At the core of Spotlight Ticket Management’s lawsuit against StubHub and affiliate system manager AWIN is the company’s relationship with American Express. After sending what it claims is some $85 million worth of sales from AMEX customers to the ticket resale giant, Spotlight (which does business as TicketManager following a re-brand several years back) says StubHub repeatedly underpaid commissions it was owed, then watched as the eBay-owned company cut it out of the lucrative position it held as the link between the credit card company’s concierge program and the resale marketplace.
“Pursuing this lawsuit is something we did not want to do,” reads a statement sent to TicketNews from TicketManger. “We have a long-term partnership with Stubhub and have tried to work with them in good faith to ensure that we are paid what we are owed, but Stubhub has been unwilling to address the core issues in their affiliate program that systematically underpay us and, presumably, their other affiliate partners.”
According to the complaint filed in late December, Spotlight had contracted with AMEX since 2014 to provide a ticketing system “used by concierges to fill requests from Amex card members for tickets to events and experience package.” Its business model means payments from both Amex for its platform and service, but also commission from companies like StubHub which reap the benefits of such sales from the service.
Over time, Spotlight claims, it noticed a substantial discrepancy in data it was seeing from commission reports via StubHub and its own reconciliation of orders with American Express. “In early 2017, at spotlight’s behest, StubHub engaged in a transaction review process with Spotlight,” the complaint reads. “Upon information being shared among Spotlight and StubHub, StubHub paid Spotlight and additional $518,673 for unrecorded or untracked sales that occurred over just a thriteen (sic) month period, from January 2016 through March 2017.”
“StubHub previously acknowledged such deficiencies, but the problems have persisted for years and StubHub has not shown any urgency in trying to fix them,” TicketManager told TicketNews. “ We are thus left with no choice but to file the lawsuit to ensure that we are paid what StubHub promised us when we brought them our business, which has equated to over $84 million.”
These deficiencies were not remedied by the introduction of AWIN as middle-man in the affiliate program, according to the complaint. Spotlight says that it continued to point out deficiencies in the reporting and payout of commissionable transactions. But rather than remedy the alleged issues, “StubHub convinced Amex to change its business practices with respect to Spotlight.”
Specifically, StubHub allegedly convinced Amex to stop sharing its own data from these transactions with Spotlight. Once that data feed, consisting of transaction-level information from individual Amex customers, was stopped, Spotlight “discovered that its historical conversion rate of “clicks to sales” had quickly and drastically diminished. Not coincidentally, Spotlight’s historical conversion rate plummeted after StubHub contacted Amex.
Finally, in the fall of 2019, StubHub allegedly cut Spotlight out entirely. While negotiating its contract with Amex on or around September 10 of 2019, “Spotlight learned that StubHub informed Amex that StubHub claimed it was no longer able to work with Spotlight, leaving Amex the option to either end its long-time relationship with Spotlight or no longer have access to StubHub’s inventory of tickets to fulfill its secondary market card member requests.”
Estimates of what the severance of that relationship may mean in terms of lost business for TicketManager are not included in the complaint, but if the commissions related to untracked sales over a 13 month period totaled over half a million dollars, the total lost revenue from the partnership with Amex, which the complaint notes is still unresolved, are likely quite substantial.
The lawsuit, which names nine causes of action including RICO statutes, is seeking damages and that StubHub be enjoined from interfering with its business relationships, such as the one with American Express.
American Express and StubHub both declined to comment on the lawsuit, citing policy against commenting when any pending litigation is involved. A request for comment from AWIN has not received a response as of Monday afternoon.
Disclosure: TicketNews is on the AWIN system and runs affiliate ads from StubHub.com
Last Updated on January 13, 2020 by Dave Clark