Comment   |   Volume 165, Issue 2

Revoking the Revocable License Rule: A New Look at Resale Restrictions on Sports Tickets

By
165 U. Pa. L. Rev. 433 (2017).

January 2017












Most sports fans consistently rely on the secondary ticket market. After all, the secondary ticket market provides fans with numerous benefits, including the opportunity to obtain tickets to sold out, high‐profile events and the ability to resell tickets to recoup the cost of a ticket for an event they cannot attend. But some key players—namely, primary ticket sellers like sports teams—have lamented the rise of the secondary market, complaining that resale exchanges unfairly profit from the teams’ labor and diminish the value of buying tickets directly from the teams. Consequently, teams have begun to develop new initiatives to curb the growth of the secondary market, including establishing official team resale exchanges to compete with sites like StubHub, prohibiting season ticket holders from selling tickets on unofficial resale exchanges, and implementing ticket delivery procedures that make it more difficult to resell tickets. Fortunately for teams, the law cuts squarely in their favor as courts, academics, and industry professionals alike adhere to the late nineteenth century notion of tickets as fully revocable licenses. As such, teams are free to impose resale restrictions as they see fit.

But in this Comment, I argue that lawmakers should reconsider the extent to which teams can continue to use the revocable license rule to restrict ticket holders’ resale rights. I show how the revocable license rule, though widely accepted today, was criticized and often rejected by early twentieth century courts and academics for seemingly allowing proprietors to unfairly and arbitrarily exclude innocent ticket‐holding patrons. I then explain how business incentives nevertheless prevented proprietors from abusing the rule and how judges and lawmakers relied on the assumption that these incentives would prevent the rule from being abused. In doing so, I show that the rule was actually adopted for a very limited purpose—namely, to protect a proprietor’s right to exclude unruly patrons. Given that limited purpose, I argue that courts and scholars have gradually—but improperly—extended the rule of tickets as revocable licenses such that primary ticket vendors now wield a type of unilateral power over ticket holders that the original proponents of the rule never intended to establish. Therefore, I urge that lawmakers stop allowing the notion of tickets as revocable licenses to inform the industry’s discourse about ticket holders’ rights. Finally, I explore various practical legislative solutions to reform the secondary market, which are free from the rigid assumptions of the revocable license rule and which account for the legitimate concerns of both ticket holders and teams.

Revoking the Revocable License Rule: A New Look at Resale Restrictions on Sports Tickets - PennLawReview.com

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