Court ruling pressures NASCAR in antitrust case with 23XI Racing

Key Legal Victory for 23XI Racing and Front Row Motorsports in NASCAR Lawsuit

A federal judge issued a significant victory for two racing teams, one owned by Michael Jordan, in the antitrust dispute against NASCAR, putting pressure to reach a settlement. Judge Kenneth Bell ruled in favor of 23XI Racing, owned by Jordan and Denny Hamlin, along with Front Row Motorsports, owned by Bob Jenkins, regarding the definition of the market for “premier stock car racing.” The judge determined that NASCAR controls the market, invalidating NASCAR’s argument about the possibility of teams competing in other series.

Judge Bell found that NASCAR controls the market.

Judge Kenneth Bell

The teams argued that the relevant market for top-tier stock car racing is dominated by NASCAR, supported by the expert opinion of Dr. Daniel Rascher, who concluded that this form of racing is distinct and has no equivalent substitutes in other categories such as Formula 1 or IndyCar. NASCAR filed a counterclaim alleging an illegal conspiracy by the teams in the negotiations of the charter agreements, but Judge Bell determined that NASCAR explicitly defined the relevant market as “the market for the entry of cars in NASCAR Cup Series races in the United States and any other location where a Cup Series race is held.” The lawsuit was filed a year ago by 23XI Racing and Front Row Racing, the only teams that did not sign the extensions of the new charter agreements. These agreements are crucial to NASCAR’s business model, guaranteeing revenue and access to weekly races. 23XI and Front Row could face significant financial difficulties without these agreements, competing this season without statutes, which implies a reduction in prizes. Attempts at mediation and private negotiations have been made, but they have been unsuccessful. The trial is scheduled for December 1st.

We are very pleased with the Court’s decision today, which rules in our favor.

Jeffrey Kessler, lawyer for 23XI and Front Row

NASCAR, for its part, defended its track record in the development of motor racing, stating that it has built the main motorsport series in the United States since its founding in 1948. The organization hopes to demonstrate that its success is due to hard work and investments made over the years. NASCAR’s statement also indicates that they respect the Court’s decision, but believe it is legally flawed and will address it at trial and, if necessary, in the Fourth Circuit. NASCAR defends the statute system and will continue to defend it. Most of the organizations that did sign the new charter agreements submitted statements in support of the system and requested an agreement. The teams want the charters to be permanent, something NASCAR has not conceded during negotiations.

If an agreement isn’t reached before the trial and NASCAR loses, the entire charter system could be dismantled or revised. Teams are frustrated by this threat, and it is understood that NASCAR has agreed to make the charters permanent, but the point of conflict in the negotiations is the amount of money that 23XI and Front Row are demanding in damages and legal fees.

Teams fear a defeat could dismantle NASCAR’s structure and are upset by the monetary demands of 23XI and Front Row. Last week, Judge Bell also issued another victory for 23XI and Front Row by dismissing NASCAR’s counterclaim against Curtis Polk, Jordan’s business manager and one of the owners of 23XI.