NFL Ticketing Policies: Anti Trust Investigation
By Prof Dr Ian Blackshaw
It has been announced that the New York Attorney, Eric Schneiderman, is investigating the ticketing policies of the NFL (National Football League), the Governing Body of American Football, for possible breaches of US Anti-Trust Law. Since 1890, monopolies, cartels, restrictive trade and pricing practices and other anti-competition arrangements have been the subject in the US of strict competition (in an economic sense) rules, including the notorious treble damages penalty for infringements of them.
Schneiderman is looking into the resale of NFL ticket sales and whether they are illegal, in particular, through the so-called ‘resale price floors’ platform operated by the NFL. Since 2008, the NFL has aggressively encouraged people with tickets to resell to do so through the NFL Ticket Exchange (NFLTE), a marketplace operated by an organisation called Ticketmaster. Also, some teams require ticket holders to resell them through the NFLTE. The NFLTE enforces these ‘resale price floors’ which require that the tickets are resold at a minimum price which is not less than the face value of the tickets.
Under the ‘resale price floors’ platform, the tickets cannot be resold for less than their face value. The question, therefore, is: are such practices anti-competitive or not. According to Schneiderman, they are and infringe the Anti-Trust rules.
He argues that platforms that use ‘price floors’ are at a natural competitive disadvantage to those that do not operate such schemes, preventing those who would be ready to resell tickets below their face are prevented from doing so.
Furthermore, consumers may be misled into thinking that they are, in fact, paying market prices when that is not the case. The ‘resale price floors platform’ also prevents consumers from buying at lower prices when weak demand for tickets would bring down the price of them. In other words, normal market forces are prevented from operating, including consumer choice.
Of course, many Sports Governing Bodies around the world seek to protect the value of the ticket sales to their events and prevent, if possible, ticket touts selling above and below their face value and thereby distorting the market. And National and International Competition Authorities are always on the alert to prevent any such anti-competitive practices, as well as the restrictive allocation of tickets and payment arrangements. In many of these cases, such Authorities act on complaints from consumers.
For example, there have been legal challenges under the EU Competition Rules to the sale of tickets to the Olympic Games; the FIFA World Cup; and the Euro Championships. See respectively: Commission Press Release of 23 May 2003 (IP/03/738) (2004 Olympic Games); Commission Decision of 20 July 1999 (Case IV/36.888 — 1998 Football World Cup) (notified under document number C(1999) 2295); and Commission Press Release of 8 June 2000 (IP/00/591) (Euro 2000).
See also the landmark ruling handed down by the English High Court in March 2011 in the case of Rugby Football Union v Viagogo Limited  EWHC 764 (QB). This case is a triumph for rights holders needing to discover the identity of wrongdoers anonymously selling tickets to sports events via ticket exchanges in breach of their terms and conditions. The case is discussed in detail by Louise Millington-Roberts in ‘Clarification of Norwich Pharmacal Proportionality’, ‘Global Sports Law and Taxation Reports’, March 2013, at pp. 28-30 (both inclusive).
It will be very interesting to see what happens in the NFL ticketing case where US Anti-Trust Law has been a major force in America for some 125 years!