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Monday, July 30, 2007
Cavaliers accuse Ticketmaster of acting as a monopoly

Associated Press

CLEVELAND -- The Cleveland Cavaliers filed a federal lawsuit against Ticketmaster Inc. on Monday, accusing the broker of acting as a monopoly.

The Cavaliers allege in the lawsuit that Ticketmaster is trying to prevent the team's Flash Seats secondary-ticketing Web site from competing with the ticketing giant.

Flash Seats provides season ticket holders a way to sell and transfer seats electronically -- a system that is superior to Ticketmaster's TeamExchange program, the lawsuit says.

"Ticketmaster is using its market power to exclude competition and inhibit innovation," said Sam Gerace, chief executive officer of Flash Seats. "I can only conclude they're threatened by Flash Seats."

The Cavaliers and Flash Seats contend that Ticketmaster is coercively seeking to enforce its primary-ticketing contract with the Cavaliers to exclude Flash Seats, saying that the contract prohibits the team from doing business with Flash Seats.

Ticketmaster is trying to force the Cavaliers to use Ticketmaster's TeamExchange system, the lawsuit claims. The company sent a letter to Cavaliers president Len Komoroski in February demanding the team suspend use of Flash Seats and stop trying to sell the system to other teams, claiming breach of contract.

Ticketmaster sued the Cavaliers and Flash Seats earlier this month in U.S. District Court in California asking the court to rule that it has exclusive rights to handle all the team's ticket sales.

West Hollywood, Calif.-based Ticketmaster, a unit of New York-based IAC/InterActiveCorp., is the largest ticket broker in the world. A phone message left for spokesman Ed Stewart was not immediately returned.

The Cavaliers are owned by Dan Gilbert, who is also the principal owner of Flash Seats.