Federal Judge Dismisses NASCAR Counterclaim in Legal Dispute with Teams
A federal judge ruled in favor of 23XI Racing and Front Row Motorsports, dismissing the counterclaim filed by NASCAR in the context of a legal dispute over allegations of anti-competitive practices. Judge Kenneth Bell issued a summary judgment in favor of the teams, rejecting NASCAR’s claim that Curtis Polk, co-owner of 23XI, had illegally conspired with other teams during negotiations to obtain new licenses. 23XI, also owned by NBA legend Michael Jordan and three-time Daytona 500 winner Denny Hamlin, was involved in this situation. Polk, who is also Jordan’s business manager, was part of a negotiating team that collaborated with NASCAR for more than two years on the licensing agreement signed by 13 of the 15 organizations last year. NASCAR argued in its counterclaim that a 2023 boycott of the meeting of the team owners council negatively affected media rights negotiations and that the union of the 15 organizations for licensing talks provided them with a better deal than they would have obtained if NASCAR had negotiated with each team separately.Judge Bell also determined that 23XI and FRM did not participate in an “unreasonable restraint of trade,” as NASCAR’s individual meetings with the teams resulted in some changes to the licensing agreement. Furthermore, he considered it reasonable for the teams to work together in the negotiations, as all licensing agreements would be the same for all teams. Bell stated that individual negotiations were available and that NASCAR conducted them regularly during the negotiation period, achieving concrete results, including the final licensing agreement for 2025 signed by 13 teams acting individually. Judge Bell must also rule on two other summary judgment motions: one filed by NASCAR seeking a ruling in its favor and another by 23XI and FRM to designate the market as “premier stock-car racing.” Despite two days of mediation last week, this dispute was not resolved, and the trial is still scheduled for December 1 in North Carolina. 23XI and FRM are the only two organizations out of 15 that refused to sign license extensions, which are fundamental to NASCAR’s business model. A licensed car is guaranteed income and access to weekly races, and without them, both teams claim they would surely go bankrupt.The boycott was a negotiation tactic “that seemed to have little impact” as NASCAR initiated individual negotiations shortly thereafter.
Judge Kenneth Bell
NASCAR indicated that it is still hoping to reach an agreement. The season concludes with the championship final on Sunday in Phoenix, and Hamlin is one of the four drivers eligible for the Cup title.Today’s decision has reaffirmed my clients’ unwavering pursuit of a fairer and more equitable sport. Their determination remains strong as we continue our efforts to achieve a resolution that benefits everyone: teams, drivers, employees, partners, and fans.
Jeffrey Kessler, attorney for 23XI/FRM
In the event a resolution is not reached, NASCAR intends to appeal the decision at the appropriate time.We respect the Court’s decision, although we do not agree with its legal reasoning. Our priority remains to resolve this matter quickly so that all parties can focus on Championship weekend and continuing to grow the sport.
NASCAR Statement
