NASCAR on Wednesday petitioned U.S. District Judge Kenneth D. Bell to order racing teams that aren’t part of 23XI Racing and Front Row Motorsports’ antitrust case to provide financial documents related to costs, revenues and profits since those teams aren’t willing to share them. If Bell refuses, NASCAR insists he should rule that this type of data is “irrelevant at trial.”
Joe Gibbs Racing, Hendrick Motorsports, Spire Motorsports IV, Trackhouse Racing, Penske Motorsports, Richard Childress Racing Enterprises, Wood Brothers Racing, RFK Racing, Legacy Motor Club, Hyak Motorsports, Rick Ware Racing, and Haas Factory Team are the teams at issue. Each signed charters and none is a party to the litigation.
NASCAR contends these teams possess crucial evidence that the association can’t otherwise obtain. This evidence is described as essential for NASCAR to be able to rebut the plaintiffs’ claim that it doesn’t “fairly” share “industry revenues” with teams. Along those lines, NASCAR’s use of charters, which guarantee teams a starting position in NASCAR-sanctioned races but restrict their opportunities to compete in other circuits, is central to the case.
In a brief authored by Tricia Wilson Magee and other attorneys from Shumaker, Loop, & Kendrick and Latham & Watkins, NASCAR says it subpoenaed the teams in April and sought 11 categories of documents. After discussion with those teams, NASCAR agreed to narrow its request. But the teams still won’t produce the records, with NASCAR attributing their decision to confidentiality concerns. NASCAR maintains this concern is misplaced. The litigation is governed by a protective order that shields some materials from public access. NASCAR asserts it has offered “extensive assurances” for confidentiality.
As NASCAR tells it, the teams have agreed to only share selected information that would feature redacted and anonymized data. NASCAR argues these limitations would invite “questions” about the admissibility of the data at trial and whether NASCAR’s experts could credibly draw from the data in formulating conclusions.
Teams, NASCAR argues, could “easily provide” the “ordinary-course financial documents” it seeks. The teams are described as “sophisticated companies” that rely on contemporary accounting practices. Audited financial statements, income statements, cash flow statements and other “ordinary course financials” are already generated by teams, NASCAR suggests.
NASCAR also contends that while it is the league in which teams compete, it nonetheless has “limited visibility into teams’ financial metrics.” Teams take in “substantial revenue from sponsorships” that are “separate from what they receive from NASCAR” in charters. This additional revenue allegedly represents a “major component of the industry revenue” at issue.
Bell, NASCAR argues, shouldn’t permit 23XI Racing and Front Row to accuse NASCAR of unfairly sharing revenue with charter teams if NASCAR can’t ascertain the financial health of those teams. NASCAR makes that point as the Dec. 1 trial date looms. If Bell refuses to order racing teams to divulge financial information and permits NASCAR to be accused of unfairly sharing revenue, and if NASCAR loses the trial, NASCAR would be armed with a potential appellate argument that Bell erred.
Penske Motorsports is owned by Roger Penske and is not related to Penske Media, the parent company of Sportico.
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