Opinion ID: 151442
Heading Depth: 3
Heading Rank: 4

Heading: The Sprint Car Summit and Hoosier's National Sprint Spec Tire

Text: In July 2006, DMS, competing sanctioning bodies, promoters, and track operators held a Sprint Car Summit to address the decline in car counts and fans at 410 sprint car races. Such sprint races are more likely to occur as part of a touring series of races. Touring series, in turn, typically showcase well-known drivers and promote rivalry between these prominent drivers and their local challengers. While STA was not invited, Hoosier was initially asked to attend. However, its invitation was eventually withdrawn. At the Summit, the attendees discussed several options for regenerating interest in sprint car racing, including possible tire improvements. After the Summit, the president of DMS, Deery, and its executive vice president, Benjamin Geisler, approached Hoosier, requesting that the tire manufacturer supply a less aggressive sprint tire that would promote movement and passing. They further discussed the possibility of entering into a contract to make Hoosier the exclusive tire supplier for sprint car races. On December 15, 2006, Hoosier accordingly entered into an exclusive three-year deal to provide right-rear tires for DMS's World of Outlaws sprint touring series. On the same day, Hoosier issued a press release announcing that it had developed a national sprint spec tire, which would be available in three different compounds. As part of this December 15, 2006 contract, Hoosier promised to pay DMS to solicit competing sanctioning bodies and others to enter similar exclusive contracts with the tire supplier. Geisler contacted various sprint car tracks, asking them to adopt the national sprint tire rule, and updated Hoosier itself as to which tracks and series were signing onto the rule. He specifically informed Hoosier that these track/series deals had to be completed quickly in order to fend off any plans from American Racer. (A1603.) In particular, STA's per-tire price for its sprint product was approximately $20 less than the per-tire price offered by Hoosier for its new national sprint tire. Like DMS, other sanctioning bodies have entered into automatically renewable contracts with Hoosier, which require them to promulgate and enforce a Hoosier-only tire rule. For instance, USAC announced an open tire rule for certain sprint events in January 2007. When Tony Rose, an STA representative, heard about a meeting between USAC and Hoosier, he asked USAC if he could attend, but was turned down. However, USAC ultimately adopted a Hoosier-only rule for the sprint events. In addition, a subsequent call by STA's general manager, Mateer, to USAC was not returned. Accordingly, STA's sprint tire sales have drastically fallen, even though a sprint racer won in 2006 using its American Racer tire. It appears that the sprint tire contract between Hoosier and DMS expired after the current appeal was filed. According to both Hoosier and DMS, DMS chose not to renew the contract with Hoosier and instead entered into an exclusive contract with Hoosier's competitor, Goodyear. STA additionally claims that Hoosier and WISSOTA used their collective market power to defeat a new sanctioning body called DTRA (Dirt Track Racing Association), which attempted to sanction tracks in WISSOTA's territory. Specifically, DTRA racers and drivers would have used less expensive Goodyear tires. But Paul Menting from Hoosier wrote to WISSOTA, stating, inter alia, that this is a sanctioning body war that involves Hoosier because we are partners with Wissota and that Hoosier would desire to attack common threats as partners. (A1599.) Hoosier declined to submit a proposal in response to DTRA's RFP, stating that, [i]n order to continue properly servicing and supplying our existing contract business, we cannot at this time commit ourselves to fulfilling a Spec Tire contract. (A1600.) Hoosier, acting through a distributor, also purportedly refused to sell to another touring series known as Carolina Clash because the series allowed its racers and drivers to use what the series believed was the more popular, cheaper, and superior American Racer product.