The Frontstretch: Kentucky Speedway Lawsuit May Have More Merit Than Originally Thought by Jeff Meyer -- Friday April 6, 2007

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Kentucky Speedway Lawsuit May Have More Merit Than Originally Thought

Voices From The Heartland · Jeff Meyer · Friday April 6, 2007

 

In July of 2005, Kentucky Speedway filed suit against NASCAR and ISC on anti-trust grounds. Having dreamt for years that one day the track would gain its own Nextel Cup date, the owners of the facility found themselves left with no choice but to sue when they discovered NASCAR had no intentions of giving them the series they were looking for. In part, the suit alleges that "NASCAR and ISC illegally conspire to keep Nextel Cup dates away from non-ISC tracks."

Longtime readers of this column should know that I have said this all along. However, there were a few out there that did not share my views. As one reader wrote after I had written a article about the subject, Voices From the Heartland: Finally, NASCAR being sued for violating 12-4-A, "Ever hear of the proverbial snowball’s chance in hell? Don't take my word for it. According to the lawyer that represented Texas Motor Speedway in their failed suit over alleged anti-trust violations, they have less of a chance than that snowball (of getting what they want)."

After the initial filing in 2005, not much else was heard about the suit until June of 2006. That's when a group calling themselves "UNITE HERE" suddenly started showing up at races asking fans to sign a petition to "save stock car racing as we know it". All in all, saving stock car racing sounded like a good thing to do, but having been "once bitten, twice shy,” I decided to investigate this group a little before jumping on their bandwagon. (Another Group Out to Dupe the NASCAR Fan)

Well, turns out UNITE HERE was nothing more than a labor union that wanted NASCAR to end its relationship with the Cintas Corporation because the Founder and CEO of Cintas was Richard Farmer, who just happens to be a part owner of Kentucky Speedway. This union had been attempting to unionize Cintas and were telling the fans that the anti-trust lawsuit that Kentucky Speedway had filed would ruin racing as we know it. UNITE HERE efforts went largely ignored, however and they, like NAMRF (National Association of Minority Race Fans) before them, quietly faded from the news after only about three weeks. (I seem to have that effect on people, don’t I!?)

Now, it is no secret that NASCAR, ISC and all the little Frances that have even yet to be born, desperately want to build new race tracks in New York City and somewhere in the state of Washington. They have spent years and millions of dollars trying to accomplish this feat in NYC, but FINALLY had to give it up in November of last year after their Staten Island project fell completely on its face.

Since then, (and long before actually) they have turned all their attention to the state of Washington, even though they were not thoroughly welcomed. While NASCAR was looking to warm the public, the public became warm to the political maneuvering the sport was doing in order for them to simply achieve financial gain.

"We might as well dispense with calling these things ‘public-private partnerships’ because they really aren't,” said Washington State Treasurer Mike Murphy during a recent interview. "The private side gets rich. The public side gets screwed."

Despite the pessimism by Washington’s government brass, anyone other than the "casual fan" (yes, that fan so obsessively sought by Brian France) should know that NASCAR, ESPECIALLY NASCAR, does not like to lose. It does not matter what the morals or ethics of a situation may be; if it will add to the profits of the France family, they are more tenacious than a pitbull with a bad case of fleas and lockjaw. Point being, they simply do not give up; no one expected a little opposition by the legislature to be the be-all, end-all in NASCAR building a track in the state.

So, why then was it announced suddenly on April 3rd that ISC and NASCAR have abandoned their current efforts to do just that? Those efforts, in case you have been in line to use the bathroom during the latest phantom debris caution, called for ISC to pay $180 million towards a $368 million speedway facility, with the residents of Washington picking up the rest of the tab. The Washington State Legislature was mulling it over; no final decision had been made on the issue.

"Additional changes to the legislation were unacceptable and would have had a significant negative impact on our financial model for the Speedway," said Grant Lynch, president of Great Western Sports, a subsidiary of ISC. "Therefore, we have decided to no longer pursue the Speedway development."

"We're not going to discuss the specific changes that were proposed to us that made us come to this decision," said ISC spokesman Lenny Santiago. "As a public company, we need to be accountable to our shareholders."

Shareholders is the keyword here, and Kentucky Speedway lawyers want to know just exactly who is sharing when it comes to the Frances, NASCAR and ISC.

Is it any coincidence that on Friday, March 30th, during a conference call between lawyers for Kentucky Speedway, NASCAR, ISC, and a U.S. District Judge, that the question of NASCAR/ISC ownership came up?

"Brian France, the current chairman and CEO of NASCAR, holds no stock in NASCAR but does hold stock in ISC,” the judge wrote in a memo. "Jim France (Bill Jr's brother), CEO and board member of ISC, is also vice chairman and one of two current owners of NASCAR. Lesa France Kennedy, president and board member of ISC, is also a vice president and board member of NASCAR and one of its two current owners."

“Plaintiff [Kentucky Speedway] argues that if Jim France and Lesa Kennedy are either the majority or sole owners of NASCAR, as plaintiff suspects, then their roles as CEO and president of ISC provides them with a motive to aid NASCAR’s alleged monopoly.”

“Similarly, plaintiff asserts that if Brian France, chairman and CEO of NASCAR, does not hold stock in NASCAR but only in ISC, he may be motivated to aid ISC in its alleged attempt to monopolize the hosting market.”

Now, I ask you the logical question off those remarks: if NASCAR and ISC are not monopolizing the awarding of dates, as Kentucky Speedway claims, how could they have guaranteed themselves a Cup date had the two new tracks been built? Does their sudden abandonment of their Washington plans have any thing to with the sudden interest of who really owns what at NASCAR and ISC?

Only time will tell, but you know how it is with NASCAR….where there's smoke, there's fire retardant foam! Seems the foam under the France's seats may be getting a little warm as of late.

Stay off the wall,

Jeff Meyer

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M. B. Voelker
04/06/2007 06:52 AM
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People wanting to see Nascar brought down by the Kentucky Speedway lawsuit are not thinking the issue through.

The legal precedent involved in allowing one company to sue in order to force another company to do business with them would be huge.

Do you really want the courts telling you where you have to locate your business? Do you want a different town to be able to sue to make the company you work for move their plant to that town?

The government has no business telling a business how, where, and when it can do its business. People who are focused on seeing Nascar get the tables turned on it need to open their eyes to the bigger picture of what such a decision could potentially mean for every other business in the US.

Mark Rubley
04/06/2007 07:54 AM
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Of course the government can and does…The Justice Department has been doing it for years…... I don’t think this is any different. NA$CAR has worked them selves into a corner once again… but don’t worry, as slippery as they are, they’ll wingle free.

Brian France Sucks
04/06/2007 08:49 AM
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The proverbial $hit is hitting the fan. The greedy folks we call the France$ are starting to smell the stench. NA$CAR is one of the more blatant examples of anti-trust violators we have seen in some time. Bottom line is that if you are not ISC affiliated, you have no chance to get a date. That is, until now…. The France family will be caught with their pants around their ankles on this one. Just wait and see. The thing they should’ve realized a long time ago is that while it is good to venture out into new markets on occasion, you have to stick with a strong base (i.e. the Southeast and Midwest) where support is greatest. Where have all these tracks gone? To fickle places like Fontana where they can’t even fill 2/3 of the stands, and rightfully so, because the racing is subpar. Also, SoCAl natives are notoriously fleeting and fickle, fair-weather at best. Want proof? The most popular sport in the USA has two great examples (Rams and Raiders). Nail ‘em to the wall KY.

Scott
04/06/2007 09:21 AM
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I am glad to see that this is finally coming out! The France family has been doing this for years. I can promise you that if any of the ISC-owned tracks were owned by someone such as Bruton Smith, they would not have some of the events that they do. NASCAR has worked hard at making sure all of the ISC tracks have several events and are leaving other tracks out such as Kansas.

The France family is too busy trying to go to New York, California and Washington. They need to realize that the majority of the people in these areas could really care less about NASCAR. Just look at the empty seats at Fontana! They need to concentrate on the Southwest and Midwest where the majority of the fanbase is.

Greg
04/06/2007 10:39 AM
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I think Mr. Voelker is missing the point. The courts are not forcing NASCAR to do business with Ky. Speedway, they are forcing the France family to choose whether they want to be in the racing business or if they want to be in the track business. NASCAR has been operating monopolistically for years and in a very public fashion. Personally, I am surprised that some US Attorney doesn’t file an anti-trust lawsuit against the 2 companies. However, the France family stuffing the Bush Administrations pockets with loot will prevent that from happening.

Bruton Smith must hold something very big over the France Family as they have never crossed him. It’s the Bahre’s and Dover Motorsports that will get screwed in Ky’s lawsuit.

M. B. Voelker
04/06/2007 11:31 AM
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Nascar is not a monopoly because there are plenty of other racing series in the US — IRL, Champcar, ARCA, USAR Hooters ProCup, NHRA, IHRA, DIRT, and all those sprint car organizations that I can never keep straight.

The fact that Nascar is the most successfull of the American racing series does no make it a monopoly.

So “anti-trust” arguments are completely irrelevant.

Companies have every right to do business on their own terms and to have various divisions focusing on different fields and different products.

Sounds like some people need a basic introduction to the principles of a free market and a free economy. I recommend the works of Thomas Sowell.

Dennis
04/07/2007 10:56 PM
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Anyone who thinks the Government would have no standing on this issue should look into a little company that was know as the Bell System. They invented the phone, laid the transatlantic cables, strung the poles coast to coast and world wide. Then the G-Men made them give up their property to others because all that they had created was “unfair”. That legal precedent was set decades ago and in 2005 the Supreme Court ruled that personal property rights are dead in the USA.

 

Contact Jeff Meyer

Recent articles from Jeff Meyer:

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