SMI Buys Kentucky; Lawsuit Against NASCAR, ISC To Continue

[DebWilliams-GFN]

By Deb Williams

CONCORD, N.C. (May 22, 2008) – Kentucky Speedway has been sold to Speedway Motorsports Inc., but a track official said Thursday the federal antitrust suit that was filed nearly three years ago against NASCAR and International Speedway Corp. by Kentucky Speedway LLC would continue.

Jerry Carroll, chairman of Kentucky Speedway, said Kentucky Speedway LLC would continue with the litigation because “we believe we have a good appeal.”

“It [the litigation] will continue as long as we think there is an opportunity to do something right, to get an even playing field,” said Carroll, who has an agreement with SMI Chairman and CEO Bruton Smith to remain at the speedway, but didn't retain any ownership. “We would be remiss if we said, 'Well, we've sold it and now we're going to leave.' It wasn't a money matter and it never was. It mattered on the even playing field, the right, that if somebody in this country is entering a free enterprise situation and they want to put the money up and take the risk and build the track, they ought to at least have an opportunity, if they build it in the right market, (to have a race.) We were always told we were in the wrong market. I don't think that was the case and Bruton Smith has shown us that wasn't the case.

“We should have had a Cup race in 2002, or 2003 anyway. We offered to have a Cup race there instead of the date that was being saved for New York. I thought Darrell Waltrip made a good deal. He said, 'Why don't you give Kentucky the Cup race you're holding for New York City and let us have it and when you get the track built in New York, we'll give it back to you?' Everybody would have made money. We have sponsors waiting in line (for a Cup race).”

Kentucky officials filed the federal suit against NASCAR and ISC in July 2005. The suit alleged the two companies controlled by the France family had violated federal antitrust laws by illegally restricting the awarding of Cup races. Filed in U.S. District Court for the Eastern District of Kentucky at Covington, the suit also alleges antitrust violations relating to various restraints of trade involving the Busch [now Nationwide] and Craftsman Truck races.

NASCAR sanctions and oversees its racing series, while ISC owns or controls 12 of the 22 tracks at which the Cup cars currently race. With the acquisition of Kentucky Speedway, SMI will own eight speedways, seven of which already have Cup dates. Only three tracks on the Cup schedule aren't owned by either ISC or SMI – Pocono, Dover and Indianapolis.

SMI's acquisition of Kentucky Speedway is expected to close in the third quarter of 2008.

“This is one of the best deals, in my opinion, that I've ever been able to make in this sport,” said Smith, who has placed a “For Sale” sign on North Wilkesboro [N.C.] Speedway. “It [Kentucky] is a hot bed of racing. They love what we do and I think you will see us do some spectacular things there. It's going to be extremely popular.”

With the purchase of Kentucky Speedway, SMI will own race tracks in the West, Northeast, Midwest, Southeast and Southwest, including four of the nation's top-10 designated market areas. The breakdown is: the fifth-largest market [Texas/Dallas-Forth Worth]; the sixth-largest market [Infineon/San Francis; the seventh-largest market [New Hampshire/Boston]; the eighth-largest market [Atlanta]; the 25th-largest market [Lowe's/Charlotte]; the 33rd-largest market [Kentucky/Cincinnati]; the 43rd-largest market [Las Vegas]; and the 91st-largest market [Bristol/Tri-Cities].

Smith said he expected the 1.5-mile Kentucky track to have a NASCAR Sprint Cup race in 2009. However, Smith declined to say if a track currently in the SMI fold would lose a date to Kentucky, or which track was next on his agenda to purchase.

“I called Brian [France, NASCAR chairman] this morning to let him know what we were doing today,” said Smith, who emphasized he wouldn't start a new series that would rival NASCAR. “That's the only conversation we have had. We have not discussed it [a Cup date next year], because I don't know exactly what to discuss at this time.”

Carroll, who has devoted 10 years to Kentucky Speedway, said selling the track was bittersweet, but he had a dream, the state of Kentucky joined it, and now Smith would make that dream come true.

“I'm a dreamer like Bruton,” Carroll continued. “I'm going to continue on and make sure it's handled the way we want it to be handled. I want the best thing to happen for the state of Kentucky. They have $90 million in this. I think Bruton saw the market and understands what we can do. It's about time somebody realized this track deserved a (Cup) race.”

Carroll says the thing he has learned about Smith is that he delivers.

“He will bring a (Cup) race there next year,” Carroll continued. “I do not have any idea where it is coming from, but when he tells me he's going to bring a race ... we would not have done this deal if we didn't think Bruton was going to bring a race. I have four partners who have been very generous, and who went out of their way to make sure a race was secured. We have taken a beating for eight years.”

When asked if Kentucky would get its first Cup race before Las Vegas received its second, Smith said he wasn't prepared to answer the question at this time. However, he didn't rule out taking a race date from one of SMI's current tracks to Las Vegas.

When asked if he would like to own Pocono Raceway, Smith, whose tap dancing around questions during Thursday's press conference made Fred Astaire look like an amateur, replied, “I don't believe I can answer that properly.”

“I'm always interested in a speedway,” Smith continued. “If I say something about Pocono, it would indicate to you that it's for sale. I don't know if it's for sale or not, but if you're telling me it is, then I'll make a telephone call tomorrow.”

Smith said he'd had no conversations with Pocono's owners and he couldn't address his intentions. Pocono owner Dr. Joe Mattioli has said previously that he had an agreement with NASCAR's first president, Bill France Sr., that the France family had first option on the track and it would be each family's grandchildren that would make the decision. Speculation Thursday morning at LMS had SMI purchasing the 2.5-mile Pocono facility.

Smith declined to say how much SMI paid for Kentucky Speedway, but Carroll said the investment on the $152 million track was not recouped in the sale.

“We never had any idea of selling it,” Carroll added. “It was never up for sale. In fact, I tried to buy tracks. I offered more for New Hampshire than Bruton paid for it. I don't think Pocono will ever sale. We also made a run at Dover. I really wanted to get into this business in a big way.”

Smith said SMI had been working on the purchase of Kentucky for “a little while.”

“We met a couple of times and I visited, I spent the whole day there and I liked what I saw,” Smith said about Kentucky. “We negotiated back and forth and we finally reached a decision. Will we make changes? You got that right. In fact, we've already been working on some ideas. We'll probably add 50,000 seats. That will take a couple of months to get that done.”

Carroll noted that Smith didn't like the garage layout, which three-time NASCAR champion Waltrip helped design.

Kentucky Speedway is nestled in the state's northern countryside just off I-71, the speedway is located on about 820 acres. It opened in 2000 and features chair-back grandstand seating for 66,089 spectators, 50 luxury suites with seats for approximately 2,000, 100 private RV spaces, 200 reserved camping spaces and 1,000 unreserved camping spaces. It's a 30-minute drive from Cincinnati and a 90-minute drive from Kentucky's two largest cities, Louisville and Lexington. Track officials maintain it also draws fans from two major Ohio cities, Columbus and Dayton.

Kentucky Gov. Steve Beshear plans to attend Sunday's Coca-Cola 600 at Lowe's Motor Speedway and be a guest in Smith's suite. It will be Beshear's first-ever Cup race.

“People turn out because they love that track and that's important when you're trying to produce a sell-out,” Kentucky native Michael Waltrip said. “They've done some amazing things with their crowds and with that race track. I know that now with what they have and what they've done will just continue with Bruton (Smith) owning it. I'm real proud that track has a future now and they know their direction.”