As Kobe Ticket Debacle Shows, StubHub + Other Outlets Should Be 1,000% Liable When They Screw Up

Jesse Sandler, a 32-year-old clinical social worker who lives in West Los Angeles, was trending on Facebook and on the front of Reddit last week. The gist of his story is that he bought $195 tickets on StubHub in November for what he presumed would be Kobe’s last home game as a Laker, the Players Tribune announcement came over two weeks later, prices skyrocketed, and the third-party seller reneged.

Screengrabs (which Sandler published on TheLeadSports.com, a site that, despite a similar name, is unaffiliated with TBL) showed that StubHub customer service offered a refund, and a paltry $100 voucher. This was insufficient. This situation was akin to buying stock in a small tech company, only to realize you didn’t have ownership of it later in the week when it got acquired by Apple and the value soared.

After the story spread like dandelions, StubHub became very conciliatory, offering Sandler four tickets to Kobe’s final home game, in addition to a suite for another game for him and his friends and family. Sandler tells TBL he declined the offer because he did “not want to do business with them.”

Sandler also had other options from brands seeking to capitalize on good publicity. The Kansas City-based reseller Tickets for Less flew out to Los Angeles and hand-delivered him four tickets at work, and he also got four from Budweiser for the “Ultimate Fan Experience,” whatever that is. He says he’s donating the ones from TFL to After School All Stars, a children’s charity that Kobe supports.

Nonetheless, Sandler feels that StubHub (which was estimated by the WSJ in April to still have about 50% market share of the rapidly-fragmenting online secondary marketplace), and other companies of its ilk, should be better-regulated, and have customer service policies that heavily penalize them in the event that they fail to produce the tickets that they sell. It’s impossible to disagree.

StubHub seems genuinely embarrassed that this occurred. “Moving forward, we will be working on updating and perfecting our user agreement to avoid any confusion in these types of occurrences,” communications manager Cameron Papp tells TBL. “It should be noted that our user agreement already states ‘[u]nder no circumstances may Sellers cancel orders at one price and repost the same tickets for a higher price.’ Simply put, the way this customer was handled was a mistake. We hold our sellers to a high standard and we absolutely do not condone market manipulation like this.”

“As you can imagine, as a marketplace that sells one ticket every second, situations like last week will occur,” Papp continues. “People have every right to be upset by the way this customer was handled. Frankly, our entire company is upset about it. But the reality is, over the course of our history, when situations like this have happened, we have done everything in our power to get our buyers into the event. That’s exactly what should have happened again last week and we will learn from this mistake.”

Papp noted that StubHub spent $5 million (note: this number indicates gross expenditures, as opposed to net losses) to make sure that everybody who bought a ticket from them for Super Bowl XLIX between the Seahawks and Patriots last year actually got into the game when the market went awry. There, brokers got caught in a market where they were “short selling.” This means they were gambling on prices to decrease as the game got closer, and waiting to purchase the actual tickets that they’d already sold. Prices kept rising and they were unable and/or unwilling to put up the cash to cover their bad bets.

At the time, Darren Rovell reported that not every entity rectified this problem:

"[A Seahawks fan] bought a $2,100 ticket listed on SeatGeek, which pulled the seat from a company called Prominent Tickets. “Due to unforeseen circumstances, we have not received our normal allotment of Super Bowl inventory,” read an email sent from the company to Kikuchi. “In our 26 years of business, we have never seen a market with such limited availability to the public … If the tickets were out there, we would rather pay to fill your orders, but we cannot buy tickets that do not exist.” The company’s terms and conditions, which a customer must check, absolves it from liability but does not represent that tickets that are listed might not be in its possession. “Now when I think about this game, I get sick to my stomach, knowing I’m not going to be in the stadium,” said Kikuchi, who added he had no choice but to take the company’s offer of two times what he paid."

For the Thanksgiving game between the Packers and Bears, in which Brett Favre appeared at halftime and embraced Bart Starr, two hard tickets that my parents bought on eBay (StubHub’s parent company) had barcodes that just didn’t scan. By some manner or another, their tickets had been sold twice.

After a fiasco that wound up costing them around a quarter of the game, a sympathetic Packers employee sold them a different pair of seats at face value, and they were later refunded by eBay. Because of this screwy transaction, they actually ended up saving over $400 (the original tickets they bought were well above face), but they would have been screwed if not for flexibility on the part of the Packers organization that I cannot fathom would be universally extended across America.

What if they’d traveled from the East Coast and been left, literally, out in the cold?

Frankly, for once-in-a-lifetime events—which involve extensive planning, emotional energy, and often travel—100% refunds are profoundly inadequate. This is a marketplace in which the stakes are so high that companies need far greater liability to dis-incentivize mishandled transactions and/or unscrupulous brokers. When the buyer does not get into the building, anything less than 10 times the purchase price for a ticket is not a strict enough punishment.