Kentucky Speedway owners claim NASCAR, ISC work against the track

By Bob Pockrass - Associate Editor

Monday, April 28, 2008

David Griffin
NASCAR Scene

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Kentucky Speedway owners insist they are not just a jilted distributor but contend that NASCAR and International Speedway Corp. have worked together illegally to keep independent tracks from hosting Sprint Cup races, according to Kentucky Speedway’s appeal in its federal antitrust lawsuit against the two France family-controlled companies.

According to a redacted version of the appeal, in which some presumably sensitive information was taken out, Kentucky Speedway offers its arguments as to why a U.S. District Court judge should not have ruled in January in favor of NASCAR and ISC without allowing the case to go to trial. In his opinion, the judge rejected the validity of Kentucky Speedway’s expert economist’s testimony.

In its appeal, released Monday by the U.S. appeals court in Cincinnati, Kentucky Speedway says that NASCAR denied independent tracks Cup races until they agreed to sell to ISC at below market value. The track's appeal also says that NASCAR threatened to pull races from Las Vegas Motor Speedway because the owners refused to sell to ISC; the owners later sold to ISC-rival Speedway Motorsports.

“KYS, as a purchaser of sanctioning, cannot switch to hosting Bengals or Reds games, as suggested in the District Court’s casual
analysis...,” Kentucky Speedway’s owners assert in their appeal. “By denying independent tracks such as KYS an opportunity to host a Cup race, it is impossible for a rival sanctioning organization to gain access to a competitive set of tracks in order to gain critical mass.

“If NASCAR can control access to tracks, NASCAR will continue to succeed in its efforts to insulate itself from competition.”

NASCAR spokesman Ramsey Poston denies that NASCAR threatened to pull races from Las Vegas or other independent tracks.

“It’s absurd,” Poston said. “It’s completely false.”

NASCAR, the sanctioning body that is privately owned by the France family, and ISC, the track operating company whose voting stock is controlled by the France family, have denied that they illegally work together to keep tracks from having Cup races. NASCAR has insisted that as a sanctioning body, it alone has the right to determine where it races. ISC has rights to 23 of the 39 Sprint Cup events.

Kentucky Speedway, owned by an investment group led by Jerry Carroll, opened in 2000 and has played host to NASCAR Craftsman Truck and NASCAR Busch (now Nationwide) Series races. Both of those series currently have events on the 1.5-mile oval.

“A monopolist such as NASCAR cannot hide behind ‘freedom to contract’ when its intent is the elimination of competition and not to
advance a legitimate business purpose,” Kentucky Speedway says in its appeal.

The Kentucky Speedway appeal centers the reasons why officials believe their expert testimony should be allowed and offers more examples of how they say NASCAR and ISC work illegally together.

Among the allegations:

• Kentucky Speedway offered the Bahre family $360 million to purchase their New Hampshire track, which hosts two Cup races annually, and the Bahres asked for more. At the same time, Bahre had offered to sell it to ISC for $310 million. (It was later sold to SMI for $340 million).

• ISC Chief Operating Officer John Saunders said in a deposition that Kentucky Speedway would be hosting a premium stock car race right now if ISC owned it.

ISC disputes that characterization.

“It is not surprising that Kentucky Speedway radically distorts the deposition testimony of John Saunders,” ISC spokesman Wes Harris said. “ISC considered purchasing Kentucky Speedway but decided not to because it was not in our financial interest.

“John Saunders also stated that had ISC purchased Kentucky Speedway it would not necessarily have received a Sprint Cup race.”

• Sanctioning fees increased 828 percent from 1995-2000, 29 percent in 2001 and 16 percent in 2002. The average increase per track was 244.93 percent from 1998-2006. Also, ticket prices increased 94.5 percent during the 1990s. The appeal does not indicate whether that’s all NASCAR sanctioning fees and ticket prices or just Cup sanction fees and ticket prices.

ISC's Harris said in response that it is not remarkable that Sprint Cup tickets rose that much given the explosion in popularity of the sport during that time.

The appeal also reiterated a previous assertion that NASCAR is owned solely by Jim France and niece Lesa France Kennedy and that Brian France, NASCAR’s chairman and chief executive officer, has no ownership in NASCAR. Poston would not comment on the specific ownership structure of NASCAR.

NASCAR and ISC have until June 25 to respond to the appeal. If Kentucky Speedway wins its appeal, the case would then proceed to trial at an undetermined date. If Kentucky Speedway loses its appeal, its final option would be an appeal to the U.S. Supreme Court.

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Comments

1 response to "Kentucky Speedway owners claim NASCAR, ISC work against the track".

1

Chad Manley said:
Apr 29, 2008 at 4:47 AM
Once again, NA$CAR spits on the fans in the Southeast by denying a cup date to the beyond beautiful Kentucky Speedway. But we will have to set through another boring CA race on Labor Day at a track that no longer sells out.