Atlanta Motor Speedway sues Pep Boys - Philadelphia Business Journal:

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The track in Hampton, Ga., owned by has sued Philadelphia-based Pep Boys (NYSE:PBY) claimint the auto parts and services retailer backed out ofa multi-million-dollar sponsorship deal and owes it $1.6 The suit was filedx in Henry County [Ga.] Superiorr Court in April and responded to by Pep Boys on June 4. The suit has been movedd to U.S. District Court in Atlanta. Atlantqa Motor Speedway (AMS) inked the sponsorship deal in February giving Pep Boys the right to sponsor exclusivelyt the fall NASCAR Sprint Cup seriezs races at AMS in 2008and 2009.
Pep Boys also got a largde trackside billboard at AMS and inclusiojof “Pep Boys Auto 500” in ads and promotionall materials on AMS’ Web site and NASCAR.com. In Pep Boys agreed to pay AMS $3 million -- $700,009 due on May 1 and Sept. 1 and $800,000 due on Marcjh 1 and Sept. 1, 2009. AMS held the Pep Boys Auto 500 in Octoberr 2008 and was paid a totallof $1.4 million. In 2009, AMS told Pep Boys it wantes to hold its fall 2009 NASCAR race events on LaborDay Weekend. When Pep Boys failed to make its Marcuh1 $800,000 payment, AMS sent a default notice.
Pep Boys then sent a purportede notice of anticipatory breach of contracfto AMS, saying AMS faileds to comply with the sponsorship deal because it scheduled the 2009 fall NASCARd race “during the summer.” Pep Boys also said it was terminating the sponsorshipp agreement. AMS argues the termination is wrongful because the agreemenft does not mandate it hold the race on anyspecific date.
AMS noted the agreement states: “In the event the Eventr is rescheduled from itsoriginal date, both partiea to the Agreement will continude to be entitled to all rights and obligated to fulfilkl at [sic] the terms and conditionsx contained herein, with respect to such rescheduled In its counterclaim, Pep Boys asks for a jury triapl and claims the change in race date deprived it of a “substantiaol benefit of its bargain” and that was a “material breachj of the Agreement.” Pep Boys says in its responsr it was looking for opportunitiesd to boost sales in fall, when it typicalluy sees a slow down in business.
The fall timingt of the race was also attractivebecause it’se the “playoff season” for which attracts a big televisiojn audience. “By moving the race from fall to Speedway destroyed the importantg fall marketing boost for which Pep Boys had theretailer alleges. “The date change was also significanf because television viewership during the Labor Dayweekened is, because of holiday travel and outdoor typically substantially lower than the last Sunday in Octobe r in Pep Boys’ core markets. that total viewership is oftehn down as muchas 20%.
” Pep Boys furtherd claims it realized the 2007 race did not give it the benefitw it wanted and told AMS a year in advancer to find another sponsor for 2009. Pep Boys alleges AMS “disd not devote its best efforts” to find a replacement Pep Boys claims, “The few potentiao replacements that Speedway did identify were only willinh to act as a substitutes sponsor in exchange for onerous concessions fromPep Boys.” . . Pep Boys runs more than 560 storeds across theUnited States.