NBA: Timberwolves face class-action lawsuit

Target Center will be packed when the NBA’s hottest ticket, the record-chasing Golden State Warriors, play the Minnesota Timberwolves tonight. Come Wednesday, the Wolves must respond to the class-action lawsuit filed against them in Hennepin County District Court.
The Wolves are being sued by season-ticket holders for the “unlawful limitations” they’ve been accused of imposing with their use of the Flash Seats digital ticketing marketplace, which started this season. The suit, filed by law firm Zimmerman Reed, claims a breach of contract because the change to Flash Seats occurred after season-ticket renewals. The suit also claims “economic harm” for fans and a violation of Minnesota Antitrust Law because of the price floor established on resale.
The lawsuit claims the price floor has been set at 75 percent of a ticket’s face value and this exceeds market value for a Wolves team with a 22-47 record.
“The team is prioritizing the ticket pricing over the benefit of having fans in the arena,” sports legal analyst Daniel Wallach said. “The home-court advantage has become subordinated to the bottom-line advantage.”
Timberwolves president Chris Wright told the Pioneer Press in January that the pricing strategy was established to “make sure that our tickets are not completely undervalued by the market.”
Now, Wallach said the case has two initial steps for the plaintiffs: overcoming an expected motion to dismiss and the class needing to be certified.
“If they get there, then it becomes intriguing,” said Wallach, an attorney with Florida-based firm Becker and Poliakoff. “It will be one that is watched closely by the sports industry.”
“If this gets to the class-certification stage, the Timberwolves will be motivated to settle the case quickly,” Wallach predicted.
When the lawsuit was filed March 3, Wright said the franchise was “confident that Flash Seats supplies the best possible experience for our fans.”
Wallach estimated this civil case could take years to play out. Until then, there is no available alternative for fans who have had negative experiences with Flash Seats.
“Unless there is an injunction issued by the court, these are the rules of the road,” Wallach said. “For teams that have losing records and inflated or artificially high prices, what fans and the arena is potentially looking at are empty seats.”
Strong demand to attend the Warriors game will be an anomaly at Target Center this season. Through 33 home games, the Wolves rank 29th of 30 NBA teams in attendance, 14,106 fans per game. The NBA’s MVP, Steph Curry, and the Warriors (62-7) - who lost Saturday night at San Antonio - will provide a reprieve as they’re pursuing the NBA’s all-time best record of 72-10 set by the Chicago Bulls in 1995-96.
The Wolves’ use of Flash Seats has cut out the secondary marketplace StubHub. As of Saturday afternoon, zero tickets were available for Monday’s Wolves-Warriors game. Meanwhile, the Minnesota Wild’s game Tuesday against the Pacific Division-leading Los Angeles Kings had more than 650 seats available.
But Minneapolis-based secondary marketplace Ticket King has been included as a Wolves partner in the use of Flash Seats.
Ticket King’s part-owner Mike Nowakowski said demand for Monday’s game can be compared to ticket sales during the Wolves’ deep playoff run to the Western Conference finals in 2004. The Wolves have not made the playoffs since.
“Needless to say, we’ve had some lean years in the last 10 years, but we’ve built up quite a clientele of Timberwolves fans that utilize us,” Nowakowski said. “Surprisingly, it’s better this year. I think Karl-Anthony Towns and the emergence of Zach LaVine has helped things. I think those two players have kind of piqued people’s interest.”
Fans must set up an account with Flash Seats through a computer or smartphone. They then link their tickets to their phone, credit card or ID to enter Target Center.
They can exchange or sell tickets through the Flash Seats software, which is used to varying degrees by a handful of pro teams across the country. The Wolves and Lynx became the first two teams to use Flash Seats 100 percent, Wright said.
The largest misconception Nowakowski sees is with the price floor.
The lawsuit claims, “ticket holders now are barred from selling their tickets below an arbitrarily imposed minimum price - somewhere between 75 and 90 percent of the ticket’s face value in most instances.”
Nowakowski countered that this doesn’t account for the season-ticket holder paying about 25 percent less on initial purchase of the package.
“Let’s say it’s a $200 ticket; their cost of the ticket is $150,” Nowakowski said. “The Timberwolves are selling that on a single-game basis for $200. So 75 percent of a $150 ticket is $112.50.”
Wallach said the importance of this case centers on the establishment of the price floor.
“You don’t even see this on Broadway,” he said. “You buy your ticket and you can sell it to whomever you want for whatever you want.”
According to Minnesota statutes on prohibitive acts with event tickets, “the initial seller shall not, unless authorized by the provider of the event or venue, divert tickets from the initial sale to the general public to be sold in any other manner or under any other terms.”
The state’s antitrust law reads, “any part of trade or commerce by any person or persons for the purpose of affecting competition or controlling, fixing or maintaining prices is unlawful.”
On the antitrust count, the lawsuit states, “the (Timberwolves) intentionally and wrongfully created and maintained a monopoly.”