Can sports companies freely steer their biggest events to any location they desire or might antitrust laws mandate a different determination as to where such events are held? For nearly five years, the former owners of the Kentucky Speedway have put the pedal to the metal on this issue in their pursuit of an antitrust claim against NASCAR and the International Speedway Corp. (ISC), which owns speedways at which NASCAR events are held. Recently, however, the claims of the former Kentucky Speedway owners crashed and burned when the U.S. Court of Appeal for the Sixth Circuit made a sharp turn away from their allegations and rejected their appeal from a lower court dismissal of their claims.
The engines on this one started back in 2005 when the former owners alleged, in U.S. District Court of Eastern Kentucky, that NASCAR violated sections of the Sherman Antitrust Act by awarding the NASCAR Sprint Cup Series only to tracks owned by the ISC. Furthermore, the former owners claimed that, due to the alleged collusion between NASCAR and ISC, barriers to entry were formed that prevented them from buying other racetracks that already hosted the Sprint Cup. Given that the Sprint Cup is the major leagues of stock car racing, the lost profits from such alleged anticompetitive behavior were purported to have cost Kentucky Speedway in excess of $200 million.
The district court dismissed the former owners’ case after concluding the racing series did not constitute a relevant market and that no such market could be defined for purposes of federal antitrust law. Additionally, the case was dismissed because the court felt there was insufficient evidence to prove an illegal conspiracy in restraint of trade by NASCAR and ISC to monopolize the hosting and sanctioning markets, and since the expert testimony provided was not adequately supported to be admissible.
In agreement, the appellate court pulled-up alongside the lower court and labeled Kentucky Speedway a jilted distributor, holding that since Kentucky Speedway was not " "hampered in its efforts to bid for an independent track . . . antitrust law does not require that sellers of independent tracks make good business decisions." Although it might seem like the appellate court waved the checkered flag on the former track owners’ claims, they still have one path potentially open to them: they can seek a rehearing en banc before a panel of judges or, failing that, pursue a further appeal to the U.S. Supreme Court.
Oddly enough, if the suit is finally dropped, NASCAR might consider parking a Sprint Cup date at the Kentucky Speedway. NASCAR has told the current owners of the Speedway that it will consider doing so only when all lawsuits are resolved. Although this would please both local fans of the sport and the current owners of the track, the former owner plaintiffs are hardly incentivized by this possibility. Therefore, it should come as no surprise that at least one of the former owners is eager to fuel up for another lap, and has declared that the current decision “conflicts with established antitrust law.” But there’s another race to be won on this issue, as the owners are now suing each other over the right to continue the antitrust litigation against NASCAR.
Whether the former track owners tire of their pursuit of these antitrust claims is still to be determined, but one thing is for sure, their multiple year battle with NASCAR will make for a sizable chapter of their “auto” biographies.