Judicial Victory for 23XI Racing and Front Row Motorsports in Antitrust Litigation Against NASCAR
A federal judge issued a significant victory for two racing teams, one of which is owned by Michael Jordan, in the antitrust lawsuit filed against NASCAR by 23XI Racing and Front Row Motorsports. United States District Judge Kenneth Bell ruled in favor of 23XI, owned by Jordan and Denny Hamlin, three-time Daytona 500 winner, and Front Row, owned by Bob Jenkins, in a dispute over the definition of the “premier stock car racing” market. Bell determined that NASCAR controls the market, invalidating NASCAR’s argument that teams can compete in other series.NASCAR is trying its best to resolve the federal antitrust lawsuit.
Steve Phelps, NASCAR Commissioner
The teams argued that the relevant market for top-tier stock car racing teams is where “the NASCAR Cup Series is currently the only buyer.” This statement was supported by the expert opinion of Dr. Daniel Rascher, who concluded that “top-tier stock car racing” is a distinct form of auto racing, and that other types of motorsports such as Formula 1 and IndyCar, as well as lower levels of stock car racing, are not equal substitutes for NASCAR.
In a counterclaim, NASCAR alleged that the teams illegally conspired by joining together to negotiate new charter agreements. However, Bell determined that NASCAR “deliberately, clearly, and unequivocally” alleged that the relevant market is “the market for the entry of cars into NASCAR Cup Series races in the United States and anywhere else a Cup Series race is held.” The lawsuit was filed a year ago by 23XI Racing and Front Row Racing, who were the only two organizations out of 15 that did not sign extensions to the new charter agreements.These new charter agreements were presented to the teams at the beginning of the 2024 playoffs, with a deadline for signing. This came after more than two years of tense negotiations over the charters, which are the core of NASCAR’s business model, as they guarantee income and access to weekly races.
23XI and Front Row could go bankrupt without them and are competing this season without statutes, which leads to a significant reduction in prizes. The trial is scheduled for December 1st.NASCAR, in its own statement, highlighted its commitment to building NASCAR as the premier motorsports series in the United States since its founding in 1948. Commissioner Phelps did the same last week, defending the France family, based in Florida, who founded and controls NASCAR and most of the tracks that the series uses for events. The organization expects to demonstrate that it became the leading motorsport in the United States through hard work, risk-taking, and many significant investments over the past 77 years. NASCAR believes in the charter system and will continue to defend it from the efforts of 23XI and Front Row to claim that the charter system itself is anti-competitive.We are very pleased with the Court’s decision today, which ruled in our favor. This means that the trial can now focus on whether NASCAR has maintained that power through anticompetitive acts and used it to harm the teams.
Jeffrey Kessler, attorney for 23XI and Front Row
If an agreement isn’t reached before the trial and NASCAR loses, the entire charter system risks being dismantled or revised. Teams are frustrated by that threat, and it’s understood that NASCAR has since agreed to make the charters permanent and the sticking point in settlement talks is the amount of money that 23XI and Front Row are demanding in damages and legal fees.
Teams are concerned that the entire NASCAR framework could be destroyed by a loss and are upset because it would be due to the monetary demands being made by 23XI and Front Row. Last week, Bell issued another victory for 23XI and Front Row when he dismissed NASCAR’s counterclaim against Curtis Polk, Jordan’s longtime business manager and one of the owners of 23XI.
