Princeton Economics Group, Inc.

The Sixth Circuit has upheld a lower court ruling excluding the testimony of the plaintiff's economists and granting summary judgment to NASCAR and ISC. In this case, the plaintiff, Kentucky Speedway, alleged that NASCAR attempted to monopolize the market for organizing and officiating premium stock car races, and that ISC, a related company which operates race tracks, attempted to monopolize the market for hosting premium stock car races.

The Circuit Court concluded that the lower court did not abuse its discretion in finding that the work done by the plaintiff's experts was unreliable. The plaintiff's experts defined the market in which NASCAR competes to include the sale of tickets and concessions to consumers, the sale of TV and radio rights to broadcasters, and the sale of advertising sponsorships to corporations. In evaluating this alleged market, the Circuit Court noted that NASCAR does not sell tickets (this is done by the tracks) and that broadcasters and corporate sponsors have a wide range of options to NASCAR racing that were not considered by the plaintiff's experts.

The Circuit Court also found that the Merger Guidelines market definition test performed by one of the plaintiff's economists was not proper. Rather than measuring the options that customers would choose in response to a small but significant and nontransitory increase in price, the analysis examined how prices and sales changed over time as demand grew.

The Circuit Court rejected the argument by plaintiff's counsel that racetracks - rather than broadcasters, corporate sponsors, and fans - are the consumers in the market in which NASCAR competes. The Court observed that this view contradicted the view expressed by the plaintiff's experts and was appropriately ignored by the lower court.

The Circuit Court also ruled that the plaintiff's experts did not properly consider the options available to customers in the alleged market for hosting premium stock car races where ISC competes.

Based on these failings, the Circuit Court upheld the lower court's ruling on summary judgment because, after the testimony from its economists is excluded, the plaintiff "lacks the ability to define the relevant markets necessary to succeed on its claims."

PEG worked with counsel for the defendants in this case. NASCAR was represented by David Boies, Stuart Singer, and Helen Maher of Boies, Schiller & Flexner, and by Matt Blickensderfer of Frost Brown Todd. ISC was represented by Guy Wade, III of Fulbright & Jaworski and by Jack Donson Jr. of Taft, Stettinius & Hollister. PEG's case team included Professors Ken Elzinga and Scott Masten, along with PEG economists Andy Abere and Peter Bronsteen.

Based on their work on this case, Drs. Abere, Bronsteen, and Elzinga have written "The Economics of NASCAR," which will be published in The Oxford Handbook of Sports Economics by the Oxford University Press in 2010.

"The Economics of Nascar" can be downloaded here.

Citation: Kentucky Speedway, LLC v. NASCAR et al., No. 08-5041 (6th Cir. Dec. 11, 2009).

The Circuit Court opinion can be downloaded here.