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Racing
For me, telecom companies and wireless concerns are like the banking industry, where letters informing consumers that "your bank has been purchased by Bank X, and will now be called Bank Y, and your new credit card is in the mail" have become commonplace. Yet as normal as these takeovers are, its isn't if you happen to be Sprint Nextel, Richard Childress Racing (RCR) or AT&T Mobility/Cingular. NASCAR, in protecting its $700-million, 10-year, noncompete series sponsor contract agreement with Nextel, must litigate based on "saving face" aspects alone. Currently, only Alltel and Cingular are grandfathered into the series thanks to their "Cup active" status when Nextel signed its initial agreement beginning with the 2004 season. But there's more than meets the eye. In February of 2004, Cingular purchased the former AT&T Wireless Services, Inc., for $41 billion. Now the story comes full circle to the formation of the "new" AT&T Mobility; the "new" AT&T the same "old" Southwestern Bell Communications (SBC), which was the majority owner of Cingular Wireless LLC, and the original firm that signed the contract with RCR and NASCAR in 2002 for its Cingular effort before the grandfather clause took effect. Nextel signed on as series sponsor in 2004. Recently, AT&T Mobility and Childress inked a 10-year renewal to be the primary sponsor on the No. 31 RCR Chevy currently driven by Jeff Burton. This is a big deal, with huge company willing to commit major monies to a team that spends big dollars fielding its winning cars. In isn't Childress' fault that SBC, AT&T, Cingular Wireless, and now AT&T Mobility have been doing the "topsy turvy" all these years with name branding. In NASCAR's defense, they write the rulebook, with Nextel receiving exclusivity in the original major series sponsor contract. Again, no one should blame NASCAR for trying to protect its biggest investor. The bitter fact is that a ruling in NASCAR's favor could well harm one of its premier race teams, while NASCAR completes its own 2008 Cup series "logo and name change" for the exact same takeover/merge reasoning AT&T will bring to the table. An AT&T ruling, however, raises the chance of Sprint Nextel presenting its No. 1 nemesis, AT&T, the "big money" Cup championship. It could also spell an end to the Nextel agreement after 2008 if they feel a breach occurred, and the rumors of a five-year renewable option, not a 10-year series deal, is correct. Thus, this litigation brings to the forefront the fact that big business indeed has the power through litigation to stop a bigmoney deal because of what will be determined as exclusivity. As for grandfathering and company name merging, which will be the main AT&T defense, there is no middle ground with "exclusivity." The two are incompatible, and a judge will have to decide. Write to Greg Zyla in care of King Features Weekly Service, P.O. Box 536475, Orlando, FL32853-6475, or send an e-mail to letters.kfws@hearstsc.com.
(c) 2007 King Features Synd., Inc.
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