Monday, June 18, 2007

Good News And Bad News For AT&T

Jeff Burton and his sponsor, AT&T, have signed contract extensions with Richard Childress Racing that ensure they will remain together for the foreseeable future. No terms of the deal were released.

AT&T, formerly known as Cingular Wireless, has sponsored a Nextel Cup team for 10 years, and is in its sixth season with RCR's No. 31 Chevrolet. Burton began driving the car in 2005, and has two wins, four poles, 15 top-five and 33 top-10 finishes in 85 races.

The news was not all good for AT&T this weekend, though, as NASCAR filed a $100 million counter claim against the company yesterday, accusing them of interfering with its exclusive sponsorship agreement with Nextel. The suit asks that NASCAR be allowed to remove AT&T -- and all telecommunications companies other than Nextel – from the Nextel Cup Series, beginning in 2008.

NASCAR alleges breach of contract, fraud, misrepresentation, and conspiracy to aid and abet wrongful interference with Nextel’s contract to serve as title sponsor of the series. The sanctioning body claims that Nextel enjoys exclusivity as part of its 10-year, $700 million sponsorship, but U.S. District Judge Marvin Shoob issued a preliminary injunction last month that allows Cingular logos to appear on Jeff Burton’s car. He also barred NASCAR from interfering with AT&T's status as primary sponsor of the car.

NASCAR alleges that AT&T and Cingular breached their contract with NASCAR by refusing to abide by NASCAR rules. The filing stated in part, "Cingular’s refusal to follow NASCAR rules and accept NASCARs denial of this paint scheme, and the filing of this lawsuit, has undermined NASCARs authority as the sanctioning body of stock car auto racing.”

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