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 of which is owned by Michael Jordan, increasing pressure on NASCAR to resolve the antitrust lawsuit filed against it by 23XI Racing and Front Row Motorsports. United States District Judge Kenneth Bell ruled in favor of 23XI, owned by Jordan and three-time Daytona 500 winner Denny Hamlin, 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, dismissing NASCAR’s argument that teams can compete in other series.The teams argued that the relevant market for top-tier stock car racing teams is that “NASCAR’s 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 other types of motorsports such as Formula 1 and IndyCar, as well as all lower levels of stock car racing, are not an equivalent substitute for NASCAR. NASCAR, in a counterclaim, asserted that the teams illegally conspired to join in negotiations over new franchise agreements, but Bell determined that NASCAR alleged “deliberately, clearly and unequivocally” that the relevant market is “the market for the entry of cars in the NASCAR Cup Series races in the United States and any other location where a Cup Series race is held”. “The same transaction, the sale and purchase of top-tier stock car racing services, cannot be a different relevant market depending solely on which side is complaining,” Bell wrote. “In short, NASCAR made a strategic decision in asserting its counterclaim and must now live with the consequences.” The lawsuit was filed a year ago by 23XI Racing and Front Row Racing, when they were the only two organizations out of 15 that did not sign extensions to the new franchise agreements. The new franchise agreements were presented to the teams at the start of the 2024 playoffs with a deadline for them to sign. This followed more than two years of tense negotiations over the franchises, which are the core of NASCAR’s business model, as they guarantee revenue and access to weekly races. 23XI and Front Row would likely go bankrupt without them and are competing this season without a franchise, which entails a significant reduction in prize money. The trial is scheduled for December 1st. Jeffrey Kessler, the lawyer representing 23XI and Front Row, stated: “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 has used it to harm the teams. We are prepared to present our case to the jury and are focused on obtaining a verdict that benefits all teams, partners, drivers, and fans.” NASCAR issued a statement highlighting its commitment to making NASCAR the premier motorsports series in the United States since its founding in 1948. NASCAR added: “NASCAR looks forward to demonstrating that it became the leading motorsports sport in the United States through hard work, risk-taking, and many significant investments over the past 77 years. Antitrust laws encourage this, and NASCAR has done nothing anticompetitive in building the sport from the ground up since 1948.” The organization continued: “While we respect the Court’s decision, we believe it is legally flawed and will address it at trial and in the Fourth Circuit if necessary. NASCAR believes in the franchise system and will continue to defend it from efforts by 23XI and Front Row to assert that the franchise system itself is anticompetitive.” Last week, Bell issued another victory for 23XI and Front Row by dismissing NASCAR’s counterclaim against Curtis Polk, Jordan’s longtime business manager and one of the owners of 23XI.NASCAR is trying with all its might to resolve the federal antitrust lawsuit.
Steve Phelps, NASCAR Commissioner
