More Problems for Texas Motorcycle Race
(CN) - The former promoter of the annual MotoGP motorcycle race in Austin sued the operator of the Circuit of the Americas race track, claiming it tortiously interfered with the promoter's contract.
3fourTexasMGP sued Circuit of the Americas LLC and COTA president Steve Sexton in Travis County Court, Austin.
In its 12-page complaint, 3four claims it acquired rights to the race from 2013 to 2022 from Dorna Sports S.L., the Spanish promoter of MotoGP.
MotoGP is the highest class of Grand Prix motorcycle racing, featuring bikes that are not street legal, nor available for purchase by the public.
"Defendants COTA and Steve Sexton wanted the MotoGP race, but did not want to have to pay 3four as the promoter," the complaint states. "So while purportedly negotiating with 3four, COTA was actually scheming to side-step 3four and deal directly with Dorna so it could pay less by cutting 3four out of the picture. Through tortious interference and fraud, COTA and Sexton encouraged Dorna to breach and purportedly terminate 3four's agreement to avoid the obligation to pay 3four."
During negotiations with COTA, 3four claims, Sexton acknowledged 3four's exclusive right to promote MotoGP in Texas. It claims that in a June email, Sexton said that if 3four decided to promote the race elsewhere in the state, "we fully understand that option and will not stand in the way."
3four accuses COTA of saying it was interested in signing an agreement with 3four, while it surreptitiously negotiated with Dorna, encouraging it to drop the plaintiff.
"COTA contacted Dorna officials and Bridgepoint (Dorna's parent entity) multiple times with false accusations about 3four," the complaint states. "COTA and Sexton accused 3four of attempting to overcharge COTA for the right to host MotoGP and made outrageous and false claims to Dorna about the amounts of the offers it supposedly extended for the promotion rights to MotoGP, including amounts ranging from $4 to $10 million."
3four claims the track never made any such offer and that the defendants accused it of trying to make too much money and blocking COTA from reaching an agreement.
"In reality, 3four has repeatedly offered a promoter-friendly contract to COTA (and one of the cheapest MotoGP contracts in the world) that it could have signed on multiple occasions," the complaint states. "However, through these backdoor efforts, COTA sought to obtain a cheaper contract directly with Dorna by causing Dorna to breach and purport to terminate its agreements with 3four."
3four claims that were it not for the defendants' interference, it could have contracted with another Texas track to hold the race, possibly Texas World Speedway in College Station.
Dorna, which is not a party to the suit, said Wednesday that it "had no other alternative than to terminate" the contract with 3four, according to the Austin American-Statesman.
"On the first days of June 2012, Dorna required 3four Texas MGP LLC to provide satisfactory evidence before June 28th about the company having obtained all the necessary rights, licenses and permits related with the availability of the Circuit of the Americas. This is a standard procedure when the Promoter is not the owner of the Circuit," the American-Statesman reported, citing "(the) full statement from Dorna."
Dorna told the Statesman that 3four was unable to produce evidence that it had obtained the rights in question, so it terminated the agreement on July 2. It says it then offered COTA the chance to promote the race.
In March this year, the founder and former promoter of the inaugural Formula 1 race at the track, planned for November, sued COTA , claiming he was frozen out as well. In that complaint, Tavo Hellmund and Full Throttle Productions claimed they spent 7 years doing the footwork of designing the track and support facilities and securing the rights to host Formula 1, MotoGP and Australian V8 Supercars races in Texas.
Hellmund claimed that "financial moguls" Robert Epstein and Billy Joe "Red" McCombs were given a 75 percent interest in the project in exchange for providing capital to build and operate the track.
Hellmund said that within months, his partners froze him out of the company and ignored his suggestions, though he was the only partner with motorsports experience. He claimed they failed to pay his salary and failed to provide the promised financial resources for construction of the track.
3four seeks actual and punitive damages for tortious interference and fraud. It is represented by Austin Tighe with Feazell Tighe in Austin.