[Texas] Settlement Costs SMI: Speedway Motorsports Inc. today reported an 11% increase in third-quarter revenue to $71 million but a net loss of $4.5 million, or 10 cents per diluted share. The loss compares with earnings of $1.9 million, or 4 cents per diluted share, in the same period last year. SMI said the results include an after-tax charge of $7.2 million, or 16 cents per share, related to a legal settlement with NASCAR and International Speedway Corp. over a shareholder suit. Without the charge SMI earned $2.7 million, or 6 cents per diluted share, up from $1.85 million, or 4 cents per share, in last year's quarter. The Charlotte Business Journal reports that analysts had, on average, expected the company to earn 5 cents per share. SMI operates tracks in Bristol, Tenn., Atlanta, Charlotte, Fort Worth, Texas, Las Vegas and Sonoma, Calif.(NASCAR Scene)(11-3-2004)
Texas Lawsuit Approved: The U.S. District Court for eastern Texas has approved the settlement agreement between International Speedway Corp. and shareholders of Speedway Motorsports, clearing the way for the sale of North Carolina Speedway in Rockingham. The agreement was announced in May, but was pending the final approval from the court before it could be officially finalized. The agreement settles a suit filed in February 2002 by SMI shareholder Francis Ferko and later joined by Rusty Vaughan. In May, NASCAR announced it would give a second Nextel Cup date to Texas Motor Speedway in 2005 after ISC sold the Rockingham track to SMI for $100.4 million.(ThatsRacin.com)(7-2-2004)
Martinsville bought by ISC, Rockingham sold to SMI by ISC: International Speedway Corporation [ISC] announced the following: The Company will acquire the assets of Martinsville Speedway, which hosts two NASCAR NEXTEL Cup Series events annually, for $192 million. The acquisition will be funded by $100.4 million in proceeds from the sale of the assets of North Carolina Speedway, which currently hosts one NASCAR NEXTEL Cup event annually, and $91.6 million in cash. Speedway Motorsports, Inc. [SMI] will purchase North Carolina for $100.4 million, as per the terms of a settlement agreement in the Ferko/Vaughn litigation filed with the United States District Court for the Eastern District of Texas, Sherman Division. The Settlement Agreement releases ISC and NASCAR from all claims related to the litigation. The released claims include, but are not limited to, allegations or assertions with respect to the awarding and/or sanctioning of races, the effect of the common control of NASCAR and ISC residing in the France Family Group, and the market power either individually or jointly of NASCAR and ISC. Separately, the Company received NASCAR's approval for the realignment of several NASCAR NEXTEL Cup races within its portfolio beginning in 2005. The net result is the addition of a second Cup event for Phoenix International Raceway and the reduction of Darlington Raceway's event schedule by one Cup date. ISC also intends for Nazareth Speedway's NASCAR Busch and IRL IndyCar events to be realigned to other facilities within its portfolio and will cease major motorsport event operations at the facility after completion of the track's 2004 events. Martinsville Acquisition and Ferko/Vaughn Settlement The acquisition of Martinsville and the sale of North Carolina will happen in a series of transactions that will essentially occur simultaneously. Martinsville is privately owned, and the France family, which controls in excess of 60% of the combined voting interest of ISC, indirectly owns 50% of Martinsville. The addition of an incremental NASCAR NEXTEL Cup date resulting from the Transactions was integral to the Company's decision to settle the Ferko/Vaughn litigation through the sale of North Carolina. Under the terms of the Settlement Agreement, SMI will purchase North Carolina for $100.4 million in cash. The sale of North Carolina is expected to close following the satisfaction of conditions as provided in the North Carolina Asset Purchase Agreement and the Settlement Agreement. The Settlement Agreement is subject to Court approval, which the Company anticipates receiving within the next 30 to 45 days. The purchase prices for the assets of both facilities are subject to certain non-material adjustments and prorations at closing, and both are expected to close within the next 30 to 45 days in ISC's third quarter. ISC expects to record an approximate $36 million after-tax gain, or $0.68 per diluted share, from the sale of North Carolina and will reflect the facility's operations as discontinued in the Company's financial statements in accordance with generally accepted accounting principles Significant Realignment Initiatives Announced for 2005 NASCAR has approved ISC's proposal for the realignment of several NEXTEL Cup dates, including races at Phoenix, Darlington and California Speedway. Commented John R. Saunders, Executive Vice President and Chief Operating Officer of ISC. "In addition, race fans in the Southwest will have another opportunity to experience the excitement of live NASCAR NEXTEL Cup racing. We will install lighting at Phoenix in order for the facility's 2005 spring race to finish under the lights during east coast prime time, typically a time of day with larger television audiences. Also, by realigning Nazareth's Busch and IRL events to other facilities in our portfolio, we believe we can successfully grow these events over the long term at a quicker rate than in their current venue. As such, we are presently working with the various sanctioning bodies involved." ISC will record a non-cash pre-tax charge of approximately $13 million, or $0.14 per diluted share, to reflect the impairment of Nazareth's long-lived assets.(ISC PR)(5-14-2004)
NASCAR mum about Texas settlement: The legal turtle, known in NASCAR circles as the Ferko lawsuit, pulled its head into its shell Thursday. Francis Ferko, an SMI stockholder, started his suit against NASCAR two years ago, arguing the sanctioning body broke a promise to give the Texas racetrack a second date. NASCAR officials refused to talk about anything to do with Ferko and Texas. NASCAR, wholly owned by Bill France and his family, replied to all Ferko inquiries with a generic statement from general counsel Gary Crotty. "NASCAR will continue to respect the court's request not to publicly comment on this pending litigation," Crotty said.(Daytona Beach News Journal)(4-23-2004)
TMS getting 2nd race in 2005: Texas Motor Speedway will have its long-awaited second NASCAR Nextel Cup Series race in 2005. The Fort Worth racetrack will be granted two races per season as part of a settlement of Francis Ferko's lawsuit against NASCAR, sources told the Star-Telegram on Tuesday. Ferko, of Plano, filed the suit in February 2002 on behalf of shareholders of Speedway Motorsports, the company that built and operates TMS. An announcement could be made next month, though sources said the settlement probably won't be declared final until the summer. NASCAR usually unveils its schedule in August or September. TMS President Eddie Gossage declined to comment. Calls to NASCAR and its attorney, Alan B. Vickery, weren't returned. Ferko attorney Samuel A. Cherry Jr. said last month that settlement negotiations were under way. The second date, which sources said will probably be in early November during the 10-race "Chase for the Championship," is the key piece of an agreement that keeps the Cup schedule at 36 races and involves four other facilities: Phoenix International Raceway, Atlanta Motor Speedway, Darlington Raceway and North Carolina Speedway.
• Darlington, owned by lawsuit co-defendant International Speedway Corp., loses one of its two dates and will hold its race the day before Mother's Day, traditionally an open weekend for the Cup Series.
• North Carolina, an ISC track that was pared to one race this season, will lose its remaining February date.
• Phoenix, another ISC racetrack, will also have two Cup dates -- in February (North Carolina's race) and November (Darlington's second date). Phoenix and TMS will be two of 14 facilities with two races in 2005.
• Atlanta, a sister track of TMS in Bruton Smith's Speedway Motorsports empire, will keep its two dates, but the spring race will be pushed later into March in an attempt to ease weather concerns.
NASCAR and ISC are owned by the France family of Daytona Beach, Fla., and are accused by Ferko of violating federal antitrust laws. Ferko also claims that NASCAR breached "express" and "implied" contracts with the "promise" of a second date for TMS.
"We've heard our name mentioned in relation with a second Nextel Cup race for almost two years now, yet we have not heard anything official from anyone," Phoenix raceway President Bryan Sperber said Tuesday. "If it did happen, we would be ecstatic and would certainly do our best to represent NASCAR as best we could."
Darlington, in rural South Carolina, and North Carolina Speedway, in the small town of Rockingham, surfaced in reports last month as speedways that could be affected by the lawsuit. Their small markets and relatively limited seating capacities (combined 120,113) ultimately cost the two traditional NASCAR tracks.
"What we're going through now is not a great deal different than what the NFL, the NBA and certainly the NHL went through: the nationalization of the sport," said H.A. "Humpy" Wheeler, president and general manager of Lowe's Motor Speedway, and president and chief operating officer of Speedway Motorsports. "There are forces at work outside of racing -- sponsors or TV -- that want those bigger numbers, and you can't get bigger numbers without bigger markets. It's going to be very difficult economically if you don't have 100,000 seats. You might be able to get along for a while, but with the way purses have escalated, you're going to have to have those seats."
TMS has them. Track officials estimated that more than 200,000 fans attended the April 4 Cup race, the Samsung/RadioShack 500, which drew a 5.6 rating and a 13 share for Fox Sports. Those numbers are an attractive fit for the Chase for the Championship, the sprint for the Nextel Cup title over the final 10 races of the season. ISC racetracks will host the final three races this season (Phoenix, Nov. 7; Darlington, Nov. 14; Homestead-Miami Speedway, Nov. 21). Atlanta, on Oct. 31, is the only Speedway Motorsports track in the final five. Next season, Phoenix and Miami will host the final two, preceded by Atlanta and Texas.
"I think a place like this ought to have two races for sure," Cup driver Rusty Wallace said last month during a test session at TMS. "There are some tracks that have got two races that sure can afford to go back to one. When you come to a place like this, it's exciting because they fill the grandstands up. It's great." Tracking the lawsuit
Five racetracks stand to be affected by the settlement of the Francis Ferko lawsuit against NASCAR.
• Texas Motor Speedway: Gets second Nextel Cup date, probably in early November.
• Phoenix International Raceway: Gets second date, probably in early February.
• Atlanta Motor Speedway: Keeps two dates, with first moving later into March.
• Darlington Raceway: Loses one of two races; the remaining race moves to Mother's Day weekend.
• North Carolina Speedway: Loses only remaining Cup date.(Fort Worth Star Telegram - need to register or see story at ThatsRacin.com)(4-21-2004)
Darlington AND Rockingham to lose races? Alternating ONE racedate? Texas and Vegas get the dates? Settlement negotiations in a lawsuit over a second Nextel Cup date for Texas Motor Speedway have potentially major ramifications for two tracks in the Carolinas, The Observer has learned.
A source close to talks in a suit against NASCAR by two Speedway Motorsports Inc. [SMI] shareholders said Monday a settlement could result in International Speedway Corp. selling both North Carolina Speedway in Rockingham and Darlington Raceway to SMI. If such a deal were made, two of three remaining Cup dates from Rockingham and Darlington would move – one to Texas Motor Speedway and the other to Las Vegas Motor Speedway, giving those SMI-owned tracks two dates each per season. The other date would alternate between Rockingham and Darlington, with the Nextel Cup, Busch and Truck series racing at Rockingham one year then at Darlington the next [so much for lights and SAFER]. "I am aware of the (settlement) talks," SMI chairman Bruton Smith said Monday. "I think that they have been going on for about two months, and they're further down the road than they ever have been. But there will have to be a written agreement among all of the attorneys before there's any done deal." Smith said that in his mind any settlement of the suit would have to include a second Cup date for Texas. "That's certainly the key to it, that's why it was filed," he said.(more at ThatsRacin.com)(3-23-2004)
and more on the TMS/NASCAR lawsuit: Key individuals involved in the lawsuit over a second Nextel Cup race for Texas Motor Speedway say the sides are close to reaching an out-of-court settlement. No one would give details of the possible settlement because of a stipulation to keep the negotiations private, but any agreement is likely to include a second annual Cup race for TMS, starting with the 2005 season.(Dallas Morning News)(3-21-2004)
Texas Lawsuit to be Settled Soon? Officials from Texas Motor Speedway and from NASCAR indicate that a settlement of the so-called Ferko suit could come sooner rather than later. The suit, in U.S. District Court in Sherman, Texas, was brought by a shareholder in Speedway Motorsports and contends that NASCAR promised a race date to the Texas track which was not delivered. NASCAR has denied making such a promise. As is usual in such proceedings, the sides are given time to attempt to reach agreement before the case goes to trial. The trial in the case was due to begin sometime in early summer. Attorneys and officials from both sides have been negotiating a possible agreement in the matter. No timetable was indicated, nor was any idea given of what might be negotiable. "The process is in place," NASCAR vp/communications Jim Hunter said Friday. "There are some things on the table, and we'd all like to get this behind us. We have other things to do." There is much speculation as to what might be in play in the settlement talks. Many believe NASCAR could conclude the matter by creating or transferring a date or dates to Texas and/or Las Vegas. Both tracks have proved to be popular and profitable venues for the sanction.(Speed Channel)(3-20-2004)
Texas Lawsuit News: More negotiations between NASCAR and the Texas plaintiffs over that second Cup date at Bruton Smith's Fort Worth track are reported to be under way this week. The Texas judge presiding in the Ferko-vs.-NASCAR case pushing for an out-of-court settlement, sources familiar with the situation say. There were to be talks between the two sides at Daytona, but it is unclear if those talks took place. NASCAR's Brian France, who is believed to be amenable to settling the case, took a hard-line stance during a Daytona news conference. One possible way to settle the issue - for International Speedway Corp. to sell North Carolina Speedway in Rockingham to Smith's Speedway Motorsports group, which could then move that Cup date to one of SMI's six tracks. Curiously, the hottest speculation is that if that happens, Smith would take that Cup date to Las Vegas. Rockingham's fate has been a sizzling topic, and insiders say that Darlington's decision to spend $1 million on "soft walls" for the March 21 race came only two days after the Rockingham race. And Rockingham didn't put up soft walls.(Winston Salem Journal)(2-29-2004)
2nd Texas Date Close? NASCAR's Brian France appears closer to granting a second Cup date to Bruton Smith's Texas track, according to sources. But the anti-trust part of the lawsuit against NASCAR may be a major stumbling block in any settlement. And the high-dollar attorneys involved on both sides may have backed both NASCAR and the man who launched the suit, stockholder Francis Ferko, into a corner where any settlement may not be as easy as simply giving Texas that second race weekend. Attorneys' fees have become a major issue, particularly for NASCAR. According to one unconfirmed source, NASCAR may spend well over $100 million defending itself. It is unclear if the Ferko side is working for payment contingency on a settlement. Two months ago it appeared a settlement was beginning to take form, possibly in the shape of a sale of North Carolina Speedway at Rockingham by the France family to Smith's Speedway Motorsports, with the understanding that Cup date could be moved to the Fort Worth track in 2005. Now it appears all those attorneys may not be willing to fade quietly into the night.(Winston Salem Journal)(2-13-2004)
France confident about Texas lawsuit: NASCAR chairman Brian France said Wednesday he is confident of NASCAR’s position in the lawsuit over the dispute of a second annual Nextel Cup date at Texas Motor Speedway. He also said he looks forward to trying the case in court. “It’s moving through the court system, and my preference is to try it in the courtroom,’’ France said. “I won’t say I’m anxious to do that, but a lot of the facts have come in through the discovery process. Witnesses have weighed in. I think we should try the case and get it over with.’’ Plano resident Francis Ferko and Highland Village resident Randy Vaughn are plaintiffs in the lawsuit that claims NASCAR officials failed to follow through with a promise to give TMS a second Cup date. Ferko and Vaughan are shareholders in Speedway Motorsports Inc., the parent company of TMS. The lawsuit is scheduled for pre-trial hearing in July at the U.S. Federal District Court in Sherman, Texas The suit claims anti-trust violations between NASCAR’s relationship with International Speedway Corp., which owns 12 facilities where Cup races are held. France disputed those claims Wednesday while talking to reporters at Daytona International Speedway.
“When you look the whole idea or an anti-competitive environment, it isn’t reality,’’ France said. “Speedway Motorsports have benefited immensely over the years from its involvement with NASCAR.’’ France, who replaced his father, Bill France Jr., as the NASCAR chairman last year, was asked if it's possible a settlement could be reached before a trial date this summer. “You never say never,’’ he said. “The court orders that settlements talks take place. But my preference is we go try this at the appropriate time.’’ Bruton Smith, chairman of SMI, said he agrees with France on one count. “First, this is not my lawsuit,’’ Smith said. “But I think it would be better for everyone involved it this went to trial so all the facts could come out. As for Brian’s comments, I think he may have been told to say certain things by some of his attorneys.’’ Sam Cherry, lead attorney for Ferko and Vaughn, learned about France’s comments while on a business trip in Los Angeles. “As always, we filed this suit to try it in court,’’ Cherry said. “We look forward to a Texas jury evaluating the merits of our claim on the common-law counts and the anti-trust issues. Then we’ll let the chips fall where they may.’’(Dallas Morning News)(2-11-2004)
Texas Lawsuit News: Bruton Smith said yesterday that the Texas judge handling the Ferko antitrust suit against NASCAR over lack of a second Nextel Cup date at Smith's Fort Worth track may be pushing the two sides toward arbitration. Texas officials are holding out some hope they might even get a favorable settlement in time to put a second race on the tour schedule this season. The case was to begin this month but has been delayed until May. At least 80 people have been deposed, although the depositions have not yet been made public. Smith said he thinks that Brian France wants to settle the long-simmering Texas issue, but that his father, Bill France Jr., doesn't.(Winston Salem Journal)(1-21-2004)
TMS Lawsuit News: Facing immense volumes of documents and a crush of depositions, attorneys for Francis Ferko and NASCAR have abandoned a January trial date for the lawsuit that seeks a second annual Nextel Cup race at Texas Motor Speedway. Samuel A. Cherry Jr., the attorney for Ferko and co-plaintiff Russell Vaughn, said Tuesday that both sides are attempting to agree on a consolidated scheduling order. The only hang-up is a new trial date. Cherry is pushing for a May date in U.S. District Court in Sherman, but NASCAR's legal team is pushing for September . He estimated that more than 200,000 pages of documents have been submitted and between 50 and 70 depositions taken for the derivative action claim. Expert depositions must be completed by next week, he said, and the deadline for the first round of depositions was in early September. Cherry said an August push saw three depositions taken in three different cities in one day. Ferko, a Plano resident and shareholder in TMS parent company Speedway Motorsports Inc., filed the lawsuit in February 2002, claiming NASCAR breached implied and express contracts by not granting a "promised" second Cup date to TMS. Vaughn, who lives in Highland Village and is the president of Speedway Children's Charities Texas Chapter, was added to the suit in June.(Fort Worth Star Telegram)(10-29-2003)
Lawsuit Date Change? Attorneys involved in the Francis Ferko lawsuit against NASCAR say it's unlikely the case will make it to trial by the scheduled date of January. Depositions from industry experts have just begun. It's probable that a trial date will be rescheduled for later in the year, possibly in May. Ferko, a Plano resident and a Speedway Motorsports Inc. shareholder, is suing NASCAR over failure to follow through with an alleged promise of a second Winston Cup date for TMS.(Dallas Morning News)(10-17-2003)
Lawsuit to cost NASCAR $1 Billion? SMI's Bruton Smith and NASCAR's Bill France are on opposite sides of the biggest and most compelling lawsuit in the 55-year history of NASCAR. As most NASCAR fans have heard, the case of Ferko vs. NASCAR is about Texas Motor Speedway [TMS] not getting a second annual Winston Cup race. Plano resident Francis Ferko is a minority shareholder in Speedway Motorsports Inc. Smith is chairman of SMI, a $1.9 billion operation and the parent company of TMS. The lawsuit accuses NASCAR officials of failing to deliver on a promise to award TMS a second Winston Cup race. It sounds simple. It isn't. This is major litigation that could rock NASCAR to its foundation. Big-money lawyers are preparing to argue the merits of the case. The suit is scheduled for trial in January 2004 in U.S. District Court in Sherman. Bill France gave his deposition in Daytona Beach three weeks ago. Smith was deposed in June.
Some of the most prominent attorneys and most prestigious law firms in the country are involved. The TMS side includes Johnnie Cochran, who became famous as the attorney for O.J. Simpson. He has estimated financial damages at upwards of $1 billion, although other attorneys involved say $200 million is more realistic. NASCAR has the firm headed by David Boies, the man who argued for Al Gore in the litigation over the Florida voting process in the 2000 presidential election.(See full story at the Dallas Morning Star)(9-4-2003)
Texas Lawsuit: NASCAR chairman Bill France Jr. is expected to give a deposition Tuesday in the lawsuit over a second Winston Cup date for Texas Motor Speedway. Plano, TX resident Francis Ferko and Highland Village resident Rusty Vaughn are shareholders of Speedway Motorsports Inc., the parent company of TMS. Ferko and Vaughn are suing NASCAR over failing to deliver on an alleged promise to provide a second annual Winston Cup race at TMS. The suit also alleges federal anti-trust violations in NASCAR's relationship with International Speedway Corp., which owns 12 facilities where Winston Cup events are held. The France family owns NASCAR and has a controlling interest in ISC. France will be deposed in Daytona Beach, Fla., where NASCAR is headquartered, by attorneys for Ferko and Vaughn.(Dallas Morning News)(8-16-2003)
Second stockholder joins fray in Lawsuit: Another Texas resident has joined the legal battle that seeks a second NASCAR Winston Cup race for Texas Motor Speedway, and he knows the Fort Worth racetrack well. Highland Village resident Russell "Rusty" Vaughn was added to the second-date lawsuit, which was filed by Plano resident Francis Ferko in February 2002, in a second amended complaint filed late Wednesday in U.S. District Court in Sherman. Vaughn, like Ferko, owns stock in Speedway Motorsports Inc., the company that built and operates TMS. But unlike Ferko, Vaughn is visible at TMS, serving as the president of Speedway Children's Charities Texas Chapter. Messages left for Vaughn went unreturned, but Samuel A. Cherry Jr., the Alabama-based attorney heading the derivative action suit, said Vaughn is a longtime NASCAR fan and "is vitally interested in providing whatever assistance he can in seeking the second race." Cherry said the addition of Vaughn will not delay the lawsuit, which is tentatively scheduled for trial in January. For the first time, the amended complaint reveals that Ferko has been an SMI shareholder since only 2001. Vaughn, however, has owned SMI stock since 1997, the year TMS debuted on the Winston Cup schedule.(Fort Worth Star Telegram)(6-12-2003)
Expensive Lawsuit: ISC officials said that spending on the lawsuit initiated by Speedway Motorsports Inc. stockholder Francis Ferko against ISC would cost $1 million more than anticipated because of costs in the discovery phase.(Roanoke Times)(4-12-2003)
Judge denies two requests by NASCAR in TMS lawsuit: Francis Ferko, the Plano [TX] resident who is suing NASCAR, received favorable news Tuesday in orders issued by Judge Richard Schell in the U.S. District Court in Sherman. Judge Schell denied NASCAR's request to realign plaintiffs in the lawsuit. He also granted a motion by Speedway Motorsports Inc. to dismiss NASCAR's request to have some disputes of the case handled in a separate judgment. Ferko, a shareholder of SMI, is suing NASCAR over failing to deliver on alleged promise to award Texas Motor Speedway a second Winston Cup date and over possible federal antitrust violations in the relationship between NASCAR and International Speedway Corp. TMS is one of seven tracks owned by SMI. NASCAR's attorneys filed a motion in December asking the plaintiff in the case be realigned from Ferko to SMI and Bruton Smith, the chairman of SMI. When SMI's attorneys filed documents stating SMI agreed with Ferko's claims, NASCAR's attorneys asked that SMI and Smith be listed as the actual plaintiff. Judge Schell denied that motion. He also granted SMI's cross-claim to dismiss NASCAR's request for a declaratory judgment. Sam Cherry, lead attorney for Ferko, said five attorneys representing three law firms handling the lawsuit attended the Samsung/RadioShack 500 at TMS on March 30. Cherry also said two of their "experts" – an economist and an antitrust specialist – attended.(Dallas Morning News - may need to register to read/view) AND The lawsuit that could bring Texas Motor Speedway another Winston Cup race has cleared two more roadblocks and shouldn't face another until NASCAR asks for a summary judgment later this year. U.S. District Judge Richard A. Schell handed down his rulings late last week. NASCAR's motion to dismiss Francis Ferko as plaintiff and replace him with Speedway Motorsports Inc. was denied, and a motion by SMI attorneys to dismiss a cross-claim for a declaratory judgment was granted. "The efforts of NASCAR by these two motions did not succeed, so we're on with the lawsuit now full-fledged," said Jim E. Cowles, a Dallas-based attorney for SMI. "The efforts of NASCAR to try to end this with two very shrewd legal moves just weren't successful."(Fort Worth Star Telegram)(4-9-2003)
The 2nd Texas Race Date Lawsuit: The NASCAR Nation has vacated Texas Motor Speedway for eastern Alabama, and it won't return to Fort Worth in full force for another 12 months. That fact irks Plano resident Francis Ferko, the Speedway Motorsports Inc. shareholder whose lawsuit against NASCAR for a second Winston Cup race at TMS continues to hold the attention of the sport's governing body and its attorneys -- even though the case hasn't made significant news since before Christmas. "We treat it as a serious matter, obviously, like you would deal with any major litigation, in terms of putting in the resources," said Brian France, NASCAR's senior vice president and grandson to founder Bill France Sr. "It's more time consuming for upper management, which is what all lawsuits do. They're sort of the ultimate nuisance." France, speaking Sunday along with NASCAR chief operating officer George Pyne from one of NASCAR's haulers in the TMS garage area, said the lawsuit -- which alleges that NASCAR has reneged on "implied" and "express" contracts by not giving TMS a promised second Winston Cup race -- is an assault on the way NASCAR does business and is without merit.(full story at Fort Worth Star Telegram)(3-31-2003)
Ferko to make an appearance? Francis Ferko, the mystery man in a potentially historic lawsuit against NASCAR, has never made a public appearance since filing the case a little over a year ago, but the Plano, Texas, businessman could make an appearance here this weekend. Track owner Bruton Smith, who insisted he has never met Ferko and doesn't even know if Ferko has season tickets to Texas Motor Speedway, said it is possible that Ferko could be here and willing to discuss the case. "He's my hero," Smith said. "I haven't met him, but I like him." The suit argues that NASCAR should give Smith a second Winston Cup tour date here, much as the sanctioning body gave its sister company, the International Speedway Corp., tour dates at California Speedway, Chicago-lands Speedway, Kansas Speedway, and Homestead-Miami Speedway. Lawyers for Ferko say they would also ask for a financial award to make up for the missing Cup races.(Winston Salem Journal)(3-29-2003)
NASCAR Feels Confident about TMS Lawsuit: George Pyne, NASCAR's chief operating officer, said NASCAR feels confident of its position as the defendant in the Francis Ferko lawsuit. Ferko, a Plano resident and a shareholder of Speedway Motorsports Inc.[SMI], is suing NASCAR for failing to deliver on an alleged promise of a second Winston Cup date at Texas Motor Speedway. The facility is one of seven tracks owned by SMI. The suit also accuses NASCAR of federal anti-trust violations because of the relationship between NASCAR and International Speedway Corp., a speedway management company. "We feel very good about where we are," Pyne said in regard to the lawsuit. "I think if you look at where the sport is today compared to where it was 10 years ago, you would have to say it is much better off. Tracks are enjoying record profits, including the SMI tracks." Pyne also said he doesn't expect major changes in the 2004 Winston Cup schedule, even though NASCAR chairman Bill France Jr. said earlier that realignment was a top priority. "Historically, we have not seen dramatic changes," Pyne said. "In 1970 we had 60 races and ran on some dirt tracks, but change has come gradually. That why Bill called realignment, '2004 and beyond.' We usually make one or two changes as a test. If it doesn't work, we can change it back. So I don't think next year's schedule will be dramatically different." Pyne said the 2004 schedule probably will be completed in late August or early September. He emphasized that realignment also means moving some races to Saturday night or later in the afternoon on Sundays. He mentioned Las Vegas as a race that might move to a later time slot on Sunday, possibly 4:30pm/et to garner a larger TV audience. Pyne said NASCAR was looking more at the second half of the schedule for changing races to Saturday night.(Dallas Morning News may need to register to view/read)(3-22-2003)
Texas Lawsuit Update: In legal documents filed this week as part of the Francis Ferko lawsuit against NASCAR, Ferko's attorneys list public records which they feel shows NASCAR and International Speedway Corp. have a relationship that violates antitrust laws. Ferko, a Plano resident and shareholder for Speedway Motorsports Inc., is suing NASCAR for failing to follow through with an alleged promise of awarding Texas Motor Speedway a second annual Winston Cup race. TMS is one of six speedways owned by SMI. Ferko also is suing NASCAR over alleged violations of federal antitrust laws in the relationship between NASCAR and ISC, a facility-management company that has ownership in 12 speedways that play host to Winston Cup races. Ferko's attorneys list information from ISC's 2001 Annual Report to the Securities and Exchange Commission: "We are controlled by the France family, and NASCAR, which sanctions most of our major racing events, is controlled by William C. France and James C. France." Bill France Jr. is the chairman of the board of NASCAR. His brother, Jim France, is the chief executive officer of ISC. Lesa France Kennedy, the daughter of Bill France, is the president of ISC. Ferko's attorneys also say the 2001 ISC Annual Report states, "NASCAR is an affiliate of ISC by virtue of William and James France's common control of both entities." The same ISC filing states, "Certain of our senior executives may have potential conflicts of interest," listing the three members of the France family. The discovery process of the lawsuit, which includes deposing potential witnesses, will begin later this month.(full story at the Dallas Morning News - may need to register to view/read)(3-15-2003)
Texas Lawsuit target date to be set UPDATE: The attorneys involved in the Francis Ferko lawsuit against NASCAR will have a scheduling conference with Magistrate Judge Robert Faulkner on Wednesday in U.S. District Court in Sherman. The purpose of the conference is to set a target trial date and a schedule for discovery and depositions. A likely time frame for a trial would be the early part of 2004. Ferko, a Plano resident and Speedway Motorsports Inc. stockholder, is suing NASCAR over its failure to deliver a second annual Winston Cup date to Texas Motor Speedway and for alleged antitrust violations. TMS is one of the racing facilities owned by SMI. Ferko filed the lawsuit last December after SMI's board of directors denied his request to sue NASCAR. U.S. District Judge Richard Shell has not ruled on a motion by NASCAR's attorneys to realign plaintiffs from Ferko to SMI chairman Bruton Smith. That ruling is expected in January. The attorneys for Ferko, NASCAR and SMI met in New York City last week to work out scheduling details.(Dallas Morning News), for past info see my Lawsuit Page.(12-18-2002) UPDATE: Attorneys for Francis Ferko, Speedway Motorsports Inc., NASCAR and International Speedway Corp. converged here Wednesday and left with a tentative trial date in the case that could bring a second Winston Cup race to Texas Motor Speedway. During a scheduling conference, attorneys and U.S. Magistrate Judge Robert Faulkner agreed to a January 2004 date in U.S. Eastern District Court. Depositions won't begin before Jan. 15, 2003. A trial could be averted by a summary judgment, a pretrial ruling the defense requests because it believes the plaintiff has failed to make its case. Two matters are pending before Faulkner and U.S. District Judge Richard Schell: NASCAR's motion to realign plaintiffs and NASCAR's cross-claim that asks for a declaration of law that it has never been obligated to sanction two Cup races at TMS.(Fort Worth Star Telegram)(12-19-2002)
Texas Lawsuit News: A motion to realign the plaintiffs in the second-date lawsuit should be denied because Speedway Motorsports Inc. and Francis Ferko have an "antagonistic" relationship, attorneys for SMI and Ferko said in court documents. On Nov. 4, NASCAR filed a motion to realign SMI as plaintiff and dismiss SMI shareholder Ferko, claiming SMI's and Ferko's interests are the same in the shareholder derivative action that could bring a second NASCAR Winston Cup race to Texas Motor Speedway in Fort Worth. But SMI's response, which will be filed in U.S. District Court in Sherman today and was obtained Tuesday by the Star-Telegram, denies NASCAR's assertions by maintaining that SMI "chose not to take a position on the demand to file" the lawsuit and "is not making any claim against NASCAR." Last December, Plano resident Ferko demanded that SMI's board of directors file a lawsuit against NASCAR, but the board chose to take no action, thus becoming "antagonistic" with Ferko. Ferko's response, filed Monday, argues two points: Ferko should not be dismissed, and if SMI is realigned as plaintiff, he should be a co-plaintiff; and SMI can't be realigned as plaintiff because of its "reluctance to invest sufficient resources" and its business ties to NASCAR.(Fort Worth Star Telegram)(11-27-2002)
More on the Texas/NASCAR lawsuit: NASCAR filed its answer Monday to the lawsuit against it that seeks a second Winston Cup race at Texas Motor Speedway, and as expected, the stock-car body strongly denied the claims made in the suit. NASCAR also filed a cross-claim against Speedway Motorsports Inc., which built and operates Texas Motor Speedway and is a nominal defendant in the derivative action filed by SMI stockholder Francis Ferko. In the cross-claim, NASCAR accuses SMI of "unfounded allegations, as reflected in its answer and assent to all material allegations and claims of Francis Ferko." Monday's filing in U.S. District Court in Sherman comes 12 days after SMI filed its answer to the lawsuit that confirmed Plano resident Ferko's claims. Neither NASCAR nor Ferko attorney Samuel A. Cherry Jr. could be reached for comment on Monday's proceedings, in which NASCAR's answer still contends that SMI, through its annual public filings with the Securities and Exchange Commission, admits that NASCAR is not obligated to give SMI any races. That contention, though, was rejected by the court when it denied NASCAR's motion to dismiss. Yet, the SEC filings serve as the foundation for NASCAR's cross-claim. In its answer to the lawsuit, NASCAR rejects Ferko's assertions that NASCAR broke a promise -- or an express contract -- to SMI of a second Cup date for TMS. The answer also denies Ferko's claim that NASCAR encouraged SMI to build TMS, purchase half of North Wilkesboro (N.C.) Speedway and transfer a North Wilkesboro date on the understanding that the Fort Worth racetrack would host two Cup dates each year -- an implied contract. To that end, NASCAR claims that Bruton Smith, SMI's chairman and CEO, "informed the media in 1995 that he in fact did not purchase an interest in the North Wilkesboro Speedway in order to acquire a NASCAR Winston Cup Series sanction agreement for Texas Motor Speedway." NASCAR also challenged the charge that it is a family-owned business, though four of its five board members are from the France family that founded NASCAR in 1948. Among Ferko's claims is that NASCAR is a monopoly and has acted in violation of the Sherman Antitrust Act by granting three new Cup dates to tracks owned by International Speedway Corp., which was also founded by the France family.(Fort Worth Star Telegram)(11-5-2002)
TMS company agrees with lawsuit UPDATE: A 15-page legal response filed Wednesday by Speedway Motorsports Inc., the parent company of Texas Motor Speedway, shows that SMI is in agreement with the major accusations of a lawsuit filed against NASCAR by an SMI shareholder. Francis Ferko of Plano filed a lawsuit that claims NASCAR has failed to deliver a promised second Winston Cup date to TMS, along with claims of alleged anti-trust violations. The suit was filed after SMI refused to take action on Ferko's complaints against NASCAR. A derivative-action lawsuit, such as the one filed by Ferko on behalf of SMI shareholders, requires a response from the corporation, which is not involved in the suit and is listed as a nominal defendant. SMI must state it agrees, disagrees or needs to clarify the position taken by the shareholder. It is clear in the response that SMI agrees with the key points of the lawsuit. For example, the response admits agreement with these allegations:
• "TMS was built after assurances from NASCAR that a new Winston Cup date would be created for TMS, that NASCAR encouraged and requested SMI transfer a race to TMS from a track in North Wilkesboro (N.C.), and as a result, TMS would host two Winston Cup races each year."
• "That [NASCAR chairman] Bill France Jr. and NASCAR promised SMI a second Winston Cup race would be provided to the Texas track no later than 1999. It is further admitted that France and NASCAR continued to make these promises in 1996, 1997, 1998 and thereafter."
• "It is admitted that neither France nor NASCAR ever rescinded this offer."
TMS was completed and opened in 1997. The first Winston Cup event at the speedway was held in March of 1997. The date it now has on the 36-race Winston Cup schedule came after SMI chairman Bruton Smith and New Hampshire International Speedway owner Bob Bahre each purchased 50 percent interest in the North Wilkesboro track, which had two Winston Cup dates. The North Wilkesboro facility was shut down so Smith could move one of its Cup dates to TMS, while Bahre moved the other to his facility in Loudon, N.H.(Dallas Morning News)(10-24-2002) UPDATE - NASCAR statement: NASCAR issued a statement today in response to a court filing this week by Speedway Motorsports Inc., in support of the Ferko Lawsuit. The statement reads: It comes as no surprise that, in its recent filing, Speedway Motorsports Inc. (SMI), has admitted what most suspected, that this suit is only about SMI's near-sighted desire to get a second NASCAR Winston Cup date at one of its tracks and to thereby increase its own profits without regard for the rest of the industry. SMI doesn't seek to better the sport but only to enrich itself at the expense of the sport and its fans. In contract, NASCAR's strategic approach to expanding racing locations has fostered strong, sustained growth and greatly enhanced competition throughout motorsports. SMI's claim in the court filing that it was promised a second NASCAR Winston Cup date directly contradicts the facts. They also directly contradict SMI's own certified public filings with the Securities and Exchange Commission (SEC), which specifically state that NASCAR has no such obligation. SMI's court filing is also full of inaccuracies and untruthful statements, including the allegation that NASCAR encouraged SMI to buy North Wilkesboro (N.C.) Speedway. The facts and evidence will show that NASCAR's approach to stock car racing is pro-competitive, that its growth strategy has been good for all of motorsports, and that it has acted lawfully at all times.(NASCAR PR via Insider Racing News)(10-25-2002)
TMS Lawsuit Update: The officials response from Speedway Motorsports Inc. on the legal action taken by SMI shareholder Francis Ferko of Plano against NASCAR is due Wednesday, legal officials involved in the case confirmed Tuesday. SMI's attorneys will file a legal brief stating whether SMI agrees, disagrees or needs to clarify the position Ferko has taken in filing a lawsuit claiming NASCAR has failed to deliver a promised second Winston Cup date to Texas Motor Speedway, along with claims of alleged anti-trust violations. A derivative-action lawsuit, such as the one filed by Ferko on behalf of SMI shareholders, requires a response from the corporation, which is listed as a nominal defendant. The SMI response is expected to agree with Ferko's position, except for clarifying some minor points in the lawsuit. NASCAR officials have hired David Boise to lead its defense team in the case. Boise was the lead attorney for Al Gore in the case that went to the Supreme Court over the Florida voting process in the 2000 presidential election.(Dallas Morning News)(10-23-2002)
Texas Lawsuit News: Sam Cherry, the lead attorney for Plano resident Francis Ferko's lawsuit against NASCAR, said it could be a year before the case goes to trial. Ferko, a shareholder for Speedway Motorsports Inc, is suing NASCAR and the International Speedway Corp. for alleged anti-trust violations and failing to give Texas Motor Speedway a second Winston Cup date. Cherry said the deposition and discovery stage could take more than nine months. Cherry is handling the common-law issues of the case from the Dothan, Ala., firm of Cochran, Cherry, Givens and Smith. The Washington, D.C., firm of Cohen, Milstein, Hausfeld & Toll is handling the antitrust implications. It's the same firm that was involved in the Microsoft anti-trust action.(Dallas Morning News)(10-3-2002)
Texas lawsuit moves on: An attempt to bring another Winston Cup race to Fort Worth appears to have cleared the first phase of legal proceedings. U.S. Magistrate Judge Robert Faulkner recommended Monday denying NASCAR's motion to dismiss any counts of a lawsuit that seeks a second Cup date at Texas Motor Speedway. The case should proceed to discovery hearings, said Samuel A. Cherry Jr., attorney for plaintiff Francis Ferko. Attorneys for Plano resident Ferko, a minority shareholder in TMS parent company Speedway Motorsports Inc., filed the lawsuit Feb. 13 in U.S. District Court in Sherman. NASCAR filed its motion to dismiss April 10. Though Faulkner's opinion is only a recommendation, it is unlikely that U.S. District Judge Richard Schell would not accept it, said Paul George, a professor of law at Texas Wesleyan. Though the case is likely to move forward, George said that facts of the lawsuit are not considered when judging motions to dismiss, and Faulkner's opinion is not an indication of the strength of Ferko's case. NASCAR took a similar position in its reaction to the court's opinion. "The magistrate's recommendation means only that he believes Mr. Ferko may seek discovery to see if his claims can be sustained," NASCAR senior vice president George Pyne said in a statement. "The magistrate did not rule that any of Ferko's claims have merit. Ferko's allegations are inconsistent with the facts." The lawsuit accuses NASCAR of breaching an "express" and "implied" contract with SMI, which claims it built TMS after receiving assurances from NASCAR that a race schedule would be arranged so that TMS could host two Winston Cup races each year. The lawsuit asks the court to order NASCAR to grant a second Winston Cup date to TMS, to reimburse SMI for lost revenues and damages that were sustained by not having the second date, and to change rules and practices to permit full and fair competition in hosting NASCAR-formatted races.(Fort Worth Star Telegram)(8-28-2002)
SMI/NASCAR Lawsuit: If the NASCAR racing schedule doesn't fit, the stock car giant must be split. That's the reasoning behind a federal lawsuit filed by controversial celebrity attorney Johnnie Cochran on behalf of a shareholder for the parent company of the Texas Motor Speedway -- Speedway Motorsports Inc. The suit seeks a second race date for the speedway, but Cochran's strategy goes much deeper than that, into the heart of the NASCAR hierarchy. In court papers filed in U.S. District Court in Sherman, Texas, Cochran alleges that privately-held NASCAR, owned by the France family, is a monopoly because it is the governing body of several major racing circuits and the France family also has a controlling interest in International Speedway Corp. The publicly-traded ISC owns and operates 13 major tracks, including Daytona International Speedway. Twelve of those tracks host 18, or half, of the 36 Winston Cup races -- the premier stock car racing series that features the likes of Jeff Gordon, Dale Earnhardt Jr. and Tony Stewart. Tracks owned by Speedway Motorsports, including Texas, host nine races. Cochran asserts in the documents that NASCAR and the Daytona Beach-based France family, which has owned and operated NASCAR for more than half a century, use monopolistic powers to maximize profits by making sure ISC-owned racetracks are taken care of first. Cochran points out that the three most recent tracks which received new race dates are owned or partly owned by International Speedway Corp. -- Kansas Speedway, Chicagoland Speedway and Homestead-Miami Speedway. About the lawsuit: In the lawsuit filed on behalf of Francis Ferko, a shareholder of Texas Motor Speedway's parent company Speedway Motorsports Inc., NASCAR has been accused of using "monopoly power" to keep the Texas speedway from receiving a second Winston Cup race date. THE KEY CHARGE: NASCAR, "in choosing to give three additional race dates to ISC tracks instead of a second race date to TMS (Texas Motor Speedway), has exercised its monopoly power arbitrarily and/or to self-deal, to the detriment of race-car drivers, their teams and sponsors and fans."
"NASCAR has no rules or bylaws to govern its discretion in awarding Winston Cup race dates to motorsports facilities. NASCAR, in its sole discretion, decides which motorsports facilities receive Winston Cup race dates. NASCAR's discretion is exercised by the majority of shareholders of ISC."
"NASCAR developed and implemented the Winston Cup points system in a manner that unnecessarily eliminates or severely impairs the ability of tracks to compete with NASCAR in the provision of dates for the premier NASCAR-format stock-car races."
"NASCAR has deterred drivers and their teams from participating in premier NASCAR-format stock-car races not sanctioned by NASCAR by engendering the belief (among drivers and their teams) that such participation would cause NASCAR to target their cars for pre- and post-race inspections, thereby exposing them to substantial fines and other sanctions. . . . by engendering the belief that such participation would cause NASCAR to more readily conclude that such drivers engaged in rough driving or other inappropriate behavior at NASCAR races, thereby exposing them to substantial fines and other sanctions."
"To impair the ability of tracks to compete in the provisions of dates for premier NASCAR format stock-car races, NASCAR has barred non-NASCAR-sanctioned races from claiming that the race was being conducted pursuant to NASCAR rules . . . and NASCAR has prohibited the use of non-NASCAR-sanctioned races of the car number NASCAR issues to drivers for NASCAR-sanctioned races."
(see full HUGE story at the Daytona Beach New Journal).(6-23-2002)
Lawsuit heating up: The lawsuit that seeks a second Winston Cup race for Texas Motor Speedway moved a step closer to a possible court date Monday, when the legal team representing Francis Ferko filed a response to NASCAR's motion to dismiss. Ferko is a shareholder in Speedway Motorsports Inc., the company that built and operates TMS. Ferko, a Plano resident, sued NASCAR on Feb. 13, accusing NASCAR of breaching express and implied contracts with SMI for a second Cup date at TMS. But NASCAR, in its April 10 filing, made four claims: that no agreement for a second date ever existed; that race sanctioning agreements with SMI make void any previous agreements and offer no guarantees for future dates; that SMI, through its filings with the Securities and Exchange Commission, admits that NASCAR awards races on a year-to-year basis; and that the four-year statute of limitations on Texas common-law claims has expired since the first TMS Cup race in 1997. Ferko's response, filed in U.S. District Court, attacks those claims and counters NASCAR's attempts to refute Ferko's charge that the sanctioning body monopolizes stock-car racing.(more at Fort Worth Star Telegram)(6-11-2002)
Lawsuit Update: .....a federal lawsuit is gaining momentum in New York, Washington, D.C., and Texas, threatening NASCAR's financial fiefdom and accusing the stock-car racing body of operating as an illegal monopoly. Bill France Jr., the son of late NASCAR founder "Big" Bill France, is up against some of America's most feared lawyers in a suit that could force unprecedented disclosure of NASCAR's closely guarded balance sheets. Johnnie Cochran is the high-profile front man. Another name, well known only in American's legal and corporate circles, signifies that Cochran is hoping for a long, fierce fight.(Newsday).(5-24-2002)
NASCAR asks lawsuit to be dropped: NASCAR has asked a judge to dismiss a lawsuit that claims the stock car association has illegally withheld a second Winston Cup date from the Texas Motor Speedway [TMS]. In the motion, filed in federal court, attorneys for NASCAR attack all counts of the lawsuit filed by Francis Ferko of Plano, a shareholder in Speedway Motorsports Inc. -- the company that owns and operates TMS. NASCAR contends that many of Ferko's "factual allegations" are false and that -- none of the claims has substantive merit, but even as a matter of pleading, they are so fatally deficient the court can dismiss them now.(CNN/AP)(4-11-2002)
$1 billion damages possible? UPDATE: A federal lawsuit filed earlier this year on behalf of the shareholders of Speedway Motorsports Inc., the parent company of Texas Motor Speedway, claims that NASCAR has a monopoly over stock-car racing by owning both the governing body and by having controlling interest in International Speedway Corp., the company that operates 13 major auto tracks. By NASCAR, the suit really means the France family, the people who have outright ownership of the group. In the suit, Texas Motor Speedway is simply asking for a second racing date, but it's the means to that end that make this case more interesting. The lawyer handling it? controversial celebrity attorney Johnnie Cochran. Cochran seems like he's ready for a fight. He says he has "in excess of 50 lawyers" ready to examine the practices of NASCAR. At the center of the charges is the claim that NASCAR engages in "monopolistic" business practices. According to Samuel Cherry, the Cochran-firm partner who is supervising the litigation, damages could reach $1 billion. He arrives at that figure because he believes that the lack of a second race has kept the stock price down. The suit, filed in U.S. District Court in Sherman, Tex., on Feb. 13, by Speedway Motorsports shareholder Francis Ferko of Plano, Tex., lists NASCAR, ISC and Speedway Motorsports (SMI) as defendants. Ferko has declined comment and referred all questions to his attorneys. SMI is only a "nominal defendant," according to the suit. SMI was named so that its executives can be kept informed of all aspects of the case.(Orlando Sentinel)(4-7-2002) UPDATE: see another story at the Fort Worth Star Telegram - TMS lawsuit gains spotlight this week by Jeff Wilson.(4-8-2002)
Shareholders of Speedway Motorsports sue NASCAR: Minority shareholders in Speedway Motorsports Inc. (SMI), the corporation that owns Texas Motor Speedway, have sued NASCAR, claiming it broke a promise to grant the speedway a second Winston Cup race. Cochran, Cherry, Givens and Smith of Dothan is spearheading the suit along with co-counsel Cohen, Milstein, Hausfield and Toll of Washington, DC. The suit accuses NASCAR of breach of contract and anti-trust matters, claiming that NASCAR promised SMI a second race date for Texas Motor Speedway, but reneged on the promise and instead granted races to tracks owned by International Speedway Corporation (ISC), in which NASCAR has a direct financial interest. The France family owns NASCAR as well as a controlling interest in ISC, which is also named as a defendant in the lawsuit. Since Texas Motor Speedway's launch in 1997, Winston Cup races have been granted to four ISC tracks. SMI's Las Vegas Speedway has also been granted a race. The suit acknowledges there is no written agreement between NASCAR and SMI to grant Texas Motor Speedway a second race date. However, NASCAR has traditionally operated by granting races on a year-by-year basis, so plaintiffs' attorneys believe the contract was a verbal one and is binding. The suit was filed last week in U.S. District Court in Sherman, Texas, close to Texas Motor Speedway. NASCAR officials said they have not had a chance to look at the suit.(LapbyLap), NOTE: it is the shareholders NOT the company that is suing NASCAR.(2-20-2002)