Denny Hamlin and the Future of NASCAR: A Trial Shaking the World of Motorsports
The anticipated antitrust trial against NASCAR, which began this Monday, has generated great expectation in the world of motorsports. Denny Hamlin, three-time Daytona 500 winner and co-owner of 23XI Racing alongside Michael Jordan, was the first witness in a case that could redefine the structure of the prestigious auto racing series. The lawsuit filed by 23XI Racing and Front Row Motorsports accuses NASCAR of monopolistic practices, arguing that the rules and funding imposed on the teams are unfair and restrictive. The presence of Michael Jordan in the courtroom has added an element of additional interest to the case. The trial could redefine the structure of the prestigious auto racing series. Hamlin, visibly emotional, broke down in tears during his testimony as he recalled his beginnings in motorsports and the difficulties he faced. He revealed that the decision to enter the world of racing was crucial in his youth. In addition, he highlighted the importance of his partnership with Michael Jordan, stating that without him, the success of 23XI Racing would be unattainable. Hamlin’s testimony sought to illustrate the challenges faced by both team owners and drivers in the elite sport. According to Hamlin, the partnership with Jordan was fundamental to the success of 23XI, which has managed to generate profits in all but one of its seasons. Hamlin’s lawyer, Jeffrey Kessler, pointed out that Bob Jenkins’ team, Front Row, has not made a profit since its inception in 2004. In addition, he highlighted a study commissioned by NASCAR that reveals that 75% of the teams suffered losses in 2024. It is estimated that in a three-year period, almost $400 million was paid to the France Family Trust. In the center of the dispute is NASCAR’s revenue sharing model, which 23XI and Front Row consider unfavorable for the teams, who often operate at a loss. Hamlin testified that the cost of bringing a single car to the track during a 38-race season amounts to $20 million, not including operating expenses. The charter agreement signed for this year, which originated the lawsuit, guarantees teams $12.5 million in annual revenue per automobile with a charter. NASCAR argues that this represents an increase from the $9 million of the previous agreement. However, Hamlin pointed out that 11 of the first 19 teams with a charter are no longer in operation. Hamlin revealed that 23XI acquired its three charters from teams that ceased operations, paying $4.7 million for the first, $13.5 million for the second, and $28 million for the third, acquired late last year. He acknowledged that the purchase of the third charter was risky due to ongoing litigation, but necessary to consolidate 23XI as a top-tier team.The charter system ensures a place in each race and a percentage of the earnings, as well as providing team owners with an asset to sell if they wish to retire from the business. NASCAR lawyers argue that this system has generated $1.5 billion in capital for the 36 chartered teams. Before this system, teams raced “open”, without a guarantee of participating or receiving income.
The case has been the subject of hearings and debates for over a year, despite attempts by other NASCAR teams to reach an agreement. A victory for NASCAR could mean the disappearance of 23XI, Front Row and their combined six cars, while a victory for the teams could result in monetary damages and a significant restructuring of NASCAR. The presence of Michael Jordan in the courtroom was a significant factor, with several jury candidates dismissed due to their bias. Among the NASCAR executives present were Jim France and Lesa France Kennedy, members of the founding family of NASCAR. Hamlin will resume his testimony on Tuesday morning. NASCAR commissioner Steve Phelps, 23XI minority owner Curtis Polk, and other senior executives had to leave the courtroom after the initial arguments, as they are potential witnesses.
