Economist says NASCAR owes $364.7M to teams in antitrust case
CHARLOTTE N C AP An economist testified in Michael Jordan s federal antitrust trial against NASCAR that the racing series owes a combined million in damages to the two teams suing it over a revenue-sharing dispute Edward Snyder a professor of economics who worked in the antitrust division of the Department of Justice and has testified in more than cases including Deflategate involving the NFL s New England Patriots testified on Monday He gave three specific reasons NASCAR is a monopoly participating in anticompetitive business practices Using a complex formula applied to profits a reduction in sphere revenue and lost revenue to XI Racing and Front Row Motorsports from - Snyder came up with his amount of damages owed Snyder applied a of revenue sharing he alleged Formula gives to its teams in his calculations Snyder identified that NASCAR s revenue-sharing model when its charter system began in gave only to the teams The suit is about the charter agreement which was presented to teams on a Friday in September with a same-day deadline to sign the -page document The charter offer came after more than two years of bitter negotiations between NASCAR and its teams who have called the agreement a take-it-or-leave-it ultimatum that they signed with a gun to their head A charter is similar to the franchise model in other sports but in NASCAR it guarantees teams spots in the -car field as well as specific revenue Jordan and three-time Daytona winner Denny Hamlin for XI along with Front Row Motorsports and owner Bob Jenkins were the only two teams out of to refuse the new charter agreement Snyder s evaluations unveiled NASCAR was in fact violating antitrust laws in that the privately owned racing series controls all bargaining because teams don t have anywhere else to sell their services Snyder revealed NASCAR controls the tracks the teams and the cars Snyder repeatedly cited exclusivity agreements NASCAR entered into with racetracks after the charter system began The agreements prevent tracks that host NASCAR from holding events with rival racing series Prior to the long-term agreements NASCAR operated on one-year contracts with its host racetracks The Florida-based France family founded NASCAR in and along with Speedway Motorsports owns almost all the tracks on the top Cup Series schedule Snyder s belief is that NASCAR entered into exclusivity agreements with tracks to stave off any threats of a breakaway startup series In doing so he commented it eliminated teams ability to race stock cars anywhere else forced them to accept revenue-sharing agreements that are below realm value and damaged their overall evaluations Snyder did his calculations for both teams based on each having two charters each purchased a third charter in late and uncovered XI is owed million while Front Row is owed million Based on his calculations Snyder determined NASCAR shorted chartered teams billion from - Snyder noted NASCAR had billion in assets an equity value of billion and an investment-grade credit rating which Snyder believes positions the France family to be able to pivot and adjust to any threats of a rival series the way the PGA did in response to the LIV Golf league The PGA Snyder testified got creative in bringing in new revenue to pay to its golfers to prevent their defections Snyder also testified NASCAR had million in annual earnings from - and the France family took million in distributions during that period NASCAR contends Snyder s estimations are wrong that the F model he used is not correct and its own two experts take serious issue with Snyder s findings Defense attorney Lawrence Buterman urged Snyder his opinion on NASCAR s upcoming expert eyewitnesses and Snyder declared they were two of the best economists in the world Slow pace of trial Snyder testified for almost the entirety of Monday s session the sixth day of the trial and will continue on Tuesday The snail s pace has agitated U S District Judge Kenneth Bell who heard arguments minutes early Monday morning because he was annoyed that objections had been submitted at a m and then a m He needed an hour to get through the rulings and testimony resumed minutes behind schedule When the day concluded he required the nine-person jury if they were willing to serve an hour longer each day the rest of the week in an effort to avoid a third full week of trial He all commented all motions must be filed by p m each evening moving forward Bell wants plaintiff attorney Jeffrey Kessler to conclude his matter by the end of Tuesday but Kessler communicated him he still plans to call NASCAR chairman Jim France NASCAR commissioner Steve Phelps and Hall of Fame gang owner Richard Childress who was the subject of derogatory text messages amongst NASCAR leadership and has declared he s considering legal action NASCAR has a list of prospective bystanders and Bell announced he yearned the first one on the stand before Tuesday s session concludes AP auto racing https apnews com hub auto-racing Source
