StubHub, CEO Hit With 'Deceptive Practices' Class Action Over Mass Scalping (www.cbc.ca) 30
An anonymous reader quotes a report from the BBC: StubHub and its CEO, Eric Baker, have been hit with a proposed $5-million class-action lawsuit in the United States over the company's ties to large-scale scalpers -- connections reported by CBC News last week. The suit, filed Monday by New York ticket buyer Louis Sanquini, alleges deceptive practices and fraudulent misrepresentation over StubHub's promoting itself as a "marketplace for fans to buy and sell tickets." The online ticket resale giant has faced a storm of customer complaints after cancelling thousands of World Cup tickets. The company has repeatedly said it is simply a technology platform that does not buy, sell or possess tickets. However, CBC reported last week that Baker disclosed in recent filings with the U.S. Securities and Exchange Commission that he runs Andro Capital, a hedge fund that engages in large-scale resale of millions of dollars' worth of sports and concert tickets on the StubHub resale platform.
Sanquini filed the proposed class action in the Southern District of New York, arguing consumers were kept in the dark and that he believed StubHub was a "neutral" marketplace. Lead counsel Kevin Steinberg told CBC News in an emailed statement that "consumers deserve honesty and transparency." A CBC investigation found that the CEO of online ticket reseller StubHub owns and manages a hedge fund that scalps millions of dollars of its own tickets. "While what StubHub is alleged to have engaged in and perpetrated upon millions of patrons is unfathomable, this case is about transparency and consumer trust. If companies make representations to the public, consumers are entitled to expect that those representations are complete and accurate," he said.
The claim reads: "Defendants' failure to disclose this conflict of interest, while affirmatively marketing StubHub as a fan-to-fan marketplace, deceived Plaintiff and the Class and caused them to pay prices, and accept terms, they would not have accepted had the truth been known." Sanquini argues that had he known StubHub's CEO held a financial interest and that the company was helping finance professional resellers, he would never have used the resale site to buy tickets to see rock band Kiss in 2023 or to attend a New York Red Bulls-New York City FC Major League Soccer match in 2024.
Sanquini filed the proposed class action in the Southern District of New York, arguing consumers were kept in the dark and that he believed StubHub was a "neutral" marketplace. Lead counsel Kevin Steinberg told CBC News in an emailed statement that "consumers deserve honesty and transparency." A CBC investigation found that the CEO of online ticket reseller StubHub owns and manages a hedge fund that scalps millions of dollars of its own tickets. "While what StubHub is alleged to have engaged in and perpetrated upon millions of patrons is unfathomable, this case is about transparency and consumer trust. If companies make representations to the public, consumers are entitled to expect that those representations are complete and accurate," he said.
The claim reads: "Defendants' failure to disclose this conflict of interest, while affirmatively marketing StubHub as a fan-to-fan marketplace, deceived Plaintiff and the Class and caused them to pay prices, and accept terms, they would not have accepted had the truth been known." Sanquini argues that had he known StubHub's CEO held a financial interest and that the company was helping finance professional resellers, he would never have used the resale site to buy tickets to see rock band Kiss in 2023 or to attend a New York Red Bulls-New York City FC Major League Soccer match in 2024.
$5 million is laughably low (Score:5, Interesting)
This should not be filled asking for a mere $5 million. It looks a little like a fake suit to get him and them off the hook. Even if they settled for the full amount they are getting off easy.
Re: $5 million is laughably low (Score:3)
Ticket scalpers are overcharging for tickets? Say it isn't so! Inconceivable! /s
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Cost of doing business. A fraction of profits.
Ticket prices are insane. (Score:2)
I saw Pearl Jam in 2016 for ~$75 a ticket, last year I checked on tickets and they were ~$600 a ticket.
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I have seen Tool 6 times. The first time it was only $12, GA, in 1998. The last time was 2019 it was $230 for floor seats.
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Agreed: ticket prices are insane. I went to see Cold Play with a family member a few years back. Altogether, the tickets were over $1000, for modest seats at the opposite end of the stadium.
This will continue until consumers fight back. But I'm not sure whether they have the will. People still want to see their favorite bands in concert. And pipsqueak class-action lawsuits for $5M won't do a damn thing.
I think it's time for governments to address the problem. The days of middlemen gouging concertgoers shoul
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Altogether, the tickets were over $1000
I'm assuming this was face value of the tickets, which has little to do with scalping?
Tours and live events are expensive, and are now one of the few ways popular music acts can actually make money. So they charge as much as they can, and all of the middlemen in the biz also take as large of a cut as they can.
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The total for both of us was over $1000. And that included markups from middlemen.
I have no problem with the artists and their support crew getting paid well. I recognize that costs have gone up significantly since the days I spoke of, and the revenue from recordings is not what it used to be.
Even so, I object to gouging from middlemen, because they add little to no value to the marketplace, and yet take so much compensation for their involvement in it. Be gone with them.
Re: Ticket prices are insane. (Score:2)
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You.clearly have not bought tickets in the last 2-3 years
If the price is too high, I don't go. I'm not the target market for the recent A-list pop music tours, but I have been to some major sporting events in the past two years, and I will say Europe does a much better job of managing the secondary market for tickets than the U.S. They have limits on price increases for resellers, fees are limited for the transaction, there's clear ticket transfer process which limits forgery somewhat...but we can't have that in the U.S. because, *socialism*?
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THIS THIS THIS. Bands used to make money in several ways...That isn't so anymore. The record labels FSCK'd everyone when they signed blanket agreements with the online services. Amazon/Temu killed the merch marked with Chinese knockoffs. All there is left is the show and the stuff they sell there, and bands are getting squeezed out there by fee's and tax's from everywhere. Corporations will own everything eventually.
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Simple solution: don't buy tickets
Oh right, that's too simple. It will never be done.
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This will continue until consumers fight back.
Simple solution: don't buy tickets
Addendum: checkout new artists instead - local bands, small venues, etc.. somewhere between free and cheap. And buy a shirt or CD.
This goes for all of the arts.
Re: Ticket prices are insane. (Score:2)
Wow! (Score:2)
I am shocked (Score:2)
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That would indeed be the net effect... lawsuit costs just passed directly on to the consumer without even thinking twice. The only people who win here are the lawyers.
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That's the normal outcome of a legal system run by and for lawyers. I was once added (without my permission) to a class action suit against Seagate. We "won" a coupon for $15 off our next Seagate drive of 500 mb or less (a month after Seagate had stopped producing 500mb drives). The lawyers made $5,000,000.
Crank it up (Score:4, Interesting)
StubHub valuation: ~$4 billion
Eric Baker net worth: ~$800 million
This class action should be seeking a minimum of 20% of the company's value as well as 50% of Eric Baker's net worth.
Re: Crank it up (Score:3)
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Imprisoning someone for corruption would set an...inconvenient...precedent for the society of today.
I just stopped going to large venue music shows (Score:2)
I love music. My whole life has been playing in bands, going to see concerts and as a child of the 80s standing in long lines to get tickets or disapointment.
The prices of tickets is out of hand. The scalping is out of hand. So I just quit. I see local shows by local musicians or at venues in small towns. I don't care how much I like someone's music I'm not paying hundreds of dollars for the cheap seats to see them.
conflict of interest indeed (Score:2)
so eric baker says his company stubhub does not buy, sell or possess tickets. but he has this other company, Andro Capital, that does. what a load of crock! this shouldn’t be a $5 million lawsuit. it should be a $55+ million lawsuit.
Re: conflict of interest indeed (Score:2)
Re: conflict of interest indeed (Score:2)
I am SHOCKED! (Score:2)
Put him in jail! (Score:2)
Outlaw Scalping (Score:2)
Seems simple to me.
Tickets are tied to the purchaser, and can't be resold.
Duh.