Elite fan club sues Jazz for $19 million
- Thread starter krebstaz
- Start date
UGLI baby
Well-Known Member
Thats not what this is about.
Its about being able to sell "the rights" to the seats from season to season.
Its like the difference between selling someone your car compared to letting them drive it for a few days.
Hopper
Banned
It seems to me that one central question would be whether club members were given the right to dictate what seats were transferable. I would presume that a team is free to change it ticket sales policies at any time, absent some forfeiture or compromise of that right. This would be true even if the change in policy had the effect of diminishing benefits that some or all fans once enjoyed.
Hopper
Banned
According to the "Arena Digest" (whatever the hell that is, presumably some kinda specialized trade rag): "Now, it's not quite sure under what legal theory the Jazz 100 Club members are suing: telling a court you have a guaranteed right to a profit while scalping tickets may not fly on the legal front."
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Stifle Tower
Punch Bowl Re-Filler
My prediction is that the Jazz are going to win this one. From the little I've read, it appears Larry H gave the 100 Club members many special privileges, including the right to purchase their courtside seats. But I seriously doubt the language ever states that they will be the ONLY ones ever granted the right to re-sell their seat rights. Just because no others could sell their seat rights at the time the 100 Club was founded doesn't mean that would always be the case.
Look, it's like buying shares in a small company. If that company subsequently issues a huge stock offering to raise capital, you run the risk your shares will decline (unless it's a hot company). If you were around from Day 1, it's not a big deal. Your stock will still be much higher than when you purchased it. But if you recently bought a ton of shares, then it's a problem. The real losers in this deal are the suckers that got in on the last days of the scheme and bought courtside seat rights from the original owners. They're stuck just like people who bought homes in 2006/early 2007 when the market peaked.
If Greg and Gail use the extra money to sign FA's and exceed teh tax threshold each season, then I support them. If it's just a scheme to line their pockets with more money, then I hope the litigation costs eat them alive.
Look, it's like buying shares in a small company. If that company subsequently issues a huge stock offering to raise capital, you run the risk your shares will decline (unless it's a hot company). If you were around from Day 1, it's not a big deal. Your stock will still be much higher than when you purchased it. But if you recently bought a ton of shares, then it's a problem. The real losers in this deal are the suckers that got in on the last days of the scheme and bought courtside seat rights from the original owners. They're stuck just like people who bought homes in 2006/early 2007 when the market peaked.
If Greg and Gail use the extra money to sign FA's and exceed teh tax threshold each season, then I support them. If it's just a scheme to line their pockets with more money, then I hope the litigation costs eat them alive.
Hopper
Banned
Yeah, what he said.
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Hopper
Banned
Yeah, Bentley, I agree. That part does. And it may be compensable too. In this context, I take "club" to mean the 100 club, not the "Jazz club," i.e., the Utah Jazz francise.
It's pretty clear the person who wrote the article isn't a lawyer, or even a very good writer. That sentence raises tons of questions and provides no answers.
"Attempted" to change the rules? So they were unsuccessful? What stopped them?
Unilaterally? I was under the assumption the team was wholly owned by the Miller family. Who else would have to agree? Are the rules amended by bilateral agreement? Multilateral agreement? Does the NBA have the right to veto a club's operating rules? Do the 100 Club members have equity in the club some how? Did the Jazz concede to the club members some sort of power to determine the club's operating rules?
A horrendous piece of writing. Practically the opposite of clarity.
Anyone seen a copy of the complaint that's available on the internet? It would be even better if we could get a copy of the complaint that had the exhibits attached. Presumably whatever agreement establishes the club and the purchasing contracts would be exhibits.
Hopper
Banned
Subsequent secondary sales (resales) aside, Kicky, you have to assume that the original club members paid something for their membership and had a legitimate expectation (via agreement) to receive something in return. The original members may have paid $1,000 each, $10,000 each, $1,000,000 each, or whatever. I have not seen where it says what the amount was, but the higher that amount, the more you would expect them to receive in return. The first article actually says they were to receive "equity" in "the club":
"According to a lawsuit filed Friday in 3rd District Court, former Jazz owner Larry H. Miller created the club in 1987 as a "selective organization that entitled its members to exclusive rights and privileges," including equity in the club, ownership of "some of the best seats" in EnergySolutions Arena and a 20-percent discount on season tickets."
To me that sounds like the 20% discount was part of the consideration. The allegation of "exclusive rights and privileges," insofar as it includes "ownership of seats" may be misleading. It really only says "ownership of some of the best seats," and I don't think they are alleging that that benefit has been taken away from them. The "equity" in the club allegation is also ambiguous. I don't think "the club" really means the Jazz franchise, but merely the "Jazz 100 club." What assets that "club" holds to begin with is not specified.
Another interesting question was brought up by the Arena Digest. Even assuming that there was some alleged quid pro quo giving a monopoly on "scalping tickets," would it even be enforceable (legal)?
"According to a lawsuit filed Friday in 3rd District Court, former Jazz owner Larry H. Miller created the club in 1987 as a "selective organization that entitled its members to exclusive rights and privileges," including equity in the club, ownership of "some of the best seats" in EnergySolutions Arena and a 20-percent discount on season tickets."
To me that sounds like the 20% discount was part of the consideration. The allegation of "exclusive rights and privileges," insofar as it includes "ownership of seats" may be misleading. It really only says "ownership of some of the best seats," and I don't think they are alleging that that benefit has been taken away from them. The "equity" in the club allegation is also ambiguous. I don't think "the club" really means the Jazz franchise, but merely the "Jazz 100 club." What assets that "club" holds to begin with is not specified.
Another interesting question was brought up by the Arena Digest. Even assuming that there was some alleged quid pro quo giving a monopoly on "scalping tickets," would it even be enforceable (legal)?
Stifle Tower
Punch Bowl Re-Filler
Wow, I should have edited that sentence before posting! My English teacher would be mortified. Course, she was half crazy (in CA you can't get rid of terrible teachers due to tenure), so she's probably out howling at the moon right now.
So who's going to the District Courthouse to download the complaint from Utah's XChange service?
Hopper
Banned
https://sports-entertainment-law-re...f-nba’s-jazz-sue-team-in-utah-district-court/
"Specifically, the suit alleges that the new policy allowing all season ticket holders to sell the rights to their seat locations has taken away the “exclusive” right to transfer seat location component of Club Membership, causing their memberships in the Jazz 100 Club to plummet in value... Later in the pleading, however, the Plaintiff estimates the negative impact on the value of Club Membership by noting that, as a consequence of the policy change allowing all season ticket holders to sell their seat locations, this year a non-club member has sold equivalent seats for $20,000 per seat... However, this conclusion seemingly undermines the point, previously made by the Plaintiff itself, that the Membership includes privileges and rights (and financial value) beyond and in addition to the right to sell the prime seat location."
Might make sense to someone here. Can't honestly say that I really follow the argument here.
Is the point simply that if equivant seats sell for $20,000, then the value of those seats cannot convincingly be claimed to be worth $800,000? I'll buy it, if that's it.
"Specifically, the suit alleges that the new policy allowing all season ticket holders to sell the rights to their seat locations has taken away the “exclusive” right to transfer seat location component of Club Membership, causing their memberships in the Jazz 100 Club to plummet in value... Later in the pleading, however, the Plaintiff estimates the negative impact on the value of Club Membership by noting that, as a consequence of the policy change allowing all season ticket holders to sell their seat locations, this year a non-club member has sold equivalent seats for $20,000 per seat... However, this conclusion seemingly undermines the point, previously made by the Plaintiff itself, that the Membership includes privileges and rights (and financial value) beyond and in addition to the right to sell the prime seat location."
Might make sense to someone here. Can't honestly say that I really follow the argument here.
Is the point simply that if equivant seats sell for $20,000, then the value of those seats cannot convincingly be claimed to be worth $800,000? I'll buy it, if that's it.
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Hopper
Banned
"This is a major windfall for season ticket holders because they have not paid for the benefit," Melchior told the Deseret News. "This makes a huge difference. It negates the value of the seat positions."
"Negates the value of seat positions," eh? Is a courtside seat now worth no more than the highest bleacher seat, that the idea? Is the complaint that others are getting a windfall? If so, I can see that. I had a homey that inherited $10,000 from a rich uncle. I explained to him, very carefully, that I had been damaged because I didn't get the same, and that, since he hadn't paid to get the money, he owed some to me. The fool couldn't even understand that. Can you BELIEVE it!?
"Negates the value of seat positions," eh? Is a courtside seat now worth no more than the highest bleacher seat, that the idea? Is the complaint that others are getting a windfall? If so, I can see that. I had a homey that inherited $10,000 from a rich uncle. I explained to him, very carefully, that I had been damaged because I didn't get the same, and that, since he hadn't paid to get the money, he owed some to me. The fool couldn't even understand that. Can you BELIEVE it!?
Hopper
Banned
Well, it depends on the details of the contract I spoze, Scorp, which haven't really been made clear. But on the face of it, I can't see where the main claim is valid. They may well have been ripped off on meals, and the discontinuation of the 20% discount was probably wrong, but I can't see where they were expressly given a monolopy on scalpin tickets, or even why they think such a "deal" would be enforceable if it existed.
Why do you think it's valid?
It's pretty clear that the articles are quoting from the body of the complaint rather than from the contractual terms themselves. I'm reserving judgment until I can see a copy of the complaint with the exhibits attached.
The whole main claim relies upon the status of the right as "exclusive." Given that PSL's were not common in the late 1980s, I have no idea if it was even contemplated they would open the rights up to others at any point in the future. If they never thought they were going to offer it to anyone else, it's highly possible the "exclusive" nature of the right was never memorialized in the Club 100 terms. It also sounds like the "equity" they own in the club is almost like a conditional lien that gets triggered if the club ever moves rather than a true ownership right. The entire club's status is so bizarre that it's impossible to have an opinion on the merits of the suit without seeing the agreement.
Now the secondary food value claim I have no problem believing.
The whole main claim relies upon the status of the right as "exclusive." Given that PSL's were not common in the late 1980s, I have no idea if it was even contemplated they would open the rights up to others at any point in the future. If they never thought they were going to offer it to anyone else, it's highly possible the "exclusive" nature of the right was never memorialized in the Club 100 terms. It also sounds like the "equity" they own in the club is almost like a conditional lien that gets triggered if the club ever moves rather than a true ownership right. The entire club's status is so bizarre that it's impossible to have an opinion on the merits of the suit without seeing the agreement.
Now the secondary food value claim I have no problem believing.
Hopper
Banned
I think I seen somewhere where it said there wasn't any formal contract, but that the "operating rules" outlined the terms of membership, etc. If I remember rightly, Miller was given the right to make the operating rules and was given "stewardship" of the club.
Like that there one guy done said in Animal House, eh? "Ya screwed up, Flounder. Ya trusted us."
Like that there one guy done said in Animal House, eh? "Ya screwed up, Flounder. Ya trusted us."
I'd personally be astonished if Salt Lake's business leaders were willing to give up six figures and not have whatever they were purchasing enshrined in some sort of writing. If that's the case, I guess that tells you what it takes to succeed in business in Salt Lake City.
If it's the case that the "operating rules" outlined the terms of the membership then the action comes down to who, if anybody, has the right to amend the operating rules and under what terms.
In any event, for them to have a case at all they'll have to have some showing of proof regarding exclusivity or some other contractual duty on the part of the team. That should mean attaching either the current or a previous version of the operating rules to the complaint if no formal contract exists.