its issuer.”
69
Consequently, “an event sponsor may impose restrictions on the
transferability of tickets which it issues.”
70
Likewise, in In re Harrell, the Ninth Circuit held that under Arizona law,
a trustee could not sell a debtor’s opportunity to renew Phoenix Suns season
tickets because “the debtor’s revocable opportunity to renew season tickets is
not a property right.”
71
Furthermore, in Kully v. Goldman, the Supreme Court
of Nebraska refused to enforce an agreement between fans for the permanent
sale of an option to renew football season tickets because the current ticket
holder’s expectation that he would be oered the same seats each year “was
not . . . a property right which he could enforce.”
72
Most recently, in Frager v.
Indianapolis Colts, Inc., the Southern District of Indiana cited the revocable
license rule in granting the Colts’ motion to dismiss a lawsuit brought by a
former season ticket holder after the team declined to renew his ninety-four
season tickets.
73
These examples show that courts have consistently applied the
revocable license rule beyond the resale context to resolve other disputes
65
Id. at .
66
Id. at -.
67
Id.
68
N.E.d , (Ill. App. Ct. ).
69
Id.
70
Id.
71
F.d , (th Cir. ).
72
N.W.d , (Neb. ).
73
No. :-cv-, WL , at *- (S.D. Ind. Nov. , ), appeal docketed, No.
CV (th Cir. Dec. , ); see also Zachary Zagger, Colts Accused of Not Renewing Broker’s Season
Tickets, L
AW (Mar. , , : PM), https://www.law.com/articles//colts-accused-of-not-
renewing-broker-s-season-tickets [https://perma.cc/YJY-SBGX] (“An Indianapolis Colts season
ticket broker sued the football team in Indiana federal court . . . , alleging the Colts have refused to
renew his season tickets for the upcoming season . . . .”). The plainti subsequently appealed the
decision to the Seventh Circuit. Zachary Zagger, Broker Takes Colts Season Ticket Fight to 7th Circ.,
L
AW (Dec. , , : PM), https://www.law.com/articles//broker-takes-colts-season-
ticket-ght-to-th-circ [https://perma.cc/NTH-UZS].
] Revoking the Revocable License Rule
between fans and teams in favor of the latter.
74
Thus, notwithstanding a few
exceptions,
75
courts have routinely applied the rule in favor of teams and to
the detriment of ticket holders and fans.
74
See Pollock v. Nat’l Football League, F. App’x , (d Cir. ) (affirming dismissal
of the Super Bowl ticket–purchasing plaintiffs’ negligent misrepresentation claim, which stemmed
from the NFL’s failure to provide the specifically purchased seats, and requiring the plaintiffs to sue
under contract for the face value of the tickets because “the entire suit [wa]s grounded in the purchase
of tickets, commonly regarded as revocable licenses”); Johnston v. Tampa Sports Auth., F.d ,
(th Cir. ) (reversing lower court decision finding that a mandatory pat-down policy for entry
to a stadium violated the Fourth Amendment because, under the totality of the circumstances, the ticket
holder consented to the pat-down, and tickets to NFL games grant the holder “at most a revocable
license to a seat,” meaning the team “retained the right to exclude him from the Stadium for any
reason”); Yarde Metals, Inc. v. New England Patriots Ltd. P’ship, N.E.d , -, (Mass.
App. Ct. ) (observing that the “purchase of a ticket to a sports or entertainment event typically
creates nothing more than a revocable license” and affirming dismissal of season ticket holder’s suit
against the New England Patriots for revoking season tickets after plaintiff’s friend, while using
plainti’s tickets, misbehaved by throwing bottles); Bickett v. Bualo Bills, Inc.,
N.Y.S.d ,
- (N.Y. Sup. Ct. ) (holding that since admission tickets are revocable licenses, the Buffalo
Bills could cancel games during a player’s strike without breaching any contractual duties to its ticket
holders); cf. Williams v. Nat’l Football League, No. -, WL , at * (W.D. Wash. Oct.
, ) (finding that the Clayton Act does not apply to football tickets since they are revocable licenses
and dismissing visiting team fan’s antitrust claims against the team for its policy of limiting playoff
ticket purchases to fans who reside in the home team’s area).
75
Davis highlights two cases in which bankruptcy courts have found a property-based interest in
season tickets to argue that “courts have begun to look beyond the contract terms to the policies of the
teams” and “find weight in the intangible expectation of renewal created by season ticket holder status.”
Davis, supra note , at . For example, in In re I.D. Craig Service Corp., the court looked beyond the
language on each ticket, which indicated that the ticket was a revocable license, because the team’s
policies and actions contradicted such an approach and instead “created an expectancy interest in the
renewal rights of season ticket holders.” Id. at (citing In re I.D. Craig Service Corp., B.R. ,
(Bankr. W.D. Pa. )). Specifically, the team’s ticket holder handbook referred to a season ticket
holder as an “owner” and stated that the ticket holder could transfer his ownership to others. In re I.D.
Craig Service Corp., B.R. at n.. Thus, the court found that the ticket holder’s renewal rights
were “valuable assets” that could be sold in bankruptcy. Id. at .
While encouraging for ticket holders and fans, these decisions should not be interpreted as a
departure from the longstanding tradition of viewing tickets as revocable licenses. Instead, these
decisions only amount to interpretations of contractual agreements between ticket holders and
teams. Therefore, a ruling regarding the contractually agreed upon relationship between the
Pittsburgh Steelers and their season ticket holders, for example, has no bearing on the relationship
between other teams and their fans. Indeed, in In re Liebman, the United States Bankruptcy Court
for the Northern District of Illinois found in favor of the Chicago Bulls and against a bankruptcy
trustee seeking to sell a debtor’s season ticket renewal option. B.R. , (Bankr. N.D. Ill. ).
In doing so, the court noted that “[t]he key factor that distinguishes . . . the cases relied upon by the
trustee [such as In re I.D. Craig Service Corp.] is how [the Bulls] treat[] the renewal rights of season
ticket holders.” Id. at . The court proceeded to detail how the Bulls maintained a clear and
consistent policy of treating season tickets as fully revocable licenses. Id. Still, while these cases may
not demonstrate a break with the traditional notion of tickets as revocable licenses, they are helpful
insofar as they explore the continued vitality of the revocable license rule in the context of
contractual season ticket agreements between fans and teams. This issue will become more
important as more teams begin to incorporate the revocable license rule in their contractual
agreements with fans. See infra subsection IV.C. for a more in-depth discussion of this issue and
my proposed solutions.
University of Pennsylvania Law Review [Vol. :
B. The Revocable License Rule Applied to Current
Resale Restrictions and Recent Litigation
Teams continue to use the rule of tickets as revocable licenses to support
their attempts to restrict ticket holders’ rights. Furthermore, industry
insiders, including sports lawyers, continue to believe in the rule’s vitality and
its relevance to team-imposed resale restrictions. Indeed, teams have relied
on the rule to defend against recent litigation challenging such restrictions.
For example, StubHub sued to challenge the Warriors’ policy of cancelling
season ticket subscriptions of fans who resell tickets through unofficial exchanges.
76
StubHub claimed that the Warriors and Ticketmaster had monopolized the ticket
resale market in violation of federal and state antitrust law by excluding all other
secondary ticket exchange options.
77
In their initial motion to dismiss, the Warriors
argued that any agreement between the Warriors and their fans regarding resale
restrictions does not constitute an anticompetitive agreement in restraint of trade
because “[a] ticket to a sporting event is a revocable license, and a licensor has
long been permitted to impose restrictions on its licensees, including a complete
restriction on transferability.”
78
In a subsequent motion to dismiss, the Warriors
argued that StubHub could not even allege that the Warriors and their fans made
any kind of agreement since “[a]s the issuer of a revocable license, the Warriors
can unilaterally impose ticket limitations, including resale restrictions” and
“[s]uch unilateral conduct does not constitute an agreement under Section
of the Sherman Act.”
79
The district court dismissed the lawsuit, and after
StubHub appealed to the Ninth Circuit,
80
the parties settled.
81
76
See supra text accompanying note .
77
Vin Gurrieri, Warriors, Ticketmaster Teamed to Block Resales: StubHub, LAW (Mar. , ,
: PM), http://www.law.com/articles//warriors-ticketmaster-teamed-to-block-resales-stub
hub [https://perma.cc/UY-NJP].
78
Defendant Golden State Warriors LLC’s Motion to Dismiss the Complaint and
Memorandum of Points and Authorities in Support of the Motion to Dismiss at , StubHub, Inc.
v. Golden State Warriors, LLC, No. -, WL (N.D. Cal. Nov. , ).
79
Defendant Golden State Warriors, LLC’s Motion to Dismiss the First Amended Complaint
and Memorandum of Points and Authorities in Support of the Motion to Dismiss at , StubHub,
Inc. v. Golden State Warriors, LLC, No. -, WL (N.D. Cal. Nov. , ) (citing
Soderholm v. Chi. Nat’l League Ball Club, Inc., N.E.d , (Ill. App. Ct. )).
80
Kali Hays, StubHub Takes Warriors Ticket Antitrust Suit to 9th Circ., LAW (Dec. , ,
: PM), https://www.law.com/articles//stubhub-takes-warriors-ticket-antitrust-suit-to-th-circ
[https://perma.cc/RX-XXZ]. The district court did not discuss the revocable license rule in its
opinion. Instead, the court found that StubHub’s federal antitrust claims failed because StubHub
could not allege a sucient product market as required by the Sherman Act. StubHub, WL
, at *. Since the court found that StubHub failed to adequately allege this threshold matter
of antitrust liability, the court did not reach the revocable license issue. Id. at *.
81
See Order at , StubHub, Inc. v. Ticketmaster, LLC, No. - (th Cir. July , )
(“Pursuant to the parties’ stipulated agreement . . . , this appeal is voluntarily dismissed.”).
] Revoking the Revocable License Rule
Similarly, in their motion to dismiss a season ticket holder class action suit, the
New Jersey Devils defended their right to refuse to renew season ticket
subscriptions, noting that season ticket holders receive nothing more than a
“revocable license to each game.”
82
The breach of contract suit was brought by fans
who alleged that the Devils refused to renew their ticket plans after discovering
that they had resold many of their tickets on unofficial resale exchanges. Likewise,
in their motion to dismiss a class action suit brought by season ticket holders upset
with the team’s seventy-two-hour ticket release policy,
83
the San Francisco ers
countered the plaintiffs’ trespass to chattels claim by arguing that a ticket holder
“has no property in a game ticket” since a ticket grants its holder nothing more than
a revocable license to sit in a particular seat.
84
The plaintiffs have since dropped the
lawsuit.
85
Finally, in Frager, the Colts successfully defended their decision to revoke
ninety-four season tickets of a Pennsylvania-based ticket broker, arguing that “[t]he
majority of courts to face the issue . . . [have held] that a season ticket holder does
not enjoy any property rights beyond that of a traditional revocable license.”
86
These teams’ reliance on the revocable license rule underscores the rule’s
continued vitality in the ongoing resale rights battles between teams and ticket
holders.
87
Indeed, Goldfein and Keyte, reflecting on these recent cases, explain,
82
Memorandum of Law in Support of Defendant New Jersey Devils, LLC’s Motion to
Dismiss at , Olsen v. N.J. Devils, LLC, No. - (D.N.J. June , ), ECF No. -. The
Devils also cited to Soderholm for the proposition that season tickets constitute nothing more than a
“series of revocable licenses.” Id. at (quoting Soderholm, N.E.d at ). In June , the
parties settled the lawsuit; the terms of the agreement were not disclosed. Matthew Perlman, NJ
Devils Settle Resale Suit with Ticket Holders, L
AW (June , , : PM), http://www.law.com/
articles/ [https://perma.cc/AZN-UPX].
83
See supra text accompanying notes –.
84
Notice of Motion and Motion of Defendant Forty Niners Football Company LLC to
Dismiss; Memorandum of Points and Authorities in Support Thereof at , Kazemzadeh v. S.F.
ers, No. - (N.D. Cal. Jan. , ) (case dismissed).
85
Jeff Zalesin, Ticket Holder Drops Resale Suit Against 49ers, Ticketmaster, LAW (Jan. , ,
: PM), http://www.law.com/articles//ticket-holder-drops-resale-suit-against-ers-ticket
master [https://perma.cc/NY-MKRQ]. Other teams, without specifically citing the revocable license rule,
have defended efforts to restrict secondary market sales by pointing to the underlying spirit of the rule,
arguing that proprietors have complete control over the sale of tickets. For example, Yankees President
Randy Levine justified the decision to eliminate paper tickets by noting, “This is our product and our
inventory . . . . We have the ultimate right to protect the value of our inventory . . . .” Diamond, supra note .
86
Memorandum in Support of Defendant Indianapolis Colts, Inc.’s Motion to Dismiss
Plainti’s Complaint at -, Frager v. Indianapolis Colts, Inc., No. :-cv-, WL
(S.D. Ind. Nov. , ). In granting the Colts’ motion to dismiss, the court relied on both general
property law conceptions of tickets and a specic analysis of the Colts’ season ticket policies. See
Frager v. Indianapolis Colts, Inc., No. :-cv-, WL , at *- (S.D. Ind. Nov. , )
(granting the Colts’ motion to dismiss because “the multitude of cases cited by the [Colts] have
found that a season ticket holder does not have a right to renew” and specically observing that the
“clear and unambiguous language of the invoice makes clear that the Colts have retained the right
to reject any renewal”), appeal docketed, No. CV (th Cir. Dec. , ).
87
Two recently filed lawsuits also merit a brief discussion. In late March , Minnesota
Timberwolves season ticket holders brought a lawsuit against the team’s newly implemented paperless
University of Pennsylvania Law Review [Vol. :
“[C]hallenges to resale restrictions have resulted in court opinions confirming the
historical view that tickets are mere licenses to attend rather than property to
resell,” showing that “the long held view that tickets do not include a right of resale
may still be applicable today.”
88
Similarly, Joseph C. Sullivan, a commercial
litigator at Taylor English Duma LLP, notes,
[T]he problem for disgruntled ticket holders [seeking to challenge current
resale restrictions] is that courts have generally viewed an event ticket as a
license . . . that can be taken away at any time for almost any reason and that
doesn’t give the holder an absolute right to transfer or resell that license.
89
ticket policy. See supra text accompanying notes –. The fans alleged that the policy amounts to a
breach of contract and a violation of various Minnesota laws. Nick Halter, Ticket Holders Sue Timberwolves
over New Paperless Ticket Policy, M
INNEAPOLIS/ST. PAUL BUS. J. (Mar. , , : PM), http://www.
bizjournals.com/twincities/news////ticket-holders-sue-timberwolves-over-new-paperless.html
[https://perma.cc/TEB-WGD]. They argued that they would not have purchased the season tickets if
they had known in advance about the policy. Id. Specifically, they contended that the combination of
the team’s restriction on unofficial resale exchanges and the official exchange’s use of price floors
prevented them from reselling their tickets to most games, especially given the team’s poor performance
and the market’s unwillingness to purchase tickets at close to face value prices. Id. The Timberwolves
moved to dismiss the suit. Andy Greder, Fan Lawsuit Argues “Bait and Switch” over Timberwolves Flash
Seats, T
WINCITIES.COM PIONEER PRESS (June , , : AM), http://www.twincities.com//
//fraud-case-against-timberwolves-heads-to-court [https://perma.cc/JPV-FXQ]. In the end, the team
was successful in having the case sent to arbitration. Andy Greder, Timberwolves Earn Victory in Ticketing
Lawsuit, T
WINCITIES.COM PIONEER PRESS (Oct. , , : PM), http://www.twincities.com/
///timberwolves-earn-victory-in-ticketing-lawsuit [https://perma.cc/CS-WGR].
Additionally, in August , football fans led a class action in the Northern District of Ohio
against the NFL and the Pro Football Hall of Fame following the League’s abrupt decision to cancel
the annual Hall of Fame exhibition game based on poor eld conditions. Lawsuit Seeks $5M from
NFL over Hall of Fame Game Cancellation, ESPN (Aug. , ), http://www.espn.com/n/story/_/
id//class-action-lawsuit-seeks--million-damages-nfl-hall-fame-game-cancellation [https://perma.
cc/RA-EZS]. Specically, the plaintis alleged that the NFL and Pro Football Hall of Fame
caused the eld to be unplayable through their last-minute attempts to paint logos on the eld and
that they knew the eld was unplayable hours before making an ocial announcement, leaving fans
to travel to the stadium and purchase concessions and souvenirs. Zachary Zagger, NFL, Hall of Fame
Ignoring Bid to Stop ‘Improper’ Offers, LAW (Sept. , , : PM), http://www.law.com/articles/
[https://perma.cc/JY-DH]. While the league offered to refund the face value price of each
ticket and reimburse fans for one night of hotel accommodations, the suit seeks additional damages,
including the actual price paid for each ticket, travel expenses, and the full cost of lodging. Id. Shortly
after filing, the plaintiff ’s counsel dropped the suit and brought “an essentially identical” suit against the
NFL and the Hall of Fame in the Central District of California. Memorandum of Points and Authorities
in Support of Defendant National Football League’s Joinder in Defendant National Football Museum,
Inc.’s Motion to Dismiss or Transfer Based upon Improper Venue and National Football League’s
Separate Motion to Dismiss for Failure to State a Claim at , Herrick v. Natl’ Football League, No. :-
cv--TJH (C.D. Cal. Oct. , ). The NFL has moved to dismiss the suit for improper venue or,
alternatively, to transfer the suit to the Northern District of Ohio, or if the court decides to reach the
merits, to find that the NFL is not a proper party to the suit. Id. at .
88
Goldfein & Keyte, supra note .
89
Zachary Zagger, New Ticket Restrictions Could Be Risky for Teams, LAW (Mar. , ,
: PM), http://www.law.com/articles//new-ticket-restrictions-could-be-risky-for-teams
[https://perma.cc/DQK-JMRL].
] Revoking the Revocable License Rule
III. T
HE ORIGIN OF THE REVOCABLE LICENSE RULE
AND ITS LIMITED INITIAL SCOPE
At first glance, the plethora of case law and scholarship supporting the rule
of tickets as revocable licenses appears to weigh strongly in favor of teams and
against individual ticket holders. But a closer look at the origin of the revocable
license rule demonstrates that teams should not have as much of an advantage
as they have been given. In this Part, I outline the history of the rule of tickets
as revocable licenses, beginning with the common law of England and
continuing through the doctrine’s acceptance in the United States. I describe
the intense early criticism of and departures from the rule to show that it did
not originally enjoy the same kind of unquestioned acceptance that it does
today. Similarly, I outline the ways in which courts initially avoided strict
applications of the rule when a straightforward application would have led to
an unjust outcome. Given this background, I argue that the rule’s original
proponents never meant for it to be blindly applied in favor of proprietors.
Instead, the rule served the very narrow purpose of protecting a proprietor’s
right to exclude unruly patrons. Thus, lawmakers should reconsider the rule’s
applicability in the current ticket resale context.
A. The Foundational Cases
The rule of tickets as revocable licenses begins with Wood v. Leadbitter, a
mid-nineteenth-century English case.
90
Scholars have cited Wood as representative
of the black letter English law of its time regarding admission tickets.
91
In
Wood, the court upheld a horsetrack owner’s right to eject a patron who had
purchased a valid ticket to watch a race, holding that the ticket was a mere
license, revocable at any time, as opposed to a license coupled with a grant
that entitled the ticket holder to a property interest in the land.
92
The court
reached that conclusion after noting that an incorporeal inheritance in land
could only be granted by deed and observing that there was no deed in that
particular case.
93
In turn, the court explained that the ejected patron’s only
90
() Eng. Rep. (Exch.) ; M. & W. .
91
See, e.g., J.A.R., Licenses-Liability of Theater Proprietor for Ejectment of Patron, TEX. L. REV.
, () (citing Wood for the “early English view [that] favored absolute revocability of the
license to be upon the premises and allowed only a recovery of damages for the breach of the contract
measured by the price paid for admission”); S.F.D., Comment, The Right of an Ejected Ticket-Holder
to Recover in Tort, Y
ALE L.J. , & n. () (citing Wood as indicative of the nineteenth century
English view that a ticket holder possessed a revocable license and that an ejected patron’s only remedy
was an action for breach of contract).
92
() Eng. Rep. (Exch.) at -; M. & W at -.
93
Id.; see also Bennett Liebman, The Supreme Court and Exclusions by Racetracks, VILL.
SPORTS & ENT. L.J. , () (explaining Wood’s reasoning that “an admission ticket to the
racetrack was a mere license uncoupled with any other rights to the property”).
University of Pennsylvania Law Review [Vol. :
remedy was to bring a breach of contract suit against the proprietor, through
which the patron could only recover the price of the admission ticket.
94
Over fifty years later, in Marrone, the United States Supreme Court cited Wood
for the “rule commonly accepted in this country from the English cases . . . that
such tickets do not create a right in rem.”
95
The Court ruled in favor of the
defendant-racetrack, which had denied admission to the plaintiff despite his
valid entry ticket.
96
According to the Court, the ticket holder possessed nothing
more than a license to enter, which was freely revocable by the proprietor for
any reason; therefore, he was not entitled to specific performance, and his only
remedy was to sue for breach of contract.
97
The ticket holder did not have an
“irrevocable right of entry,” and his ticket was “subject to be revoked” at any
time and for any reason.
98
Nevertheless, the Court went further than Wood’s reasoning by discussing
important policy considerations in support of the revocable license rule. The
Court noted that the ticket “was not a conveyance of an interest in the racetrack,
not only because it was not under seal but because by common understanding it
did not purport to have that effect.”
99
Thus, the Court moved beyond Wood’s
analytical justification, the lack of a sealed deed. Similarly, the Court explained
that “[t]here would be obvious inconveniences” if the ticket holder were held to
possess a right in rem against the proprietor.
100
This suggested that the Court’s
decision was driven more by policy considerations than by fundamental property
law concepts. Still, the Marrone Court’s adoption of the rule that tickets are
revocable licenses shortly became recognized as the governing American law
regarding property rights in tickets.
101
B. Early Criticisms of the Rule and Departures from It
A closer look at the case law and legal scholarship from the period
immediately following Marrone demonstrates that the revocable license rule
was not as well-received in its own time as we might expect given its wide
acceptance as the governing rule today. Courts and academic commentary
94
Wood, () Eng. Rep. (Exch.) at ; M. & W. at .
95
Marrone v. Wash. Jockey Club, U.S. , ().
96
Id. at -.
97
Id.
98
Id.
99
Id. at .
100
Id.
101
See Ralph W. Aigler, Revocability of Licenses – The Rule of Wood v. L ea d bitte r, M ICH. L.
REV. , () (citing Marrone to show that “[t]he rule of Wood v. Leadbitter has been almost
uniformly followed by the American courts”); Charles E. Clark, Licenses in Real Property Law,
C
OLUM. L. REV. , () (citing Marrone for the proposition that American courts have
followed Wood’s lead in holding that “a ticket-holder might be ejected by the proprietor at will”).
] Revoking the Revocable License Rule
immediately criticized the decision, focusing on the unjust outcomes that the
rule plainly appeared to support. Moreover, courts shied away from the rule
in its purest form by rarely applying it in favor of proprietors when the ticket
holder did nothing wrong. Instead, courts often found ways to nd in favor
of innocent ticket holders despite the rule’s obvious slant in favor of
proprietors. Finally, shortly after Marrone, English courts exhibited their
displeasure with the revocable license rule by invalidating Wood.
. Policy Arguments Raised Against the Revocable License Rule
First, Marrone was criticized for basing its holding on the public’s common
understanding of tickets. In , Alfred Conard argued,
Ticket cases are not to be confused with social entertainment, domestic
employment and retail merchandising, where the licensees understand very
well that they enter the land and remain upon it by the proprietor’s favor. In
ticket cases the parties do intend, to the extent that they think about it at all,
to create an interest which has all the characteristics of an easement except
for its relatively brief duration.
102
In other words, the common understanding of admission tickets at the time
actually weighed in favor of nding that tickets grant the holder something
closer to an irrevocable right of entry.
Additionally, academic commentary criticized the Marrone rule for its
potential to lead to unjust outcomes for ticket holders. For example, in ,
Ralph W. Aigler noted, “It does strike one as unjust . . . that after one has
purchased a ticket to attend a theatre and has taken his seat he should be
subject to expulsion at any time for a bad reason or no reason at all and then
be limited to an action merely for the breach of the contract . . . .”
103
Likewise,
the dissenting judge in Bouknight v. Lester explicitly rejected the revocable
license rule, explaining his “conviction that it does not appeal or conform to
my common sense, conscience, or conception of the law.”
104
Many condemned
the rule because it could be used to deprive an innocent ticket holder of the
opportunity to experience the event that he purchased a ticket to view.
105
102
Alfred F. Conard, An Analysis of Licenses in Land, COLUM. L. REV. , (). An
easement is dened as an “interest in land owned by another person, consisting in the right to use
or control the land, or an area above or below it, for a specic limited purpose (such as to cross it
for access to a public road).” Easement, B
LACK’S LAW DICTIONARY (th ed. ).
103
Aigler, supra note , at .
104
S.E. , (S.C. ) (Cothran, J., dissenting).
105
See, e.g., Clark, supra note , at (“Causes arise, however, in which the application of
the rule would violate principles of the plainest justice . . . .”); Alfred F. Conard, The Privilege of Forcibly
Ejecting an Amusement Patron, U.
PA. L. REV. , () (criticizing the rule for the “shock
University of Pennsylvania Law Review [Vol. :
. Courts’ Limited Applications of Marrone
Most early twentieth century courts that purported to follow the revocable
license rule still did not allow proprietors to take advantage of the rule’s
seemingly broad scope. Instead, courts very rarely used the Marrone rule to
permit a proprietor to eject or exclude a patron that paid for an admission ticket
and behaved appropriately.
106
Even Shubert v. Nixon Amusement Co.,
107
a case that
has been cited as an example of the revocable license rule being used to sanction
the arbitrary expulsion of a law-abiding customer,
108
is not as straightforward as
it may first appear. In Shubert, the expelled patron, Lee Shubert, was a theater
producer who decided to attend a show produced by his competitor—an
individual with whom he had been engaged in a “trade war.”
109
One aspect of
these competitive relationships involved eorts by producers to spot
attractive performers for other companies and make them better oers.
110
Thus, it is “doubtful” that Shubert truly believed he was a “welcome guest.”
111
Mr. Shubert, consequently, should not be described as an innocent patron
who was arbitrarily excluded.
112
Likewise, cases in which courts applied the revocable license rule in favor
of proprietors usually involved unruly patrons who deserved to be excluded.
For example, the Marrone rule was used to eject patrons who were violating the
proprietor’s rules regarding proper behavior.
113
Indeed, even Wood and Marrone
did not involve factual situations in which the excluded patrons were completely
innocent. As Conard explains, the plaintiff in Wood was ejected “in consequence
which it gives to many people’s sense of justice” and noting that “an amusement patron who is put out
of his seat has been abused in the same sense that a citizen who is driven off the street has been abused”).
106
See, e.g., Kelly v. Dent Theaters, Inc., S.W.d , (Tex. Civ. App. ) (“We have
examined practically all the cases [cited by the parties that apply the Marrone rule], and find that . . . [only
one] of them involved the arbitrary and wholly unwarranted ejection of a ticket holding patron who had
been duly received, accepted, and assigned a seat and was conducting himself in a proper and lawful
manner . . . .”); Conard, supra note , at (analyzing twenty-one cases that are cited in the
American Lawyer’s Reports in support of the Marrone rule that tickets are revocable licenses and
nding that none of the cases involved a factual situation in which a patron was arbitrarily ejected
after purchasing a proper ticket and behaving properly).
107
See A. , (N.J. ) (adopting the revocable license rule as the governing law in
New Jersey and holding that a theater patron could be ejected without any reason, even after the
patron paid for a ticket and took his seat).
108
See Kelly, S.W.d at (citing Shubert as the only example of a case that applied the rule
in such a way).
109
Conard, supra note , at .
110
Id.
111
Id.
112
Interestingly, the court’s opinion fails to mention Mr. Shubert’s occupation or the rivalry
between the parties.
113
Conard, supra note , at - (noting that four of the twenty-one cases cited for the
revocable license rule involved patrons who were admittedly violating the establishment’s rules and
that an additional three involved patrons who had broken rules in the past).
] Revoking the Revocable License Rule
of some alleged malpractices of his on a former occasion, connected with the
turf,” and Mr. Marrone was ejected “on the charge of having ‘doped’ or drugged
a horse entered by him for a race a few days before.”
114
In short, applications of
the revocable license rule in favor of proprietors were confined to cases in which
the patron deserved to be expelled.
. Courts’ Avoidance of Marrone’s Unjust Applications
Furthermore, courts creatively skirted the revocable license rule when a
plain application of it would have been unjust by using alternate grounds of
recovery for plaintis. For example, in Planchard v. Klaw & Erlanger New
Orleans Theater Co., the Supreme Court of Louisiana acknowledged the rule
that tickets are revocable licenses but nevertheless awarded in damages
to an expelled patron for insult and maltreatment.
115
Similarly, in Boswell v.
Barnum & Bailey, the Supreme Court of Tennessee referred to a ticket as a
“mere revocable license” but ultimately armed jury verdicts in favor of
expelled patrons because the ushers used “insulting and profane” language
toward the patrons in the presence of a large crowd.
116
And, in Saenger Theatres
Corp. v. Herndon, the Supreme Court of Mississippi noted the proprietor’s right
“to revoke the license to enter which is conferred by the purchase of a ticket of
admission,” but it ultimately affirmed an award for the excluded patron based
on “shame and humiliation.”
117
The court explained, “Ordinarily, it is true,
damages for mental pain and suffering not accompanied by a distinct physical
injury are not allowable; but this rule does not include cases of wanton or
shamefully gross wrong, such as the case now before us.”
118
In all of these cases,
the court could have simply cited Marrone to deny the plaintiffs any relief beyond
the price of their tickets. Thus, courts’ reluctance to apply Marrone—and their
use of alternate theories of recovery—underscores the low regard in which they
held the revocable license rule. Indeed, Conard characterized these decisions as
indicative of “a new tort of insult” that amounts to “a practical evasion of the
rule that an amusement patron’s license is revocable.”
119
Finally, some courts avoided the rule by creatively interpreting the facts such
that the rule would be inapplicable. For instance, in Metts v. Charleston Theater
Co., the Supreme Court of South Carolina allowed a plaintiff to recover punitive
damages after being excluded from a theater when the proprietor realized that
114
Id. at (footnotes omitted) (internal quotation marks omitted) (rst quoting Wood v.
Leadbitter, () Eng. Rep. (Exch.) ; M. & W. ; then quoting Marrone v. Wash. Jockey
Club, U.S. ()).
115
So. , - (La. ).
116
S.W. , - (Tenn. ).
117
So. , (Miss. ).
118
Id.
119
Conard, supra note , at .
University of Pennsylvania Law Review [Vol. :
the plaintiff had accidentally been given a ticket to the previous performance.
120
The court acknowledged the revocable license rule but ultimately avoided its
application by finding that the defendant never actually revoked the plaintiff’s
ticket, despite “abundant evidence to support the defendant’s contention that
there was a revocation.”
121
This led one commentator to argue that the court was
convinced of the “justice of the plaintiff’s cause of action,” and that the court
“adopted this convenient solution” to “free itself from the firmly-embedded notion
that a ‘license’ not coupled with a grant under seal is revocable at the will of the
licensor.”
122
Another described how courts, “apparently realizing the practical
injustice worked by a true application of the rule of the Wood case, . . . conveniently
evade its consequences” while “purporting to follow it.”
123
. England’s Abandonment of the Revocable License Rule
Due to Its Inequitable Implications
Meanwhile across the pond, English courts viewed the Wood rule with even
more disdain and ultimately decided to formally abandon the doctrine that
tickets are revocable licenses. Wood was effectively nullified in by Hurst v.
Picture Theatres, Ltd., an expelled theater patron case.
124
In Hurst, the court
explained that given the merger of law and equity, Wood was no longer good
law and could not be “applied in its integrity in a Court which is bound to give
effect to equitable considerations.”
125
In addition, the court rejected Wood on
policy grounds, explaining that to hold “it is competent to the proprietors of
the theatre, merely because they choose so to do, to call upon [a behaving
patron] to withdraw before he has seen the performance” is “contrary to good
sense” and likely to bring about “startling results.”
126
Thus, the court affirmed
a judgment against the theater in tort, noting that the patron had purchased a
right to remain in the theater for the duration of the show, as opposed to a
revocable license.
127
Shortly thereafter, English courts confirmed that Wood
120
S.E. , (S.C. ).
121
S.F.D., supra note , at .
122
Id.
123
J.A.R., supra note , at .
124
[] KB at .
125
Id. at .
126
Id. at .
127
Id. at . The court explained that the theater committed a tort by removing the patron and
that the removal constituted “an assault upon him in law.” Id. Consequently, the court armed a
jury verdict granting a higher award than the price of the ticket. Id. It is important to note that the
patron left peacefully after being asked to leave and that the theater did not have him forcibly
removed. Id. at . Thus, the holding in favor of the patron was not based on the manner in which
he was removed. Instead, the holding was based on the court’s characterization of an admission ticket
as something more than a revocable license. In other words, Hurst went beyond merely nding a
way to creatively avoid applying the revocable license rule.
] Revoking the Revocable License Rule
was no longer good law, relying on the merger of law and equity as evidence
of Wood’s inapplicability.
128
C. Reconsidering the Revocable License Rule’s Intended Purpose and Scope
All of these criticisms of and departures from the rule raise a question:
what purpose, if any, did the revocable license rule originally serve? Conard
suggested an answer:
I conclude that the proprietor’s privilege of arbitrary expulsion serves a
somewhat useful purpose, for the strange reason that practically no arbitrary
expulsions occur. It protects a proprietor from liability to a patron whom he
has expelled with a reasonable, or at least an honest, belief that he constituted
a present threat to order in the theater, by giving the jury no chance to nd
erroneously that the manager was arbitrary.
129
In other words, the rule may have been adopted to ensure that honest
proprietors were not subjected to liability for ejecting and excluding patrons
who actually deserved to be excluded. This calls to mind Marrone’s warning
that “there would be obvious inconveniences” if the ticket holder was held to
possess a right in rem against the proprietor.
130
Those “obvious inconveniences”
may refer to opportunities for juries to find against proprietors who “act
reasonably or in good faith” and the resulting impediment to the “proprietor’s
duty to keep his premises safe for others.”
131
Indeed, courts and commentators
in the period immediately following Marrone firmly believed in a proprietor’s
duty to maintain order in his venue.
132
Likewise, Marrone may have dismissed any concerns about the rule’s
seemingly wide scope and potential for unjust applications on the assumption
that proprietors generally did not exclude ticket-bearing patrons. Indeed,
academics in the period immediately following Marrone believed that
economic pressure would prevent proprietors from arbitrarily expelling
128
Liebman, supra note , at ; see also Winter Garden Theatre (London) Ltd. v. Millennium
Prods. Ltd. [] AC (HL) at (“[S]ince the fusion of law and equity, . . . Wood[] . . . should no
longer be regarded as an authority.”); Errington v. Errington [] KB at - (“Law and
equity have been fused for nearly years, and since it has been clear that, as a result of the fusion,
a licensor will not be permitted to eject a licensee in breach of a contract to allow him to remain.”).
129
Conard, supra note , at .
130
See supra text accompanying note ; see also Marrone v. Wash. Jockey Club, U.S. ,
().
131
Conard, supra note , at .
132
See, e.g., Russo v. Orpheum Theatre & Realty Co., So. , (La. ) (explaining a
theater superintendent’s duty to maintain order during a performance); Licenses—Revocation—Liability
of Theatre Owner for Unwarranted Ejection of Patron, H
ARV. L. REV. , () (“In the interest
of maintaining order, a proprietor must be permitted to eject a patron if there is reasonable cause to
believe that he has violated the implied conditions of his contract, and is creating a disturbance.”).
University of Pennsylvania Law Review [Vol. :
patrons.
133
Similarly, lawyers of that era who represented theater proprietors
called it “ridiculous” to suggest that “management would order or tolerate
arbitrary expulsions,” suggesting that such expulsions would be bad for
business.
134
In one extreme example, Alexander Woollcott, a New York Times
theater critic, described the aftermath of Woollcott v. Shubert, in which the court
affirmed the dismissal of his lawsuit against a theater for excluding him:
135
Within ten minutes the Times had excluded all Shubert advertising from its
columns and also all allusion to any actor playing in a Shubert theater . . . . [H]aving
won the decision in the courts, the Shuberts were no better off than before. Their
plays, their players and their advertising were ignored. Under this treatment they
soon came begging for my return.
136
The Marrone Court may have assumed that ticket holders did not need
the law to protect them from unethical proprietors. Proprietors who chose to
behave in such a manner would face other consequences for their actions.
Thus, the revocable license rule likely was not meant to supply proprietors
with an unlimited power to exclude. Instead, the rule was designed to supply
proprietors with a reliable legal basis for dealing with unruly patrons. The
revocable license rule merely “masks judicial belief that theater proprietors
can be trusted not to expel their patrons unjustiably” and that “juries cannot
be trusted to determine fairly whether an expulsion is justified.”
137
In other
words, the rule simply protected ethical proprietors from the possibility of a
jury deciding factual questions in favor of unruly patrons.
IV.
THE REVOCABLE LICENSE RULE’S CONTINUED VITALITY
IN THE
MODERN SECONDARY TICKET MARKET
Given the revocable license rule’s troubled background and limited scope,
lawmakers must reconsider the extent to which it continues to inform our
view of the ticket market today. Specically, lawmakers should be concerned
with the rule’s applicability in the modern online resale market for sporting
tickets. In this Part, I explain how the current economic landscape for sports
tickets actually incentivizes teams to exploit the revocable license rule to the
detriment of ticket holders, making the rule a more dangerous weapon in the
hands of teams today than it was for theater owners in the early twentieth
133
See, e.g., Conard, supra note , at (“[P]roprietors will act with decent caution, regardless
of legal sanctions.”).
134
Id. at . Conard concluded, “[T]he conception of a proprietor arbitrarily expelling a
patron is a legal ction. Proprietors very rarely expel patrons who are not violating established rules,
or suspected of it, despite their legal privilege to do so.” Id. at .
135
N.E. , (N.Y. ).
136
Conard, supra note , at (quoting Letter from Alexander Woollcott, N.Y. Times (June , )).
137
Conard, supra note , at .
] Revoking the Revocable License Rule
century. I then argue that policy and fairness considerations should spur lawmakers
to question the rule’s continued relevance in the modern ticket resale context.
Finally, I propose suggestions that lawmakers and the industry can implement to
reach a fair solution for all sides. Most importantly, my goal is to ensure that
lawmakers no longer allow teams to take advantage of an outdated rule that was
designed in another context and for a different and limited purpose.
A. The Modern Secondary Ticket Market and Teams’ Strong Incentives
to Exploit the Revocable License Rule
While economic incentives for early twentieth century proprietors aligned
with the interests of patrons, the proliferation of the contemporary secondary
ticket market has created lucrative opportunities for proprietors to take full
advantage of the revocable license rule to the detriment of ticket holders. The
economic context has changed, and proprietors, such as sports teams, can now
generate more money by controlling the secondary market by using the Marrone
rule to impose non-negotiable resale restrictions on ticket holders.
The contemporary secondary market presents three principal concerns for
teams. First, exchanges like StubHub compete with teams’ efforts to sell tickets
directly to fans on a game-by-game basis. Second, the availability of discounted
tickets on the secondary market can undercut teams’ eorts to sell season
ticket subscriptions to fans. Finally, the current secondary market presents
more opportunities for high-volume ticket scalping since there are now a
myriad of platforms for ticket holders to sell tickets to fans for a prot. All of
these concerns incentivize teams to use the revocable license rule to control the
secondary market. Thus, unlike early twentieth century proprietors, modern
teams have strong economic incentives to utilize the revocable license rule in
ways that are detrimental to their customers’ interests. In short, taking full
advantage of the revocable license rule is now good for business.
First, team executives lament StubHub’s ability to cut into their business.
138
For example, on one particular night, for roughly two-thirds of MLB teams,
% of tickets sold through StubHub were bought for lower than face value
prices.
139
When fans buy tickets from the secondary market instead of from
the team, the team loses a sale that it would otherwise ordinarily make.
140
Similarly, teams are concerned that the presence of discounted tickets on the
secondary market undercuts the value of being a season ticket holder and that
fans who buy directly from the team may stop doing so if they decide that it
would be cheaper to wait to purchase tickets on sites like StubHub closer to
138
See supra text accompanying notes –.
139
See King & Fisher, supra note .
140
Of course, one counterargument to this point is that some ticket purchasers may only decide
to purchase tickets because of the discount provided by the secondary market.
University of Pennsylvania Law Review [Vol. :
the day of the game. For instance, one Yankees executive defended the team’s
decision to eliminate paper tickets by noting,
The problem below market at a certain point is that if you buy a ticket in a
very premium location and pay a substantial amount of money. It’s not that
we don’t want that fan to sell it, but that fan is sitting there having paid a
substantial amount of money for a ticket and [another] fan picks it up for a
buck-and-a-half and sits there, and it’s frustrating to the purchaser of the full
amount. And quite frankly, the fan may be someone who has never sat in a
premium location. So that’s a frustration to our existing fan base.
141
While the last two sentences of the Yankees executive’s statement were criticized
for being unnecessary and offensive,
142
his earlier point is reasonable: fans who
pay full price would not be happy to learn that other fans are consistently
purchasing discounted tickets—for the same seat—on the secondary market.
Additionally, the modern secondary market presents new opportunities
for high-volume ticket scalping: individuals can now purchase large quantities
of season tickets directly from a team with the sole intention of selling tickets
to actual fans for a prot.
143
A simple Craigslist search for New York Mets
tickets reveals multiple postings in which sellers are oering tickets available
for multiple Mets home games.
144
StubHub even allows fans to sell an entire
season ticket subscription in one transaction.
145
Alternatively, scalpers can
easily list their tickets online for every game individually and adjust prices
according to the expected demand for each game.
Understandably, teams are concerned with these practices. In their motion
to dismiss the season ticket holder class action suit discussed above,
146
the
New Jersey Devils accused the plaintis of having intentions to scalp tickets:
141
Dayn Perry, Yankees Exec Doesn’t Want Value Shoppers Buying ‘Premium’ Tickets, CBSSPORTS.COM
(Feb. , , : PM), http://www.cbssports.com/mlb/news/yankees-exec-doesnt-want-value-shoppers-
buying-premium-tickets [https://perma.cc/XAR-QYU].
142
See, e.g., id. (“[I]t sounds a lot like the Yankees are trying to keep the ‘undesirables’ out of
the good seats.”).
143
Ticket scalping is certainly not a new phenomenon. In Collister v. Hayman, the Court of
Appeals of New York enforced a proprietor’s policy to prohibit entry to ticket holders who purchased
their tickets on the sidewalk from a local ticket scalper. N.E. , - (N.Y. ). In doing so, the
court characterized the policy as a regulation that “tends to protect patrons from extortionate prices”
and therefore found it to be a “reasonable” restriction. Id. at . Still, the modern ticket market, which
allows both primary and secondary transactions to take place over the internet, presents far greater
opportunities for these kinds of practices.
144
See, e.g., Tickets for All Mets Games! Make Me an Oer: 1$, CRAIGSLIST, https://newyork.
craigslist.org/brk/tix/.html [https://perma.cc/YR-FRJE] (“I have an assortment of
tickets from various Mets games over the course of the season.”).
145
See e.g., 2016 New York Knicks Season Tickets – Season Package (Includes Tickets for All Regular Season
Home Games), S
TUBHUB, http://www.stubhub.com/new-york-knicks-tickets-new-york-knicks-new-
york-madison-square-garden---/event/ [https://perma.cc/ZDM-UBF].
146
See supra text accompanying note .
] Revoking the Revocable License Rule
“Plaintis have their own separate agenda and their interests do not align
with fans who have bought season tickets. They are, at bottom, ticket brokers
masking as ‘fans’ who are most interested in buying and reselling large numbers
of tickets for their own benefit.”
147
Thus, primary ticket vendors resent resellers
who are able to earn profits from the resale of tickets without contributing to the
event or assuming the risk that comes with planning and hosting the event.
148
Given these concerns, it is not surprising that teams are implementing new
initiatives to curb the influence of the secondary market
149
and that teams are
relying on the revocable license rule to defend these measures.
150
B. The Need to Curb Teams’ Use of the Revocable License Rule
in the Modern Resale Context
Teams seeking to defend resale restrictions should not be able to make use of
a doctrine that was likely designed for a very specific purpose—protecting
proprietors’ right to exclude unruly patrons—and that rested on the now-outdated
assumption that economic incentives would prevent proprietors from applying
the rule to the detriment of their patrons. Policy and fairness considerations
ultimately weigh in favor of limiting teams’ ability to impose restrictions on
ticket holders’ resale rights. Though teams possess some legitimate concerns
about the growth of the secondary market, they should not be granted free reign
to impose resale restrictions as they see fit. Such freedom has resulted in very
unfair outcomes for fans as teams have been able to push the risk of an
unsuccessful season onto season ticket holders while maintaining the right to
capture the additional financial benefit of a potential strong season. Moreover,
current resale restrictions artificially inflate ticket prices on the secondary
market, which makes it more difficult for less wealthy fans to attend games
and more difficult for ticket holders to recoup some of their investment.
Teams’ concerns about ordinary (non-high-volume scalper) ticket holders
who earn profits through resales must be discounted. After all, issuers in the
securities markets face the same situation when broker-dealers profit through
resales of an issuer’s securities, yet this practice is acceptable. Happel and
Jennings explain, “[W]e [do not] decide that investment firms that deal in
secondary trading are making far too much money from the increase in value in
the stocks and should be, therefore, cut out of the markets with their economic
rents going back to the company.”
151
In addition, while teams and primary ticket
147
Memorandum of Law in Support of Defendant New Jersey Devils, LLC’s Motion to Dismiss
at , Olsen v. N.J. Devils, No. :- (D.N.J. June , ).
148
Happel & Jennings, supra note , at .
149
See supra Part I.
150
See supra Section II.B.
151
Happel & Jennings, supra note , at .
University of Pennsylvania Law Review [Vol. :
vendors might lose money when already-sold tickets subsequently increase in
value, the reverse is just as true—ticket holders suffer when the value of their
already-purchased tickets decreases. This can be due to a variety of circumstances,
including a team having an unsuccessful season or even bad weather on a particular
evening. Put another way, teams often achieve financial gains in relation to their
customers by selling tickets in advance and eliminating the risk of the ticket later
declining in value. Teams should not be able to simultaneously hedge the other
way by retaining the right to direct potential resale profits their way. This is
exactly the kind of situation that prompted the Timberwolves season ticket holders
to sue.
152
In their complaint, the fans explained, “Because the Timberwolves have
performed so poorly, Plaintiffs and class members have been left holding the bag,
since reasonable market purchasers have no interest in paying premium prices
for a team mired at the bottom of the conference standings with no hopes of
making the NBA playoffs.”
153
If we do not expect the Timberwolves to offer a
refund to season ticket holders during a bad season, why should we allow them
to capture all of the upside during a better season?
Finally, resale restrictions are troubling in that they artificially inflate market
prices so that fewer fans can afford tickets. A February report prepared by
the Office of the Attorney General for the State of New York describes the
state’s concern with “the setting of price floors on ticket resale, the practices
that impede consumer access to alternative ticket resale platforms, and . . . the
combined effect of such conduct on consumers.”
154
The report specifically
highlights the NFL Ticket Exchange and the now-defunct Yankees Ticket
Exchange as examples of team-managed resale exchanges that incorporate price
floors.
155
These price floors in turn deprive the public of the “chief benefit of the
market-driven approach[:] . . . lower prices.”
156
Similarly, the report discusses
other examples of measures teams use to restrict resales, including delayed
ticket delivery mechanisms as well as cancelling the season subscriptions of
fans who sell their tickets on sites like StubHub.
157
The New York Attorney General is rightfully troubled by these practices
because the New York Legislature, in an attempt to benefit consumers, decided
to eliminate resale restrictions in .
158
The rationale behind the decision was
152
See supra note .
153
Class Action Complaint & Demand for Jury Trial at , GLS Cos. v. Minn. Timberwolves
Basketball LP, No. -CV-- (Minn. Dist. Ct. Mar. , ).
154
ERIC T. SCHNEIDERMAN, OFFICE OF N.Y. STATE ATT’Y GEN., OBSTRUCTED VIEW: WHAT’S
BLOCKING NEW YORKERS FROM GETTING TICKETS (), http://www.ag.ny.gov/pdfs/Ticket_
Sales_Report.pdf [https://perma.cc/BFF-EQK].
155
Id. Since the Yankees’ agreement with StubHub includes a price floor, the Attorney General’s
concerns with price floors still apply to the New York Yankees. See supra text accompanying note .
156
SCHNEIDERMAN, supra note .
157
Id. at .
158
Id. at .
] Revoking the Revocable License Rule
that an increase in supply on the secondary market would lead to lower prices.
159
For example, proponents hoped that prices of late-season tickets to watch teams
not destined for the playoffs would decline in an open secondary market,
“allowing fans who otherwise might not be able to afford to see a [game] to buy
tickets for far less money.”
160
Price floors on team-mandated exchanges, however,
eliminate this possibility, “expos[ing] the public to the full costs of the new ticket
economy, while depriving the public of the benefits.”
161
Constraints on ticket resales
result in “monopoly power and higher ticket prices controlled by the promoter or
owner,” an unfavorable outcome for fans.
162
For example, Timberwolves fans who
cannot afford season tickets are deprived of opportunities to see their team play at
a reduced rate. Likewise, Timberwolves season ticket holders are being deprived
of opportunities to recoup some of their costs since other fans will not pay to
see the team at the price floor’s artificially inflated price. Similarly, an analysis of
Yankees ticket prices listed on StubHub for a game prior to the effective date of
the parties’ new resale agreement suggests that the deal’s % price floor will result
in hundreds of tickets being listed for prices in excess of their true market value.
163
At the very least, given the revocable license rule’s original criticisms and very
limited purpose, it is troubling that the sports industry now seems to blindly
accept the rule’s force in the ticket resale space.
164
From the early twentieth
century to the present day, courts, scholars, and industry insiders have seen the
revocable license rule gradually transform from a harshly criticized doctrine that
was applied in very narrow circumstances to an uncontroversial principle that can
be applied in all contexts. Therefore, regardless of whether we ultimately allow
teams to impose restrictions on ticket resales, we should be troubled by the
industry’s reliance on the revocable license rule. The continued prominence of
the view that tickets are revocable licenses allows teams to “rely on common law
property principles . . . to achieve a form of antiscalping regulation that has not
been subjected to the rigors of the democratic process that previous and existing
antiscalping laws endured to become law.”
165
159
Id. at .
160
Id.
161
Id.
162
Happel & Jennings, supra note , at .
163
See Daniel Roberts, StubHub and the Yankees May Be Misleading Fans About New Ticket Policy,
Y
AHOO! FINANCE (June , ), http://finance.yahoo.com/news/stubhub-new-york-yankees-misleading-
fans-on-ticket-price-floor-.html [https://perma.cc/QM-JCNH] (noting that over tickets
were available for one game at prices below what the lowest possible price could be once the
agreement and price oor took eect); see also Jason Notte, Opinion: The Yankees-StubHub Deal Is a
Loss For Fans, M
ARKETWATCH (June , , : PM), http://www.marketwatch.com/story/the-
yankees-stubhub-deal-is-a-loss-for-fans--- [https://perma.cc/K-KN] (“Despite a market that’s
repeatedly told the Yankees that their tickets aren’t worth even that % resale value, the Yankees
keep ignoring the fans . . . .”).
164
See supra text accompanying note .
165
Happel & Jennings, supra note , at .
University of Pennsylvania Law Review [Vol. :
C. Going Forward
In this Section, I provide two principal recommendations to protect fans from
the harms of the revocable license rule. First, courts should refuse to blindly apply
the rule in favor of teams and should—instead—follow the example set by the
early twentieth century courts to limit the rule’s application to situations in which
the balance of equities favor the proprietor. Second, lawmakers should devise a
new comprehensive legislative scheme that accounts for the concerns of both
teams and ticket holders. The scheme must allow for a relatively open secondary
market that benefits both ticket holders and ticket seekers and that also protects
teams from high-volume ticket scalpers who unfairly exploit primary seller’s
below-market prices. The common thread uniting both of these proposals is my
hope that lawmakers, courts, and sports lawyers will no longer assume that the
law of tickets should continue to be governed by the outdated revocable license
rule. Instead, lawmakers must begin to develop and implement practical solutions
to these modern problems.
. Avoiding Rote Application of the Revocable License Rule
Courts addressing the secondary ticket market should follow the example
of early twentieth century courts and avoid applying the revocable license rule
when doing so will lead to unjust outcomes.
166
Some contemporary courts have
done just that and should be looked to as modern examples. For instance, in
Brotherson v. Professional Basketball Club, L.L.C., former Seattle Supersonics
season ticket holders sued the team after their three-year season-ticket agreements
were revoked when the franchise abruptly moved to Oklahoma City.
167
Noting that the agreement with fans was “conspicuously silent regarding the
revocation of tickets,” the court ultimately rejected the team’s attempt to use
the revocable license rule.
168
Ultimately, the court chided the Supersonics for
attempting to revoke the agreements “solely because it sold equivalent tickets
at a higher price to Oklahoma [City] Thunder fans, and it desires to curry the
favor of those fans rather than Sonics fans.”
169
166
See supra subsection III.B..
167
F. Supp. d. , (W.D. Wash. ).
168
Id. at .
169
Id. at n.. The court also distinguished the facts of the case at hand from the cases the
defendant cited in support of the Marrone rule by explaining that in each of those cases, “the issuer
revoked the ticket because of the holder’s conduct.” Id. Moreover, the court noted that no decision
had ever applied the Marrone rule to an issuer who revoked a ticket “not because of the holder’s
conduct, but because of the issuer’s prot motive.” Id. This observation is very similar to the early
twentieth century scholars who recognized that Marrone was only being applied in favor of
proprietors when used to exclude an unruly patron. See supra subsection III.B..
] Revoking the Revocable License Rule
As a result, the plaintiffs were not limited to a mere refund of the purchase
price, and they could seek additional expectation damages.
170
The court
acknowledged that one such potential “expectation was that Plaintiffs would be
able to sell tickets for games that they did not want to see” and that “[d]epending
on factors . . . such as the team’s performance, star quality of the team’s players,
or the quality of the opponent’s team or players, tickets might be more valuable
than the price Plaintiffs paid.”
171
Thus, the court recognized that the plaintiffs’
tickets entitled them to something beyond the mere revocable right to attend a
series of games. The lawsuit ultimately settled in July when the team agreed
to pay the plaintiffs . million.
172
Similarly, in Ibe v. NFL, the court rejected the NFL’s argument that its
liability should be limited to the face value ticket price when the plaintiffs
purchased Super Bowl tickets and spent thousands of dollars traveling to the
host city only to be denied entrance to the game.
173
While “recogniz[ing] that,
generally, a ticket to an entertainment venue is a revocable license, terminable
at the will of the proprietor,” the court found the revocable license rule “to be
inapplicable here . . . to the extent the NFL relies on it to limit Plaintiffs’
recovery.”
174
The court explained that since “this is a situation where fans
foreseeably travel long distances and incur substantial expenses to attend a
Super Bowl, a right to revoke the license should be denied on equitable
grounds.”
175
In sum, the court refused to blindly apply the revocable license rule
in the league’s favor because doing so would have led to an unjust outcome for
the plaintiffs. This case is factually analogous to that of the disgruntled fans suing
the NFL for its cancellation of the annual summer Hall of Fame game,
176
and the
court presiding over that suit should look to Ibe as persuasive authority.
Relatedly, Mayer v. Belichick, even when deciding in favor of the team,
refused to blindly apply the revocable license rule without considering the
fairness concerns on both sides of the issue. The court ultimately affirmed the
dismissal of a fan’s “unusual” claim against the New England Patriots and the
NFL for tortious interference with contractual relations, which stemmed from
the visiting team’s allegedly improper taping of the home team’s sidelines
during the game.
177
However, the court’s reasoning did not rely on a blind
application of Marrone; rather, the court observed that it need not decide the
170
Brotherson, F. Supp. d at .
171
Id.
172
Bennett to Pay $1.6 Million in Lawsuit Settlement, FOX SPORTS (Jan. , , : AM), http://
www.foxsports.com/nba/story/thunder-owner-bennett-agrees-to-pay-former-sonics-fans- [https://
perma.cc/VT-TK].
173
No. -, WL , at *-, * (N.D. Tex. Sept. , ).
174
Id. at *.
175
Id.
176
See supra note .
177
F.d , (d Cir. ).
University of Pennsylvania Law Review [Vol. :
full scope of a ticket holder’s rights because the fan received exactly what he
paid for—namely, a seat to see the Jets play the Patriots.
178
But the court did
not stop there and instead went on to discuss the potential implications of
siding with the fan.
179
Specically, the court worried that allowing such a suit
would encourage disappointed fans to sue in response to routine occurrences
like poor calls by referees, based on claims that they did not see the fair game
for which they had paid.
180
When confronted with the revocable license rule, courts should follow
these examples and consider the policy implications of their decisions instead
of blindly applying the rule regardless of the consequences. This approach
will prevent the rule from being carelessly extended to new contexts that are
far removed from its original purpose, which was to protect proprietors
seeking to exclude unruly patrons.
181
Likewise, this approach will help ticket
holders and fans by preventing teams from abusing a rule that was designed
for dierent purposes in another context.
. Recommendations for Legislative Reform that Balances Unfair Resale
Restrictions with Unfair Ticket Scalping Prots
Nevertheless, a focus on policy-driven applications of the rule in litigation
will not entirely solve the problem. In addition, legislative reform should tackle
the growing trend of teams crafting policies and ticket holder agreements that
classify tickets—especially season tickets—as revocable licenses.
182
To that end,
I propose various legislative measures that lawmakers should embrace to
develop a fair solution to the issue that accounts for the concerns of both teams
and ticket holders. Specifically, the legislation must provide for a more open
resale market that nonetheless deters high-volume ticket scalpers.
Clear contracts and policies that classify tickets as revocable licenses and
use that classication to limit resale rights may constrain even courts that
doubt the appropriateness of the revocable license approach. For instance, in
the bankruptcy context, courts often resolve disputes over resale rights based
on the actual contractual arrangements between the team and the fan.
183
As
more teams begin to use Marrone’s revocable license language directly in their
own agreements with fans, courts will be forced to honor such terms, and the
178
Id. at .
179
Id. at .
180
Id.
181
See supra Section III.C.
182
See Happel & Jennings, supra note , at (discussing the trend); see also supra note
and accompanying text.
183
See supra note .
] Revoking the Revocable License Rule
rest of the industry will likely follow suit.
184
Indeed, in Frager, the Southern
District of Indiana noted that “a season ticket holder may be permitted to
transfer any rights he may have [but] those rights are created by the
contract.”
185
Consequently, courts’ ability to creatively evade the revocable
license rule for policy reasons will be limited to cases in which a team has not
established a clear resale policy.
Therefore, lawmakers should pass legislation that restricts the extent to
which teams can impose resale restrictions on ticket holders. Such legislation,
however, must account for fairness concerns on both sides and should not leave
teams without any protections. Specifically, it must account for teams’
legitimate concerns about scalpers who exploit their industry knowledge and
connections to acquire large quantities of high-demand tickets with the sole
intention of selling them to generate a profit.
186
These concerns are not unfounded. For example, in December , a single
broker was able to purchase tickets in the first minute of the primary online
public sale for a U concert at Madison Square Garden.
187
Another broker used
different American Express cards to bypass ticket-purchasing limits and
made more than , purchases from to .
188
Similarly, as explained
above, many season ticket holders are actually ticket brokers who simply sell all
of their tickets in the hope of earning a profit.
189
This is all very troubling to
teams because brokers end up selling the tickets at substantial markups over
face value. One study of six ticket brokers found that their average profit was
%.
190
Brokers sometimes even resell tickets at prices over % of the face
184
Of course, courts will not have to honor such agreements if they are found to violate antitrust
law. This was the precise legal question at issue in StubHub’s suit against the Warriors for requiring
ticket holders to sell tickets through the official team-managed exchange. See supra text accompanying
notes –. While the district court’s opinion dismissing the suit did not discuss the revocable license
rule, the Warriors did rely on the Marrone rule in their briefs. In response to StubHub’s claim that the
Warriors’ ticket policies constitute an agreement that unreasonably restrains trade in violation of federal
antitrust law, the Warriors argued that since “a ticket to a sporting event is a revocable license, and
licensors are generally permitted to impose restrictions on revocable licenses,” it follows that the Warriors’
policy of revoking the tickets of those who use unauthorized resale exchanges constitutes unilateral
conduct. Defendant Golden State Warriors, LLC’s Motion to Dismiss the First Amended Complaint
and Memorandum of Points and Authorities in Support of the Motion to Dismiss at -, StubHub,
Inc. v. Golden State Warriors, LLC, No. -, WL (N.D. Cal. Nov. , ). In turn,
the nature of tickets as revocable licenses obviates the need for the Warriors and their ticket holders to
reach any agreement regarding restrictions on resale. See id.
185
Frager v. Indianapolis Colts, Inc., No. :-cv-, WL , at * (S.D. Ind. Nov. , ).
186
See SCHNEIDERMAN, supra note , at (explaining how brokers have “significant advantages
over the average fan” in accessing tickets because of their industry knowledge, resources, and relationships).
187
Id. at .
188
Id. at .
189
See supra text accompanying notes –.
190
SCHNEIDERMAN, supra note , at .
University of Pennsylvania Law Review [Vol. :
value.
191
For example, face value bleacher-seat tickets for Game of the
World Series at Wrigley Field were on average listed for on the
secondary market.
192
It is unfair for these scalpers to easily profit from the labor
and efforts of the teams and promoters that actually sponsor and run these
high-demand events. This is especially concerning given that many teams and
event promoters intentionally sell tickets to high-demand events at prices far
below the level they anticipate the market will pay. Primary sellers do this to
make tickets accessible to more fans and to generate goodwill.
193
Scalpers
thwart these efforts by “tak[ing] the benefits intended for the consumer.”
194
Consequently, many believe that “the average fan has no chance to buy tickets
at face-value” to popular events.
195
Thus, a prohibition on all resale restrictions would be unfair to both teams
and fans and would merely amount to an unjust windfall for ticket scalpers.
Even early twentieth century courts upheld a proprietor’s right to protect patrons
from the exorbitant markups that scalpers charged for popular events.
196
Therefore, lawmakers must devise a plan that accounts for these abuses while
also facilitating a relatively open secondary market for fans seeking to buy
tickets from real fans who simply cannot attend particular games.
A Colorado statute addressing the secondary ticket market serves as a good
starting point. In , Colorado passed legislation that prohibited primary
ticket sellers from conditioning the purchase of season tickets on the ticket
holder’s consent to resale restrictions.
197
Likewise, the law bans the use of
sanctions to penalize ticket holders who resell tickets through unofficial resale
exchanges.
198
But, the statute is careful to point out that a proprietor may
revoke the season tickets of patrons who violate the venue’s policies and pose a
threat to the safety of other patrons.
199
Such legislation represents a more
equitable solution to the issue because it protects both fans and primary ticket
vendors. The statute shields fans from the unjust effects of the revocable license
rule while protecting proprietors’ rights to exclude unruly patrons, which was
arguably the Marrone Court’s sole purpose in adopting the rule.
200
But the
191
Id.
192
Danny Ecker, Here’s What People Are Paying for Cubs World Series Tickets, CRAIN’S CHI. BUS.
(Oct. , ), http://www.chicagobusiness.com/article//BLOGS//heres-what-people-
are-paying-for-cubs-world-series-tickets [https://perma.cc/JXN-LLJ].
193
Id. at .
194
Id.
195
See, e.g., id. at (quoting a consumer complaint received by the New York Attorney General’s office).
196
See supra note .
197
Colorado Consumer Protection Act, COLO. REV. STAT. ANN. § --()(a)(I) ().
198
Id. § --()(a)(IV).
199
Id. § --()(b).
200
See supra Section III.C.
] Revoking the Revocable License Rule
statute is not ideal because it fails to address teams’ legitimate concerns about
high-volume ticket scalping.
In the interest of devising a scheme that will protect the interests of both
fans and ticket holders, I propose five specific recommendations. First, states
should prohibit teams from implementing price floors on their official secondary
ticket exchanges. Such measures do not deter ticket scalping abuses since price
floors are only relevant when tickets are not in high demand. Instead, these
policies prevent ticket holders from lowering their asking prices to the level
that the market is willing to pay, which means that ticket holders often cannot
recoup any of their investment. At the same time, fans who cannot afford face
value prices are potentially deprived of their only chances to attend games.
These problems are severely exacerbated when price floors are combined with
team policies that prevent fans from using other exchanges that do not have
price floors.
201
In a promising development, the New York Attorney General
recently announced a multistate settlement with the NFL—following an
investigation into the league’s ticket resale policies—that bars the NFL from
requiring that teams utilize price floors on their official resale websites.
202
Second, lawmakers should set and enforce strict caps on allowable
markups for resale transactions. Resale caps would deter high-volume scalping
by diminishing potential returns and, in doing so, ensure that more face value
tickets make their way to actual fans. Similarly, resale caps would encourage teams
to continue to sell tickets at lower than market value prices to generate goodwill.
And, these caps will not prevent ticket holders from selling their tickets when
they cannot attend games. Furthermore, while the caps could diminish the
potential resale returns that a casual ticket holder might earn for selling
tickets to high-demand games, ticket holders in this legislative scheme will
still be better o based on the elimination of price oors on ocial resale
exchanges. Moreover, any ticket holder who is primarily concerned with
resale prots is the kind of scalper about whom teams have a right to be upset.
Of course, the caps must not be so low as to eliminate any incentive for secondary
exchange sites to operate. Instead, legislators must find an appropriate level that
“would still allow brokers a role in the market but would also ensure that any
price markups [are] reasonable.”
203
Third, and relatedly, lawmakers should provide that teams may establish
per-customer season ticket holder seat limitations that prevent high-volume
201
SCHNEIDERMAN, supra note , at .
202
Press Release, N.Y. Office of the Attorney Gen., A.G. Schniederman Announces Multi-State
Settlement with NFL Permanently Barring League-Wide Mandatory Ticket Price Floor (Nov. , ),
https://ag.ny.gov/press-release/ag-schneiderman-announces-multi-state-settlement-nfl-permanently-
barring-league-wide [https://perma.cc/U-DY].
203
Id. at . The New York Attorney General’s report also recommends setting caps on allowable
resale markups. Id.
University of Pennsylvania Law Review [Vol. :
scalpers from buying season tickets in bulk. By extension, teams should be
able to revoke the season tickets of current ticket holders whose quantity of
tickets evinces an intent to engage in high-volume scalping. For example,
beginning with the – basketball and hockey seasons, Madison
Square Garden has decided to limit New York Knicks and New York Rangers
season ticket purchasers to eight season tickets per licensee.
204
In response,
three ticket resale firms sued, claiming that the policy violated the venue’s
ongoing commitment to always renew their season tickets.
205
Both this policy
and the Colts’ refusal to renew the ninety-four season tickets of a
Pennsylvania-based ticket broker
206
were clearly geared toward preventing
high-volume ticket scalping: a Pennsylvania resident is obviously not
planning to use ninety-four tickets for personal use each Sunday. These
policies should be encouraged because they will only affect those who buy
season tickets for high-volume scalping purposes: season ticket holders who
204
Barbara Ross, 3 Ticket Resellers Sue Madison Square Garden for Canceling Season Tickets, N.Y.
DAILY NEWS (May , , : AM), http://www.nydailynews.com/new-york/manhattan/-ticket-
resellers-sue-msg-canceling-season-tickets-article-. [https://perma.cc/MGP-DP].
205
Id. The plaintiff firms, for over fifteen years, have each purchased more than the now-maximum
eight season tickets. Id. One of the plaintiff resale firms has attempted to portray Madison Square Garden
as selsh and money-hungry, arguing that “the result will be higher prices because while resellers
can sell a ticket for when demand is low, [Madison Square Garden] won’t sell it for less than
.” Id. This argument is awed for two reasons. First, it is doubtful that any rm specializing in
ticket resales would decide to buy a bulk of inventory that it expected to decrease in value. Second,
and more importantly, the Knicks and Rangers have consistently sold out all of their games: without
these resellers, the Knicks and Rangers will still have no problem selling all of their available tickets
at face value prices. See Marc Berman, Knicks Had 11 Percent of Ticket Holders Withdraw - Before Roster
Splash, N.Y.
POST (Sept. , : PM), http://nypost.com////knicks-had--percent-of-ticket-
holders-bail-before-roster-splash [https://perma.cc/FHH-AH] (“The Garden expects to continue its
regular season/playoff [Knicks game] sell-out streak that stands at games.”); Rangers Snap a Couple of
Slumps in Rare Win over Sens, FOX SPORTS (Dec. , , : AM), http://www.foxsports.com/nhl/
story/new-york-rangers-beat-ottawa-senators-end-mini-slump-with-rare-win- [https://perma.cc/
QX-GU] (“[The] New York [Rangers] ha[ve] a -game sellout streak, including the playos.”).
The Supreme Court of New York sided with Madison Square Garden and denied the plaintis’
request for a temporary restraining order. Dareh Gregorian, Madison Square Garden Can Put a Cap
on Rangers, Knicks, Season Ticket Holders’ Seats, Judge Rules, N.Y.
DAILY NEWS (May , , : PM),
http://www.nydailynews.com/new-york/manhattan/madison-square-garden-put-cap-season-tickets-
judge-article-. [https://perma.cc/PV-WST]. Shortly thereafter, the parties agreed to settle the
case. See Consent Judgement at , Smile For Kids, Inc. v. Madison Square Garden Co., No. /
(N.Y. Sup. Ct. July , ) (noting that all claims asserted by the plaintiffs had been withdrawn and
dismissing the case with prejudice).
206
See supra text accompanying notes and .
] Revoking the Revocable License Rule
merely wish to resell some tickets will not be adversely affected.
207
In fact,
these kinds of policies are likely to inhere to the benefit of fans.
208
Fourth, lawmakers should prevent teams from implementing non-transferable
paperless ticket entry policies in conjunction with requiring that all resales be
conducted through the team’s ocial exchange. This is precisely what the
Timberwolves have done.
209
These tickets resemble airline tickets, “requiring
the presentation of identication and the credit card used to buy the ticket at
the entrance to the venue.”
210
Currently, New York is the only state that has
prohibited ticket vendors from using a paperless ticket method as the
207
It is important to distinguish per-customer seat limitations from team policies that prevent
season ticket holders from reselling a set number of games. For example, the Tampa Bay Lightning
have barred season ticket holders from reselling tickets to more than half of the team’s games. Steve
Contorno, Florida Legislation Wades into Ticketmaster vs. StubHub Fight, T
AMPA BAY TIMES (Jan. ,
, : PM), http://www.tampabay.com/news/politics/stateroundup/florida-legislation-wades-into-
ticketmaster-vs-stubhub-fight/ [https://perma.cc/EN-TM].
The team put the plan in place to “keep outsiders from proting o of the team and ensure
more tickets ended up in the hands of real fans.” Id. Still, such policies should be prohibited because
unlike reasonable per-customer caps, any cuto point with respect to number of games resold will
inevitably aect actual fans, not just high-volume scalpers. While a ticket licensee from a faraway
state who purchases ninety-four season tickets is clearly a scalper, someone who resells roughly half
of their tickets during a particular season may not be. Factors like a temporary drop in income,
sickness, or an especially busy schedule one year might force a fan to resell more tickets than he or she
is accustomed to selling. No bright-line rule could ever account for such contingencies.
Interestingly, Florida lawmakers considered a bill that would have prevented the Lightning from
implementing this and similar policies. Id. According to Representative Jared Moskowitz, the bill’s sponsor,
the inspiration behind the proposed legislation was that “[t]ickets are expensive” and that “people [who]
want to sell a portion of their season tickets to recoup some of those costs . . . should be able to do
so without restrictions from the team or fear of having their seats revoked.” Id. The bill ultimately died in
the House of Representative’s Regulatory Affairs Committee. FL – HB1127, Resale of Tickets, T
RACKBILL,
https://trackbill.com/bill/fl-hb-resale-of-tickets/ [https://perma.cc/S-XDHR].
208
See, e.g., Lora, Comment to Broker Sues After Colts Cancel Season Ticket Renewal, INDIANAPOLIS
BUS. J. (Apr. , ), http://www.ibj.com/articles/-broker-sues-after-colts-cancel-season-ticket-
renewal [https://perma.cc/Y-MQX] (“As a person who has been on the Colts Season Ticket
Waiting List for YEARS and am still number -something, I am appalled that an out of town ticket
broker can have of these season tickets just to make money! Kudos to the Colts for NOT renewing
them so maybe some of us who actually want them and are waiting may be getting.”).
209
See supra text accompanying notes –. In addition, while the San Francisco ers’ ticket
delivery policies are not entirely analogous to those of the Timberwolves, any legislative action taken
on this point should nonetheless account for and prohibit what they have done: refusing to issue
copies of tickets until three days before the game, while requiring and ensuring that any resales prior
to that window are conducted on a paperless basis through the team’s ocial exchange. See supra text
accompanying notes –. Although this measure does not entirely foreclose resale opportunities
outside of the team’s ocial exchange, it makes doing so extremely dicult since sales can only
happen within the three-day window prior to the game. Thus, teams should also be prohibited from
restricting resale opportunities on unaliated exchanges to short, impractical timeframes that
render the policy to be functionally equivalent to the Timberwolves’ more straightforward paperless
ticket entry policy.
210
SCHNEIDERMAN, supra note , at .
University of Pennsylvania Law Review [Vol. :
exclusive delivery option.
211
The New York Attorney General has proposed to
lift the ban on paperless tickets, arguing that “[a]llowing these types of tickets
would . . . make it more dicult for brokers to continue hoarding tickets and
demanding exorbitant markups from fans.”
212
While true, the resale caps
discussed above will already serve to curb scalping. Meanwhile, allowing
teams to exclusively use paperless tickets ultimately harms ticket holders by
severely restricting their ability to resell tickets. For example, the Timberwolves
season ticket holders note that the team’s new paperless ticket policy makes
it “impossible for ticket holders to list the tickets on a secondary marketplace or
platform such as StubHub or Ticketmaster, or even to physically sell or transfer
them in a hand-to-hand transaction.”
213
The result is a diminished market for
fans, which will ultimately lead to greater financial losses for ticket holders.
Finally, teams should not be allowed to punish ticket holders who choose to
resell their tickets on unofficial resale exchanges. The Warriors should not be
able to prevent fans from using StubHub instead of the Warriors’ official
Ticketmaster-managed exchange. Such practices impose severe harms on both
season ticket holders and fans seeking to purchase tickets for sold out individual
games. Sellers are forced to deal with a more limited pool of potential buyers
because specific team-managed exchanges often generate less traffic than widely
known national exchanges like StubHub.
214
Likewise, buyers are restricted to
using just one resale exchange instead of having the opportunity to compare
prices, fees, and delivery options across multiple competing venues. With no
other exchanges to compete with, team-mandated exchanges are then free to
impose any conditions they choose, including higher transaction fees and
decreased delivery options. In short, less competition will translate to less
incentive for teams to make their resale exchanges fan-friendly.
That said, teams should still feel free to develop their own resale
exchanges and compete with other sites like StubHub. Teams may attempt to
drive trac to their own site by oering special rewards to season ticket
holders who choose to resell on their exchange. This kind of competition will
lead to more favorable results for ticket holders and ticket seekers. Indeed,
according to Wes Brodsky, chief executive of Contender.com, another resale
site, “[A]n open industry with multiple sellers and marketplaces competing
211
Id.
212
Id.
213
Mary Beth Quirk, Timberwolves Fans Suing over Team’s New Paperless Ticketing System,
CONSUMERIST (Mar. , ), https://consumerist.com////timberwolves-fans-suing-over-
teams-new-paperless-ticketing-system [https://perma.cc/ZM-AKEZ].
214
See, e.g., StubHub’s Consolidated Opposition to Defendants’ Motion to Dismiss at , StubHub,
Inc. v. Golden State Warriors, LLC, No. -, WL (N.D. Cal. Nov. , ) (describing
how the Warriors’ policy results in lost sales for resellers because the ocial team exchange attracts
far fewer potential buyers than StubHub).
] Revoking the Revocable License Rule
on price gives consumers the best chance of getting a fair deal.”
215
In short,
these ve measures represent a fair compromise for teams and ticket holders.
They allow ticket holders and ticket seekers to benet from a relatively
unrestricted secondary market while addressing teams’ legitimate concerns
with high-volume ticket scalping abuses.
C
ONCLUSION
My goal in this Comment has been to inspire lawmakers to reconsider the
revocable license rule’s continued vitality in the ticket market. I have demonstrated
that the rule was originally devised for a limited purpose in a context in which
proprietors had little reason to exploit it. The rule was not meant to provide a
proprietor with an unbeatable weapon to be used against patrons whenever it
serves the proprietor’s interests. Unfortunately, criticism of the rule has faded, and
it now enjoys wide acceptance across the industry. This is particularly troublesome
in the current secondary ticket market, in which teams have strong financial
incentives to utilize the rule to the fullest extent possible, often to the detriment
of their own fans. The result is a secondary ticket market that artificially inflates
prices to low-demand games, hurting both fans trying to sell tickets and fans
seeking to buy tickets.
Of course, teams’ concerns about the proliferation of the secondary market
are not entirely unfounded. For example, teams have legitimate concerns
about ticket scalpers who buy large quantities of face value tickets to popular
events only to sell them for higher prices on the secondary market. However,
abandoning the revocable license rule does not require the industry to
eliminate all primary seller protections. Instead, lawmakers must devise
pragmatic solutions that account for the legitimate concerns of both fans and
teams. To that end, I have advanced ve proposals that I believe will result in
a more equitable solution for all. Nevertheless, the substantive content of my
proposals is less important than my overall message, which is that we will
only be able to nd a workable solution to these dicult problems by rst
abandoning the revocable license rule. The rule was developed for a very
limited purpose and is based on outdated assumptions. The ticket market
should not continue to be guided by an early twentieth century rule that the
modern market has substantially outgrown.
215
Hannah Karp, Sports Teams Score a Piece of the Ticket-Scalping Business, WALL ST. J. (June , ,
: AM),
http://www.wsj.com/articles/sports-teams-score-a-piece-of-the-ticket-scalping-business-
[https://perma.cc/N-RL].
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