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, exerting pressure to reach a settlement. United States District Judge Kenneth Bell ruled in favor of 23XI Racing, owned by Jordan and Denny Hamlin, along with Front Row Motorsports, owned by Bob Jenkins, in an argument 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. The NASCAR series is “doing everything possible” to resolve the federal antitrust lawsuit. 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, different from Formula 1, IndyCar, and other lower levels of stock car racing. NASCAR, in a counterclaim, alleged that the teams illegally conspired in the negotiations of new charter agreements, but Bell found that NASCAR deliberately, clearly, and unequivocally alleged that the relevant market is “the market for the entry of cars in 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. The new charter agreements were presented to the teams at the start of the 2024 playoffs, with a deadline for signing. This followed 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 would likely break without them and are competing this season without statutes, which entails a significant reduction in prizes. Other teams have asked for an agreement to move forward, but mediation sessions and private negotiations have not worked. The trial is scheduled for December 1st.NASCAR, in its own statement, highlighted its commitment to making NASCAR the leading motorsports series in the United States since its founding in 1948.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. 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.
Jeffrey Kessler, attorney for 23XI and Front Row
Most of the organizations that did sign the new charter agreements last year filed statements with the court in support of the charter system and calling for a settlement in the case. All teams want the charters to be permanent, something NASCAR did not concede during the negotiations of the current agreement.
If an agreement is not reached before the trial and NASCAR loses, the entire system of charters risks being dismantled or revised. The teams are frustrated by that threat, and it is understood that NASCAR has agreed to make the charters permanent, and the problem in the 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 dismantled by a loss and are upset because it would be due to the monetary demands made by 23XI and Front Row. 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 23XI owners.
