ARTICLE OF THE DAY

Conflict of Interest?
by Josh Spence
7/20/05

A lawsuit was filed recently against NASCAR and the International Speedway Corporation, by the Kentucky Speedway, alleging that the motor sports company violated anti-trust laws by restricting the awarding of NASCAR races.  At first glance, this seems like the latest attempt to jump on the ever-growing NASCAR bandwagon and share in its success.  However, deeper research revealed what could be one of the biggest conflicts of interest in sports history. 

In recent years NASCAR has grown by leaps and bounds, and now stands as the most popular spectator sport in the United States.  No one can question the tremendous job of marketing and advertising that NASCAR has done to put its sport on the map.  What can be questioned is the legality by which the France family operates the sport as a whole.  Bill France, Sr. founded NASCAR in 1948; since then the France family has cultivated NASCAR into what it is today. 

NASCAR oversees and regulates competition on the track in its racing series.  Twelve of the twenty-two tracks that the Nextel Cup competes on are currently owned by the International Speedway Corporation.  The France family owns both of these companies.  Included in the 12 tracks owned by the ISC are some of the most historic in NASCAR. Daytona, Darlington, and Richmond are among those tracks.  Also included however, are several of the so-called “expansion tracks” that have recently begun to host Nextel cup events, such as Homestead-Miami, California, and Kansas.  None of the three hosted a Cup series event before 1997.

Now the Kentucky speedway, which hosts events for NASCAR’s lower-level Busch and Craftsman Truck series, is claiming that the sport’s governing body may be unfairly picking the tracks which host events in the sports premier series, Nextel Cup.  Seems a little fishy doesn’t it?  Jerry Carroll, the leader of a five-man ownership group of Kentucky Speedway, says the speedway’s status as an independent hurts its standing with NASCAR.  Currently only four independently-owned tracks host Nextel Cup races.

The Kentucky speedway wants the court to require NASCAR to award the track a 2006 Cup date and implement a competitive bidding process "to permit full and fair competition for the right to host a Nextel Cup race."  The speedway also asks for $400 million in damages, an amount that could be tripled if the track wins the case.

Last year, a lawsuit was filed by a shareholder in Speedway Motorsports, Inc.  The company controls six of the tracks on which the Nextel Cup series currently competes.  That suit contended NASCAR breached agreements by not awarding a second Cup date to SMI-owned Texas Motor Speedway.  The suit was settled out of court when SMI paid $100.4 million to buy North Carolina Speedway from the ISC, closed the track and put its only remaining Cup race in Texas.

What seems to be a serious conflict of interest may cause a huge change in the way NASCAR is able to conduct business.  The pending lawsuit should be very interesting to follow, as its implications could change the sport forever.  There is no doubt that the product NASCAR puts on the track is a good one, but I think we would all like to see it done fairly.

-Information from the AP was used in this article.