“We were David, and they were Goliath, and they stole our slingshot,” Season Ticket Solutions cofounder Tagg Romney (son of Massachusetts Gov. Mitt Romney) told The Boston Globe.
STS is suing for $100 million in punitive damages, citing misappropriation of trade secrets and breach of a non-disclosure agreement.
A Ticketmaster spokesman told Pollstar the company does not comment on pending litigation.
According to Romney, STS was developing software in 2001 that would allow sports teams to conduct online ticket exchanges and resales for season ticket holders. By canceling the bar code on one ticket and then reissuing a new one, STS’s software would allow companies to avoid shipping charges. He told the Globe that teams could make $1.5 million to $2 million annually by charging for the service.
STS was supposedly in talks with the National Hockey League when TM stepped in. According to the lawsuit, Ticketmaster CEO John Pleasants told the NHL to hold off on the negotiations because TM was “intending to either purchase a company that could provide similar services or would be offering its own service in the future.”
TM then agreed to buy Season Ticket Solutions for $12.5 million, according to the lawsuit, supposedly telling the principals that Ticketmaster was “heart-attack serious about completing the transaction.”
The two companies then entered a two-month due diligence period where TM gained access to STS’s software, the lawsuit claims. At the end of the two months, TM allegedly pulled out of the agreement. Then, three months later, it launched TeamExchange and GroupManager, which the lawsuit alleges was similar to STS’s property.
Season Ticket Solutions then went out of business and sold its assets, the Globe said.