Business of Speed<\/p>\n
The Money Behind the Motorsports Industry<\/p>\n
By: Tim Frost<\/p>\n
Date: May 1, 2018<\/p>\n
This month,\u00a0we\u2019ll take a look\u00a0at the legal aspects of racing\u00a0and their impact on\u00a0the economics of the\u00a0sport.<\/p>\n
Each year, the legal community\u00a0gathers for The\u00a0Racing Attorney Conference.\u00a0This event is hosted\u00a0by the North Carolina Bar\u00a0Association and the Indianapolis\u00a0Bar Association. The location rotates\u00a0between Charlotte\u00a0and Indy, attracting the\u00a0leading lawyers from the\u00a0epicenters of stock car and
\nopen-wheel racing.<\/p>\n
Periodically, the event\u00a0presents the TRAC Star\u00a0Award for outstanding\u00a0achievement in the field of\u00a0motorsports law. This\u00a0year\u2019s recipient was Steve
\nNewmark, president of\u00a0Roush Fenway Racing, for\u00a0his efforts with the\u00a0NASCAR Team Owners\u00a0Council, Race Team Alliance\u00a0and the formation\u00a0of the Charter System.<\/p>\n
While the emphasis is on\u00a0the law, the conference\u00a0presents ample opportunity\u00a0for education, development\u00a0and networking.\u00a0The agenda differs annually,\u00a0and this year\u2019s topics\u00a0included new team startups,\u00a0track risk and safety,\u00a0talent contracts, venue\u00a0and events, sponsorship,\u00a0eSports,\u00a0 intellectual property and accounting.<\/p>\n
When forming a race\u00a0team at any level, the organizational\u00a0aspects are similar\u00a0to most business \u2014\u00a0what type of legal entity,\u00a0drafting the agreements
\nand filing the proper paperwork\u00a0with the government.<\/p>\n
Where to locate is also an\u00a0important decision as certain\u00a0states have recognized\u00a0the importance of the vibrant and growing motorsports industry.<\/p>\n
North Carolina offers\u00a0race team incentives for\u00a0aviation fuel tax, tangible\u00a0personal property tax and\u00a0an engine lease sales tax\u00a0exemption. Indiana has a\u00a0headquarters relocation\u00a0tax credit, motorsports\u00a0sales tax exemption and\u00a0various incentive tax credits.<\/p>\n
For example, NASCAR\u00a0teams and drivers who\u00a0base their airplanes in\u00a0North Carolina may be eligible\u00a0for refunds if they\u00a0are flying to a motorsports
\nevent, including races,\u00a0sponsor functions and\u00a0testing. The state of Indiana\u00a0has offered incentives\u00a0to Dallara \u2014 the sole Indy car supplier Indy car chassis\u00a0and aero kits.<\/p>\n
In order for a driver to race, he or she must typically\u00a0have a competition license.\u00a0Each series has its\u00a0own specific requirements,\u00a0but typically drivers must\u00a0be 18 years old, pass a driving\u00a0ability test, be physically\u00a0and mentally\u00a0competent and execute\u00a0various authorizations\u00a0and releases. They are subject to various rules,\u00a0regulations and policies,\u00a0including personal conduct and substance abuse.\u00a0Drivers must also hold a\u00a0current ACCUS \u2014 FIA license\u00a0and meet immigration\u00a0requirements if\u00a0applicable.<\/p>\n
The classification of\u00a0minor applies to a person\u00a0who has not yet reached 18\u00a0years of age. This has been\u00a0in the spotlight as more\u00a0drivers have been rising\u00a0through the ranks at\u00a0younger ages. Basically, if\u00a0a minor wishes to participate\u00a0in a professional race,\u00a0he or she must meet specific\u00a0requirements for\u00a0emancipation. The minor\u00a0and the parents appear before\u00a0a court and demonstrate\u00a0the individual has\u00a0the maturity to understand\u00a0the hazards and\u00a0risks of racing and has\u00a0substantial prior experience\u00a0in the sport.<\/p>\n
The interaction among\u00a0stakeholders in motorsports\u00a0involving business\u00a0and legal issues may lead\u00a0to disputes. The best way\u00a0to resolve these matters is\u00a0to perform due diligence\u00a0on the front-end. This\u00a0means do research, background\u00a0checks and disclosures\u00a0and obtain\u00a0guarantees. Be specific in\u00a0the definition of category\u00a0exclusivity, key deliverables\u00a0and payment schedules.\u00a0Unfortunately, sponsor\u00a0payments may cease, or\u00a0drivers do not perform on\u00a0the track. There may be a\u00a0remedy for breach of contract. The front-end expenses\u00a0incurred by a race\u00a0team during the offseason\u00a0may present a different\u00a0view than the sponsor for\u00a0an upcoming set of current\u00a0races. An important factor during dispute resolution\u00a0is to maintain confidentially.<\/p>\n
Drivers are subject to an\u00a0increasing complex set of\u00a0demands off the track.\u00a0They must comply with\u00a0needs of the team, sponsors\u00a0and series. These are
\nspecified in a complex set\u00a0of legal contracts and\u00a0agreements. A larger part\u00a0of their interaction involves\u00a0social media. This\u00a0promotional platform
\nreaches a larger audience.\u00a0Their actions need to control\u00a0the flow of messaging\u00a0while still being authentic.\u00a0They must meet the contractual nature of specific\u00a0moral clauses and proper\u00a0disclosures of endorsements\u00a0and testimonials.<\/p>\n
The intersection of law\u00a0and business matters are\u00a0always important to\u00a0teams, drivers, series officials\u00a0and sponsors on and\u00a0off the track.<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
Business of Speed The Money Behind the Motorsports Industry By: Tim Frost Date: May 1, 2018 This month,\u00a0we\u2019ll take a look\u00a0at the legal aspects of racing\u00a0and their impact on\u00a0the economics of the\u00a0sport. Each year, the legal community\u00a0gathers for The\u00a0Racing Attorney Conference.\u00a0This event is hosted\u00a0by the North Carolina Bar\u00a0Association and the Indianapolis\u00a0Bar Association. The location rotates\u00a0between […]<\/p>\n","protected":false},"author":5,"featured_media":523,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/businessofspeed.com\/index.php?rest_route=\/wp\/v2\/posts\/521"}],"collection":[{"href":"https:\/\/businessofspeed.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businessofspeed.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businessofspeed.com\/index.php?rest_route=\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/businessofspeed.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=521"}],"version-history":[{"count":8,"href":"https:\/\/businessofspeed.com\/index.php?rest_route=\/wp\/v2\/posts\/521\/revisions"}],"predecessor-version":[{"id":530,"href":"https:\/\/businessofspeed.com\/index.php?rest_route=\/wp\/v2\/posts\/521\/revisions\/530"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businessofspeed.com\/index.php?rest_route=\/wp\/v2\/media\/523"}],"wp:attachment":[{"href":"https:\/\/businessofspeed.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=521"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businessofspeed.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=521"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businessofspeed.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=521"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}