Stock Car Feud A lawsuit over where the races are run threatens the France family's dynastic grip on NASCAR

March 17, 2003
March 17, 2003

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March 17, 2003

Inside Soccer

Stock Car Feud A lawsuit over where the races are run threatens the France family's dynastic grip on NASCAR

Forget Tony Stewart versus Jeff Gordon. The really serious
paint-swappin' and jaw-to-jawin' in NASCAR this year may not be
on the tracks but in court. NASCAR's ruling France family and
shareholders of Bruton Smith's Speedway Motorsports Inc. (SMI)
have squared off in a dispute whose huge stakes are reflected by
the two sides' star lawyers. In the shareholders' corner: Johnnie
Cochran, leader of O.J. Simpson's Dream Team defense. In the
Frances' corner: David Boies, who won the government's antitrust
case against Microsoft.

This is an article from the March 17, 2003 issue

Yes, the man who proved Bill Gates was a monopolist must now
prove Bill France Jr. is not. A lawsuit filed in federal court in
Texas charges that stock car racing's reigning family has
violated the Sherman Anti-Trust Act through its dual control of
NASCAR, the sport's sanctioning body, and International Speedway
Corp. (ISC), the biggest racetrack operator.

At the heart of the lawsuit is an alleged broken promise. Smith,
the suit claims, built his $250 million Texas Motor Speedway
(TMS) based on an assurance from France and his emissaries that
the Fort Worth track would get two Winston Cup races a year. But
since its 1997 opening, TMS has had only one race per season.
(This year's is the Samsung/Radio Shack 500 on March 30.) Four of
the last five new races awarded by NASCAR have gone to ISC tracks
in Fontana, Calif.; Kansas City; Homestead, Fla.; and Chicago. In
a motion to have the suit dismissed, ISC says that its written
agreements to run at TMS "superseded all previous oral
communications" and that the "alleged" promise is "without a
shred of documentation to support it."

If NASCAR the sport is rooted in moonshine runners, NASCAR the
business is rooted in this perceived conflict of interest: Since
Bill France Sr. founded the circuit in 1947, his family has both
governed the sport and owned some of its most venerable--and
profitable--tracks. NASCAR folk long accepted the setup, feeling
they needed a single, deep-pocketed leader like Big Bill to guide
the sport out of its homegrown roots and provide the capital to
keep it going.

But the megagrowth in NASCAR racing over the past decade--total
revenues on the circuit last year approached $2 billion--has
raised the stakes. Both the Frances' ISC and Smith's SMI went on
track-building binges in the '90s, as Winston Cup expanded from
its base in the Southeast. Aided by an alliance with open-wheel
mogul Roger Penske, the Frances now have twice as many tracks
(12) as Smith (six). But the Frances' dual role has also raised
questions about whether they can be at once evenhanded regulators
and sharp-elbowed entrepreneurs. "This has become a huge issue,
compared to how it used to be," says Smith. "It's because of the
money now and how large a piece of the pie they take."

The 75-year-old Smith has been butting heads with the Frances
from the day he built Charlotte Motor Speedway in 1960, creating
a marquee track to rival the France-owned Daytona International.
Bill France Sr. died in 1992, so Smith does battle these days
with Bill Jr., who has fought cancer, ceded his CEO post and
turned 69 but still calls the shots as NASCAR's chairman. He's
had the racing organization's lawyers return vigorous fire, but
they failed in their mission to get the case dismissed. In
October a federal judge denied that motion, and a trial is
scheduled for January 2004.

So now Cochran's firm has begun discovery--looking under NASCAR's
hood, as it were--and the Frances face undesired scrutiny and a
tough decision. They can settle, give TMS that second date and
make the problem go away. Or they can fight on and risk their
whole NASCAR way of business. France did recently talk up a 2004
schedule realignment, allowing track operators to shift races
from one of their facilities to another. Smith could get his
second Fort Worth date if he dropped, say, an Atlanta one. Asked
at a press briefing what he thought of this, Smith replied, "If
I'm sitting up here looking stupid, I apologize. Does that answer
your question?"

In race teams' garages and sponsors' boardrooms, people wonder if
NASCAR faces a new, uncertain day or whether the old bulls can
make peace. Hard to say, because legal theory counts for less
here than history and personality. "Bill and Bruton mutually
admire and respect each other, at some level, and they need each
other," says one NASCAR cognoscente. "But they find such pleasure
in sticking sharp picks in each other's eyes."

COLOR PHOTO: MANUELLO PAGANELLI DEEP IN THE HEART Smith (below) wants France (left) to give himanother race at Texas Motor Speedway.COLOR PHOTO: PETER BAUER/AP [See caption above]COLOR PHOTO: JONATHAN FERREY/GETTY IMAGES [See caption above]