ATT Sues NASCAR

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HAMPTON, Ga. - In a case that could have far-reaching implications for the structuring of sponsorship contracts in NASCAR racing, AT&T has filed suit against NASCAR in U.S. District Court in Atlanta, Sporting News confirmed Friday.

At issue, according to published reports, is the re-branding of Cingular Wireless as AT&T Wireless resulting from a federally approved merger between the two companies. Cingular sponsors the No. 31 Chevrolet owned by Richard Childress and driven by Jeff Burton.

Sprint/Nextel, a competitor of AT&T in the wireless communications arena, is the title sponsor of the Nextel Cup Series. The sponsorship agreement between Sprint/Nextel and NASCAR precludes any other wireless companies from sponsoring cars in the series. Alltel (which sponsors the No. 12 Dodge of Ryan Newman) and Cingular were grandfathered into the series because their agreements predated the title sponsorship of Sprint/Nextel.

Due to a planned phase-out of the Cingular brand, AT&T is seeking to replace the Cingular logos on Burton's car with AT&T logos. Talks between NASCAR, Richard Childress Racing and AT&T reportedly reached an impasse.

It is AT&T's contention that nothing in its sponsorship contract prohibits a name change - only that AT&T cannot increase its brand position on the car (Cingular is the primary sponsor) or transfer the sponsorship to another car.

NASCAR spokesperson Kerry Tharp said the sanctioning body was aware of the lawsuit only through reports in the media. It is NASCAR's official policy not to comment on the specifics of litigation while it is in process.

The filing of the suit preempted Burton's hope that a reasonable solution could be reached.

"It's going to have to be resolved," Burton told reporters Friday morning. "There comes a point where there are decisions that have to be made. From a company standpoint, we can't operate without sponsorship. We're going to have to get it resolved. Sponsors just don't fall out of trees. We could be in the position of not having sponsorship, and, of course, that puts me and my whole team in a position to decide what we are going to do. I certainly don't want to be in that position, especially when we have a company that is willing to step up to the plate and sponsor us for many, many years in the future."

On a related note Friday, Robby Gordon removed the Motorola decal from the hood of his No. 7 Ford after NASCAR officials informed him that using Motorola as a primary Nextel Cup sponsor also violated a specific exclusivity provision of the title sponsorship agreement with Sprint/Nextel. Motorola has been an associate sponsor on Gordon's Cup car for the first three races of the season, which is permissible under the agreement.

"As the sanctioning body, it is NASCAR's responsibility to police the sport," Tharp said. "There are certain contractual agreements that must be abided by as they pertain to paint designs and sponsorships and how they are utilized. This was one of those cases."

Ironically, Sprint/Nextel uses Motorola as a supplier of cellular phones - as do many wireless service providers - and promotes Motorola phones in some of its advertising.

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