Monday, August 13, 2007

NASCAR Wins Appeal Vs. AT&T; Race Teams Suffer

I was going to talk about the fantastic race at Watkins Glen today, but I saw this and it made my blood boil:

Appeals court sides with NASCAR in Burton car dispute
By HARRY R. WEBER, AP Business Writer

August 13, 2007

ATLANTA (AP) -- A ruling by a federal appeals court cleared the way for NASCAR to prevent AT&T Inc. from featuring its logo on Jeff Burton's No. 31 Richard Childress Racing Chevrolet.

The 11th U.S. Circuit Court of Appeals said Monday in its order that San Antonio-based AT&T lacks standing to challenge NASCAR's decision.

The court, therefore, threw out a lower court's ruling that prevented NASCAR from stopping AT&T's plans. The appeals court remanded the case to the U.S. District Court in Atlanta for dismissal.

At issue is AT&T's desire to change the Cingular logo on Burton's car to the AT&T logo. AT&T bought Atlanta-based BellSouth Corp. last year, gaining full control of Cingular and has since rebranded the cell phone provider under the AT&T name.

NASCAR has tried to prevent the Cingular logo from being changed to the AT&T logo on Burton's car because AT&T rival Sprint Nextel Corp. sponsors NASCAR's premier series, the Nextel Cup, and has exclusive rights as the telecommunications company for the series.

Attorneys for NASCAR and Sprint Nextel have argued the only exceptions are companies, including Cingular, that already sponsored cars when Nextel reached its agreement with NASCAR.

``Because Cingular (now AT&T Mobility) was neither a party to nor an intended beneficiary of the (grandfather clause), it has not itself suffered a legally cognizable injury as a result of NASCAR's interpretation,'' the three-judge panel wrote in its unanimous decision to overturn the May 18 decision of U.S. District Court Judge Marvin Shoob.

Cingular's parent has argued that its rights included changing its brand name to AT&T.

In May, Shoob issued a preliminary injunction barring NASCAR and any entity affiliated with it from interfering with AT&T's rights as primary sponsor of the Burton car in NASCAR Cup Series races.

In his ruling regarding Burton's car, Shoob said, ``The court concludes that the continued appearance of the Cingular brand on the No. 31 car, unaccompanied by any indication that Cingular now does business as AT&T, is likely to confuse NASCAR fans.''

Shoob also concluded that AT&T has shown it will suffer irreparable harm in the form of loss of goodwill and loss of exclusive rights to renew its sponsorship agreement unless the court issues the injunction.

But the federal appeals court lifted the injunction Monday, saying in part that under Georgia law AT&T was not a third-party beneficiary of an agreement between NASCAR and Richard Childress racing and, as a result, it lacks standing to challenge NASCAR's interpretation of that agreement.

The case, which includes a $100 million countersuit by NASCAR against AT&T, is still scheduled to go to trial.

What a sham. What a complete sham from the 11th Circuit Court of Appeals. I'm hoping AT&T can appeal this ruling and get this entire situation rectified. What does it say about an organization like NASCAR when they're shutting sponsors out of the sport? Everyone wants to talk about how difficult it is to get sponsors, and on top of getting a company to commit millions of dollars to a race team, now NASCAR wants to shut out entire fields of potential sponsors at a time when the money in racing is as important as ever? Shame on the 11th Circuit, shame on NASCAR, shame on Sprint/Nextel, and shame on Sunoco. Unbelievable.


Nascar and the Canadian Curmudgeon said...

I have to jump on the otherside of the fence.....All involved new what the conditions were and about the grandfather clause which was no different then when Winston was involved and the clause negeted any other cigarette brand which is why Marlboro went to other racing series....If At&T had won it would have opened the door for Nextel-Sprint to opt out of their contract and the series wouldnpot have a title sponsor so no point fund money..This also inhibited anyone else from taking over as a title sponsor..why put up the money if you don't get exclusivity

thecatfishshow said...

Joe Camel sponsored the #23 for several years in the Cup Series for Jimmy Spencer, then it switched to Winston. Skoal sponsored the #33 for Harry Gant and Ken Schrader for a long time, and they even sponsored the #1 for Rick Mast. Anheiser Busch doesn't have any exclusivity deal for being the official pole award sponsor that I know of, otherwise they wouldn't allow Miller Lite, Coors Light, etc. to sponsor cars every week. I see this like a states' rights issue, if teams can't get a sponsor and close down because of this (which nearly happened to the #99 back in 2004) the repercussions of this decision will be huge. To me, the company Cingular was grandfathered in and any name change as a result of a change in ownership has to be accepted because that company is still sponsoring the car.