Key Legal Victory for 23XI Racing and Front Row Motorsports in Antitrust Lawsuit Against NASCAR
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 by 23XI Racing and Front Row Motorsports. U.S. 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 and that NASCAR’s argument that teams can compete in other series is moot.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.” The argument 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 a substitute equal to NASCAR. NASCAR, in a countersuit, said the teams illegally conspired by joining together to negotiate 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 NASCAR Cup Series races in the United States and anywhere else 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 party is complaining,” Bell wrote. “Simply put, 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 break without them and are competing this season without a franchise, which entails a significant reduction in prize money. Other teams have requested an agreement to move forward, but mediation sessions and private negotiations have not worked. The trial is scheduled for December 1st.NASCAR is trying with all its might to resolve the federal antitrust lawsuit.
Steve Phelps, NASCAR Commissioner
NASCAR, in its own statement, promoted the commitment it has demonstrated in building NASCAR as the leading motorsport series in the United States since its founding in 1948. The organization hopes to prove that it became the leading motorsport in the United States through hard work, risk-taking, and many significant investments over the past 77 years. The case is scheduled for trial on December 1st.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 that power 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 representing 23XI and Front Row
