NASCAR gets beat in court again
The Richard Childress Racing No. 31 team will be able to use AT&T logos tonight after a judge denied NASCAR's last-ditch effort to keep the Jeff Burton car from changing paint schemes prior to the Nextel All-Star Challenge at Lowe's Motor Speedway.
U.S. District Court Judge Marvin Shoob, who issued a temporary injunction Friday permitting the change in logos from Cingular to AT&T, denied NASCAR's request Saturday to delay the injunction until it could be heard by the U.S. Court of Appeals next week.
NASCAR has filed for an emergency stay with the 11th Circuit Court of Appeals, but that hearing will not be heard until next week.
AT&T, which merged with Cingular in December 2006, sued NASCAR after the sanctioning body denied the change in logos because of its agreement with Nextel to sponsor the premier series.
Cingular had been grandfathered in when Nextel signed the $700-750 million deal in 2003 under the condition that it could not change to another team. AT&T was not grandfathered in, and NASCAR and Sprint Nextel argued that Cingular was not allowed to change its name.
The judge sided with AT&T on that issue, as well as AT&T's argument that the licensing agreement that teams and NASCAR sign to award car numbers is a binding contract, in his Friday ruling. And with RCR using that as a guide (there is an addendum describing the grandfather clause in the NASCAR-team contract), its agreement with Cingular to sponsor the car also is a binding contract between AT&T and NASCAR.
AT&T says that Cingular spent more than $150 million in more than six years on the sponsorship, including $13-14 million paid annually to RCR.
"In view of the fact that Cingular Wireless LLC has changed its name and adopted the AT&T logo and brand, the court concludes that, insofar as the sponsorship agreement between RCR and [AT&T] gives [AT&T] as a company the right as primary sponsor to designate the marks that appear on the #31 car, that agreement authorizes plaintiff to designate its current name (AT&T) and logo (the AT&T globe) to be featured on the car," the judge wrote.
The judge also did not agree with the argument that NASCAR had told RCR and Cingular in meetings and by letter that it couldn't change names as being part of the contract because it is not in the NSACAR-team licensing agreement.
"If NASCAR had intended to restrict the logos and branding on the #31 car, it could have included such limitations in clear and unambiguous language," the judge wrote, later adding, "Conversations and documents have no meaning – the court need not look to this evidence to determine the parties' intent because the RCR Agreement & Addendum with NASCAR are clear and unambiguous." Scenedaily.com
05/18/07 NASCAR is disappointed with today’s ruling but will continue to provide a sponsor friendly environment for the industry and its partners. NASCAR is currently weighing any and all options for appeal of today’s decision. Meanwhile, NASCAR will continue to protect the industry from actions designed to interrupt a business model which has been beneficial to all. It is important to understand that Sprint Nextel is a cornerstone sponsor that benefits the entire industry by way of its contribution to the championship point’s fund, technology bringing fans closer to the sport, and its massive marketing and advertising campaigns. NASCAR PR
05/18/07 NASCAR has requested and has been granted a hearing by Judge Marvin H. Shoob to stay today’s decision. The hearing will be held at 11:30am/et tomorrow morning, May 19, 2007. If the judge grants the stay, then the #31 car will remain with its current branding. If NASCAR’s request is denied, then NASCAR will seek an emergency stay from the 11th Circuit Court of Appeals on Monday morning. Today’s ruling is limited to the facts of this particular case and does not have broad implications. NASCAR will continue to provide a sponsor friendly environment for the industry and its partners and will protect the industry from actions designed to interrupt a business model which has been beneficial to all. It is important to understand that Sprint Nextel is a cornerstone sponsor that benefits the entire industry by way of its contribution to the championship point’s fund, technology bringing fans closer to the sport, and its massive marketing and advertising campaigns. NASCAR PR
05/18/07 AT&T has won its injunction against NASCAR to put the company's logos on the No. 31 Richard Childress Racing car, a federal court judge ruled Friday.
The decision by U.S. District Court Judge Marvin Shoob orders that NASCAR is prohibited from "interfering with the [AT&T's] contractual right as primary sponsor of the #31 car, to introduce and feature the 'AT&T' logo and brand in the paint scheme of the #31 car in connection with the #31 car's participation in NASCAR's Cup Series races."
AT&T had sought the injunction against NASCAR, which was prohibiting RCR from changing the logos on the No. 31 car from Cingular to AT&T because of its series sponsorship contract with Nextel.
Cingular and AT&T merged in December 2006. NASCAR had argued that Cingular had been grandfathered in but was not allowed to switch its name to AT&T.
We suspect we have not heard the last of this from Nextel, who will be furious by this decision.