NASCAR, ATT continue court battle

NASCAR and AT&T go back to court this week, at odds over the paint scheme on Jeff Burton's No. 31 Chevrolet. But the larger issue of exclusivity in the wireless category will loom over the proceedings.

Sprint Nextel, NASCAR's top series sponsor, bought the largest sports sponsorship ever sold, exclusivity included, and has spent close to $100 million a year since 2004. Cingular and Alltel were allowed to stay as team sponsors under certain restrictions.

But in a preliminary injunction ruling in May, a judge said AT&T could replace Cingular on the No. 31 Nextel Cup car because the restriction on rebranding wasn't spelled out in NASCAR's contract with Richard Childress Racing.

Those in the industry said it was widely known that Cingular and Alltel could not rebrand if one of them merged with another company in the volatile telecom world. But NASCAR didn't put it in writing, so AT&T's blue globe has been on the hood of the orange No. 31 for the past two-plus months.

"AT&T has nothing to lose," said Zak Brown, founder and CEO of motorsports agency Just Marketing. "They might not have very good relationships in the industry, but they've got the globe on the car. It just shows how corporate the sport is.

"In the old days, you'd get called into the (NASCAR trackside) trailer and sort it out. But the days of going to the trailer are long gone."

AT&T's emergence in NASCAR this year has led Sprint Nextel to say that its exclusivity has been compromised. And it remains at risk, based on the current legal precedent. Alltel is ripe for acquisition, analysts say, which could allow another company to rebrand Alltel on the No. 12 Penske Racing entry. Alltel was bought earlier this year by two private equity firms.

"For Alltel and other brands with competitive categories, this will make them take notice," said Jonathan Gibson, vice president of marketing at Pierce Promotions and a former executive at Miller Brewing. "This is one of the first major cases of somebody pushing the envelope. NASCAR and other sanctioning bodies selling entitlements are going to have to closely monitor their language in these contracts and watch for potential changes. You can't predict every change, but you have to be strategic in your approach."

Unless the judge hearing NASCAR's appeal of the preliminary injunction on Thursday overturns the ruling, Sprint Nextel must prepare for its next move. More at Sporting News