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NASCAR Faced With Court Challenge

Motor sports: Lawsuit alleges organization engages in monopolistic business practices.

April 08, 2002|ED HINTON | ORLANDO SENTINEL

FORT WORTH — NASCAR, the monolithic organization that has controlled stock car racing in this country for 54 years, once again is under scrutiny. And the person challenging it is controversial attorney Johnnie L. Cochran Jr.

Cochran says he has "in excess of 50 lawyers" ready to examine the practices of NASCAR. At the center of the charges is the claim that NASCAR engages in "monopolistic" business practices.

A federal lawsuit filed earlier this year on behalf of the shareholders of Speedway Motorsports Inc., the parent company of Texas Motor Speedway, claims that NASCAR has a monopoly over stock-car racing by owning the governing body and by having controlling interest in International Speedway Corp., the company that operates 13 major auto tracks.

The suit really is aimed at the France family, which owns NASCAR.

In the suit, Texas Motor Speedway is asking for a second racing date, but it's the means to that end that make this case interesting.

"The big picture really looks like, and smacks of, antitrust," Cochran said last week. He had planned to attend Sunday's race at the glitzy, $250-million Fort Worth facility, but it was postponed because of rain. "[NASCAR] needs a second look, an outside look."

Cochran, who was part of the legal team that gained an acquittal for O.J. Simpson in his criminal trial, says he's prepared to initiate legal action that could break up the France dynasty's iron rule.

"That [breaking up NASCAR/ISC] is the logical end result, and we have the legal counsel to do it," Cochran said. "In addition, we have the resolve."

Cochran and his partners have invoked the provisions of the Sherman Anti-Trust Act of 1890 under which high-profile businesses have been sued and broken up to one degree or another.

Of the 36 races on the elite Winston Cup tour, 18 are run on ISC tracks. Of the last four expansion race dates granted by NASCAR, three have gone to ISC facilities. Of the last five granted, another date went to California Speedway, which was later acquired by ISC.

Texas Motor Speedway is not owned by ISC and wants a second date. In fact, if it gets the date, the suit may go away, according to Cochran. But if the litigation were to go forward, it would lead to a close examination of the business practices of NASCAR.

The France family has declined to comment on the matter. Mike Helton, NASCAR president, said the company does not comment on active litigation. Jim Hunter, NASCAR vice president of communications, called the suit "absolutely without foundation."

According to Samuel Cherry, the Cochran-firm partner who is supervising the litigation, damages could reach $1 billion. He said the lack of a second race at Texas has kept the stock price down.

The suit, filed in U.S. District Court in Sherman, Texas, on Feb. 13 by Speedway Motorsports shareholder Francis Ferko of Plano, Texas, lists NASCAR, ISC and Speedway Motorsports (SMI) as defendants. Ferko has declined to comment and referred all questions to his attorneys.

SMI is only a "nominal defendant," according to the suit. SMI was named so that its executives can be kept informed of all aspects of the case.

"The antitrust allegations illustrate how there is no other remedy for Speedway Motorsports," Cherry said. "They just can't create a second event, a NASCAR-formatted race, of their own. It's impossible."

That's because, according to the filing, "NASCAR has illegally maintained a monopoly in the market for the provision of the right to host a premier NASCAR-formatted stock-car race."

The suit further alleges that NASCAR has cornered the market on the best drivers and teams involved in stock car racing, in part by creating the Winston Cup points system so that drivers must participate to win the most lucrative season championship in American motor racing.

And "NASCAR has deterred drivers and their teams" from competing in non-NASCAR events, the suit claims, by "[causing] drivers to fear" that they could be targets of reprisal at NASCAR races, in the form of fines or other penalties over technical inspection of cars and driver behavior.

Cherry says he plans to use Bill France Jr.'s comments at a recent meeting of ISC stock holders to his advantage. France Jr. reportedly said that ISC was "uniquely positioned to take advantage of the growth of NASCAR."

Cherry believes that statement helps prove his case. "Sure they are [positioned]. That's because of the incestuous relationship that exists between ISC and NASCAR."

Bruton Smith, the SMI chairman who controls six tracks on the Winston Cup circuit including Texas Motor Speedway, finds himself in the middle. He sees the suit as having the potential to shake NASCAR to its roots.

"I can see that occurring," Smith said. "Anybody who's been in this [auto racing] as long as I have [nearly 50 years], I think we all look at NASCAR and ISC as one and the same. Same management, same ownership, same ol' same ol'."

Smith bought the existent date at Texas.

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