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NASCAR Launches $100M Counter Suit Against AT&T

By Bruce Martin
NSSN Correspondent
BROOKLYN, Mich. — NASCAR officials filed a counterclaim in United States District Court in Atlanta on Sunday against AT&T Mobility/Cingular Wireless and AT&T, Inc. for $100 million, series officials said late Sunday in a release.
Court documents were filed electronically on Sunday by NASCAR alleging breach of contract, fraud and misrepresentation, and conspiracy to aid and abet wrongful interference with Nextel’s exclusive sponsorship agreement.
NASCAR is seeking a minimum of $100 million in damages.
AT&T was granted a preliminary injunction against NASCAR that allowed Richard Childress Racing to switch the logos from Cingular Wireless to AT&T on Jeff Burton’s No. 31 Chevrolet.
NASCAR refused to allow the switch in logos because of its series sponsorship agreement with Nextel, which began in 2004.
Cingular and Alltel were grandfathered into the sport when Nextel entered, but NASCAR said no changes were permitted to their decals and no other wireless companies would be allowed into the sport.
However, AT&T purchased Cingular and claimed it should be allowed to switch logos because it owns the existing sponsorship contract with Childress.
After AT&T filed a lawsuit, U.S. District Judge Marvin Shoob in Atlanta issued a preliminary injunction last month that allowed the Cingular logos to be switched to AT&T. Shoob then barred NASCAR and any other group affiliated with it from interfering with AT&T’s rights as primary sponsor on the car in the Nextel Cup Series.
According to court documents, AT&T “filed its Complaint and a Motion for Preliminary Injunction in furtherance of a scheme of ‘ambush marketing’ to force NASCAR to allow Cingular and its parent company, AT&T Inc. (“AT&T”), to incorporate the marks and logos of AT&T, onto Car No. 31 driven in NASCAR Nextel Cup Series races… On many occasions since 2003, NASCAR expressly denied RCR and Cingular’s requests to change the marks used on Car #31 to that of another telecommunication company, including AT&T and its predecessor entities.  In denying these requests, NASCAR exercised its authority under the NASCAR Rule Book, which gives NASCAR the exclusive right to approve or deny paint schemes and designs on cars racing in its events.”
According to the NASCAR release, “the NASCAR Rule Book governs participation in the NASCAR Nextel Cup Series, and its contents are agreed to in writing by all NASCAR members and participants. Cingular is a member of NASCAR and agreed to abide by all NASCAR rules and regulations when its representatives signed official documents such as the NASCAR Membership and License Application.”
According to NASCAR’s suit, AT&T, Cingular and its representatives breached “explicit agreements with NASCAR when they re-branded the No. 31 car; entered into contract with RCR knowing that they would litigate against NASCAR; and when they sought to ambush Nextel’s exclusive sponsorship rights.”
According to NASCAR’s suit, AT&T, Cingular and its representatives breached “explicit agreements with NASCAR when they re-branded the No. 31 car; entered into contract with RCR knowing that they would litigate against NASCAR; and when they sought to ambush Nextel’s exclusive sponsorship rights.”
Nextel and NASCAR entered into a sponsorship agreement on June 17, 2003, replacing longtime series sponsors R.J. Reynolds and the Winston Cup. Nextel became the exclusive sponsor beginning with the 2004 season.
Nextel agreed to a 10-year sponsorship at a publicly reported price of $700 million.
NASCAR’s lawsuit claims “Tortious Interference” of that contract.
NASCAR officials declined comment on the pending litigation. Team owner Richard Childress had already left Michigan Int’l Speedway when NASCAR issued its statement and could not be reached for comment.