AT&T lawsuit could take power from NASCAR

On Thursday in an Atlanta courtroom, a federal judge will begin the process of sifting through documents that will ultimately determine whether AT&T has a valid argument in its lawsuit against NASCAR over exclusivity rights for the sanctioning body's entitlement sponsor.

But what's at stake is more than logos and paint schemes. What currently exists as a "gray area" in NASCAR's driver-owner agreement would suddenly become black and white -- and NASCAR officials say could negatively affect every team in the garage, no matter which side wins.

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"There are three categories that are essential to the industry," said Ramsey Poston, NASCAR's managing director of corporate communications. "One is the title sponsorship: Nextel, Busch, and Craftsman. The other is the tire manufacturer and the other is the fuel supplier.

"If those categories are damaged, then there could be a ripple effect that ultimately hurts the drivers and teams. We think it's very important to protect those three categories that benefit everybody in the sport. That's why everyone in this garage ought to be rallying around NASCAR's position and fighting to maintain the status quo because it benefits everybody."

Unlike most sports leagues, NASCAR does not operate under a franchise system. Instead, teams are independently owned, having to negotiate their own sponsorship agreements. Those sometimes come in conflict with NASCAR's own sponsorship deals, as in the case of Sprint/Nextel and AT&T.

When Nextel signed on as entitlement sponsor of NASCAR's premier series in 2003, Cingular and Alltel were given exemptions. That's the crux of the argument set forth by AT&T.

"There is nothing in our contract that prevents us from changing the Cingular brand name to our new brand, AT&T, on the No. 31 car," said John Burbank, AT&T's vice president of marketing. "Cingular's grandfather clause, which was provided to us by NASCAR before we signed our agreement with Richard Childress Racing, states we can continue as a sponsor as long as we do not increase our brand position on the vehicle we sponsor and do not move to a different race team. What could be clearer?"

So what are the long-term implications? If AT&T wins, Nextel loses much of its exclusivity as an entitlement sponsor. NASCAR and Nextel have never made specifics of their 10-year agreement public, but industry insiders say the contract -- estimated at between $70 and $75 million annually -- may actually be a five-year deal with an option to renew. (Continued)