NASCAR Vows Not to Reallocate Charters Amid Legal Battle
In the midst of a legal dispute, NASCAR has assured a federal court that it will not redistribute any of its licenses, known as “charters,” until the antitrust trial filed by two racing teams concludes. One of them is owned by Michael Jordan. The presentation on Friday in the Western District of North Carolina comes one day after a heated hearing. In it, 23XI Racing and Front Row Motorsports argued for a preliminary injunction to have six charters restored to them until the jury trial, scheduled for December 1st. A charter is the equivalent of a franchise in other sports. 23XI and FRM refused to sign the agreements last September, and instead sued NASCAR, accusing the motorsports series, owned and operated by the France family, of harassment and monopolizing the stock car racing market. U.S. District Judge Kenneth Bell repeatedly questioned NASCAR about why it couldn’t sell one of the four “open” charters to an interested buyer, or devise a contingency plan that would leave room to return the charters to 23XI and FRM if NASCAR loses at trial. Originally, the four “open” charters are reserved for any potential new manufacturer entering the sport. With six from the two teams demanding, there are technically 10 “open” charters at this time. 23XI, owned by Basketball Hall of Famer Michael Jordan and three-time Daytona 500 winner Denny Hamlin, and Front Row, owned by businessman Bob Jenkins, are seeking to be recognized as charter holders for 2025. This would grant them significantly higher payments compared to what they receive as “open” teams. Bell indicated that he would issue his ruling on the court order next week, although NASCAR’s presentation on Friday calms the urgency a bit. The France family promised not to sell the charters, a measure that the teams claim would put them out of business. NASCAR stated that its commitment was voluntary and was made due to “NASCAR’s desire to focus on both the growth of the sport for the 2026 Cup season and preparation for the trial.” In the presentation, NASCAR stated that it will not “issue, sell, transfer, or lease any additional Charter for the 2025 Cup season”, a statement that covers the six charters. NASCAR also said that “it will not issue, sell, transfer, or lease more than four additional Charters for the 2026 Cup season.” Jeffrey Kessler, lawyer for 23XI and FRM, considered NASCAR’s promise not to sell the charters to be debatable and announced that they will respond to the filing next Tuesday. “The plaintiffs also do not agree that the defendants’ notice and representations demonstrate that the plaintiffs do not face irreparable harm,” he said. NASCAR’s suspension of any potential sale of charters does not technically prevent Bell from issuing the preliminary injunction to the teams, who are trying to demonstrate the irreparable harm they will face if they do not have charters. 23XI driver Tyler Reddick has a clause in his contract stipulating that he can leave the team if his car does not have a charter, and Kessler indicated in court on Thursday that both Reddick and sponsors have notified them that they are currently in breach. Thursday’s hearing revealed how tense the situation between NASCAR and the two teams has become, through the disclosure of emails and text messages with explicit language from Jordan and other high-profile plaintiffs.Of the 15 organizations with charters in NASCAR, only 23XI and FRM refused to sign the charter extensions. Many teams have expressed that they felt cornered by NASCAR’s final offer, which came with a deadline and the threat of revoking the charters if they didn’t sign within a day.
The teams used text messages and emails to try to demonstrate how NASCAR imposed itself in a final charter agreement. One, from commissioner Steve Phelps, said: “Give them the charters, pick a date and they can sign or they can lose their charters: it’s that simple.” Scott Prime, Vice President of Strategic Development, wrote: “We have all the leverage and the teams will almost have to sign the terms of the charter we present to them.” Jordan and 23XI did not sign, and Jenkins and Front Row joined the NBA legend in the lawsuit. Jordan stated out of court on Thursday that he had been open to a settlement, but that he is willing to let the case go to a jury trial. The playoffs begin Sunday at Darlington Raceway in South Carolina and among the drivers in the 16-driver playoff field are 23XI’s Reddick and Bubba Wallace and Hamlin, who races for Joe Gibbs Racing. All three stated that they believe they can fairly compete for the Cup title while the lawsuit is ongoing.
