Ticketmaster Sued
Posted: January 26, 2005 10:11 am
http://www.boston.com/business/technolo ... ster_suit/
A Boston company cofounded by Governor Mitt Romney's son said yesterday it has sued Ticketmaster for $100 million, alleging the ticket-selling company stole its software technology during negotiations to buy the firm in 2001.
Tagg Romney, a Belmont resident and one of three founders of the now-defunct Season Ticket Solutions, said Ticketmaster offered to buy the company, then reneged on the deal and began marketing its own version of software it copied during the acquisition negotiations.
"We were David, and they were Goliath, and they stole our slingshot," Romney said in a telephone interview. "They were able to develop in three months what took us three years to develop."
A Ticketmaster spokesman said last night the company "does not comment upon pending litigation." The lawsuit was filed in Los Angeles Superior Court on Jan. 13.
According to Romney, Season Ticket Solutions was on the verge of a major corporate breakthrough in 2001. The company had developed software that enabled sports teams to conduct online ticket exchanges and resales for season ticket holders wanting to sell unwanted tickets.
By canceling the bar code on the seller's ticket and reissuing a new bar code to the buyer, a team could complete a ticket resale quickly, cheaply, and without incurring shipping charges, Romney said. He estimated popular teams could make $1.5 to $2 million a year on the fees charged for handling the transactions.
At the time Ticketmaster expressed interest in buying Season Ticket Solutions in September 2001, Romney said, the company listed among its clients the Colorado Avalanche and the Boston Celtics and was in serious negotiations with the National Basketball Association and the National Hockey League.
According to the lawsuit, John Pleasants, Ticketmaster's chief executive, met with the NHL in New York during the summer of 2001 and requested that it not enter into a deal with Season Ticket Solutions "as it was intending to either purchase a company that could provide similar services or would be offering its own service in the future."
The NHL complied with the request, according to the lawsuit. Romney said NHL officials have made a taped statement that would be used at trial.
Ticketmaster eventually agreed to buy Season Ticket Solutions for $12.5 million, according to the lawsuit, which also states that Ticketmaster claimed it was "heart-attack serious about completing the transaction."
The two parties subsequently signed a nondisclosure agreement and entered a two-month due diligence period in which Ticketmaster gained access to the software and business plans of Season Ticket Solutions. At the end of the due diligence period, the lawsuit claims, Ticketmaster pulled out of the deal and three months later unveiled software that was nearly identical to the software developed by Season Ticket Solutions.
According to Romney, Ticketmaster's versions of the software, called TeamExchange and GroupManager, are now being used by a number of teams, including the New York Knicks, New York Giants, Boston Celtics, the Los Angeles Lakers, San Antonio Spurs, and Golden State Warriors. The lawsuit says Ticketmaster sold its software to the NHL in 2002.
Season Ticket Solutions subsequently went out of business and sold its assets in 2003 to a California company.
Romney said the case is similar to one that resulted in a jury award of $116 million in 2001. In that case, he said, a small company called X-IT claimed its technology for an emergency escape ladder was stolen by Walter Kidde Portable Equipment during sale negotiations. Romney said the jury award was reduced by an undisclosed amount as part of a settlement between the two companies.
Romney, 34, now works at Reebok as director of brand strategy. He said his other partners are Joel Milne and Bill Bridgen.
A Boston company cofounded by Governor Mitt Romney's son said yesterday it has sued Ticketmaster for $100 million, alleging the ticket-selling company stole its software technology during negotiations to buy the firm in 2001.
Tagg Romney, a Belmont resident and one of three founders of the now-defunct Season Ticket Solutions, said Ticketmaster offered to buy the company, then reneged on the deal and began marketing its own version of software it copied during the acquisition negotiations.
"We were David, and they were Goliath, and they stole our slingshot," Romney said in a telephone interview. "They were able to develop in three months what took us three years to develop."
A Ticketmaster spokesman said last night the company "does not comment upon pending litigation." The lawsuit was filed in Los Angeles Superior Court on Jan. 13.
According to Romney, Season Ticket Solutions was on the verge of a major corporate breakthrough in 2001. The company had developed software that enabled sports teams to conduct online ticket exchanges and resales for season ticket holders wanting to sell unwanted tickets.
By canceling the bar code on the seller's ticket and reissuing a new bar code to the buyer, a team could complete a ticket resale quickly, cheaply, and without incurring shipping charges, Romney said. He estimated popular teams could make $1.5 to $2 million a year on the fees charged for handling the transactions.
At the time Ticketmaster expressed interest in buying Season Ticket Solutions in September 2001, Romney said, the company listed among its clients the Colorado Avalanche and the Boston Celtics and was in serious negotiations with the National Basketball Association and the National Hockey League.
According to the lawsuit, John Pleasants, Ticketmaster's chief executive, met with the NHL in New York during the summer of 2001 and requested that it not enter into a deal with Season Ticket Solutions "as it was intending to either purchase a company that could provide similar services or would be offering its own service in the future."
The NHL complied with the request, according to the lawsuit. Romney said NHL officials have made a taped statement that would be used at trial.
Ticketmaster eventually agreed to buy Season Ticket Solutions for $12.5 million, according to the lawsuit, which also states that Ticketmaster claimed it was "heart-attack serious about completing the transaction."
The two parties subsequently signed a nondisclosure agreement and entered a two-month due diligence period in which Ticketmaster gained access to the software and business plans of Season Ticket Solutions. At the end of the due diligence period, the lawsuit claims, Ticketmaster pulled out of the deal and three months later unveiled software that was nearly identical to the software developed by Season Ticket Solutions.
According to Romney, Ticketmaster's versions of the software, called TeamExchange and GroupManager, are now being used by a number of teams, including the New York Knicks, New York Giants, Boston Celtics, the Los Angeles Lakers, San Antonio Spurs, and Golden State Warriors. The lawsuit says Ticketmaster sold its software to the NHL in 2002.
Season Ticket Solutions subsequently went out of business and sold its assets in 2003 to a California company.
Romney said the case is similar to one that resulted in a jury award of $116 million in 2001. In that case, he said, a small company called X-IT claimed its technology for an emergency escape ladder was stolen by Walter Kidde Portable Equipment during sale negotiations. Romney said the jury award was reduced by an undisclosed amount as part of a settlement between the two companies.
Romney, 34, now works at Reebok as director of brand strategy. He said his other partners are Joel Milne and Bill Bridgen.
