NASCAR Vows Not to Reallocate Charters Amid Legal Battle
In a move aimed at calming the waters amid a legal dispute, NASCAR has assured a federal court that it will not redistribute any of its charters until the antitrust trial filed by two racing teams concludes. One of these teams is owned by basketball legend Michael Jordan. The announcement, made on Friday before the U.S. District Court for the Western District of North Carolina, comes after a tense hearing in which 23XI Racing and Front Row Motorsports requested a preliminary injunction to have six charters restored to them until the jury trial, scheduled for December 1st. NASCAR had indicated in multiple documents its intention to immediately redistribute the charters, even mentioning an interested party with whom it could negotiate. A charter is similar to a franchise in other sports, and 23XI and FRM refused to sign the agreements last September, accusing NASCAR, owned by the France family, of monopolistic behavior. District Judge Kenneth Bell repeatedly asked NASCAR why it couldn’t sell one of the four “open” charters to an interested buyer or devise a plan to return the charters to 23XI and FRM if NASCAR lost the trial. The four original “open” charters are reserved for any new manufacturer wishing to enter the sport. With the six from the two plaintiff teams, there are currently 10 “open” charters. 23XI, owned by Jordan and Denny Hamlin, and Front Row, owned by Bob Jenkins, are seeking to be recognized as charter holders for 2025, which would allow them to receive higher payments. Judge Bell announced that he will issue his ruling on the injunction next week, although NASCAR’s presentation on Friday reduces the urgency by the France family’s promise not to sell the charters, an action that, according to the teams, would put them out of business.In the presentation, NASCAR stated that it will not “issue, sell, transfer, or lease any additional charter for the 2025 Cup season”, thus covering the six disputed charters. In addition, NASCAR stated 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, believes NASCAR’s promise not to sell the charters is debatable and will respond to the filing next Tuesday.NASCAR said its commitment was voluntary and was made out of “NASCAR’s desire to focus on the growth of the sport for the 2026 Cup season and to prepare for trial.”
The suspension of charter sales by NASCAR does not prevent Judge Bell from issuing the injunction requested by the teams, who seek to demonstrate the irreparable damage they would suffer if they do not have charters. 23XI driver Tyler Reddick has a clause in his contract that allows him to leave the team if his car does not have a charter, and Kessler indicated in court that both Reddick and the sponsors have notified them that they are currently in breach of the agreement. The hearing revealed the growing tension between NASCAR and the two teams, with the disclosure of emails and text messages containing offensive language from Jordan and other high-profile plaintiffs.“Plaintiffs also do not agree that the defendants’ notice and statements demonstrate that the plaintiffs do not face irreparable harm,” he stated.
Of the 15 organizations with charters in NASCAR, only 23XI and FRM refused to sign the charter extensions. Many teams felt they were pressured by NASCAR’s final offer, which included a deadline and the threat of revoking the charters if they were not signed within a day.
The teams used texts and emails to demonstrate how NASCAR imposed a final charter agreement. One of them, from commissioner Steve Phelps, said: “Give them the charters, choose a date and they can sign or 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 any charter terms 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 that he was open to a settlement, but 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 despite the ongoing lawsuit.
