The world of motorsports is preparing for a high-octane legal showdown. The legal battle between NASCAR, Michael Jordan and his racing team, 23XI Racing, along with Front Row Motorsports, promises to reshape the landscape of stock car racing. The antitrust lawsuit, which is being decided in the courts, could alter the business model of the Cup series.
Who are the contenders?
The lawsuit, filed in October 2024, accuses NASCAR of employing monopolistic practices that restrict the income and independence of the teams. 23XI Racing, with a five-year history, fields drivers Bubba Wallace, Tyler Reddick, and Riley Herbst. This team is co-owned by Denny Hamlin, a member of the NASCAR Hall of Fame, along with NBA legend Michael Jordan, and his business partner Curtis Polk.
“I did it for the smaller teams too. It’s not just me. I think everyone should have the opportunity to succeed in any business. My voice says that hasn’t been happening.”
Michael Jordan
Front Row Motorsports, led by Bob Jenkins, has participated in the Cup Series since 2005 and currently has drivers Noah Gragson, Todd Gilliland, and Zane Smith.
NASCAR, founded in 1948 by Bill France, has been run by the France family for generations, and is currently led by Jim France, Lesa France Kennedy, Steve Phelps, and Steve O’Donnell.
What is the lawsuit about?
23XI and Front Row allege that NASCAR’s current practices prevent teams from reaching their full potential. They argue that the Next Gen car, launched in 2022, has limited creativity and performance by requiring the purchase of parts from NASCAR-approved suppliers. In addition, they criticize NASCAR’s control over most circuits and contractual agreements that limit the growth of other motorsports.
The essence of the dispute lies in NASCAR’s franchise system, where 23XI and Front Row consider the distribution of income and the limitation of value potential unfair. The franchise system, introduced in 2016, grants franchises to teams, guaranteeing starting spots and a portion of the prize money. Teams can sell or lease these franchises.
NASCAR defends the franchise system, pointing to the increase in the value of the franchises. However, 23XI and Front Row seek “perpetual” franchises, which are automatically renewed, something that NASCAR has not granted.The breaking point for 23XI and Front Row was the inability to secure permanent franchises. Pre-trial documents revealed financial information from NASCAR and its teams. Franchised teams receive a base of around $185,000 per event, with an average income of around $330,000 per race. The total payment to the teams in 2025 was $431 million, an increase of $333 million in 2024.
Car revenue varied from $43 million to $8.2 million. Only three teams in 2024 reported profits, and overall owners lost an average of $2.2 million per car. The documents also revealed the finances of 23XI, showing an increase in revenue from $27.8 million to $62.2 million from 2021 to 2024, although with a loss of $2.1 million in 2024. Front Row, since the start of the franchise system, has operated at a loss.
In 2024, NASCAR’s net revenue was $103 million. Steve Phelps emphasized that most of the earnings are reinvested in the sport and the teams.
The Lawyers Behind the Battle
Jeffrey Kessler, known for representing athletes, leads the defense for 23XI and Front Row, while Chris Yates, with experience in sports litigation, represents NASCAR. These lawyers, with a long history in antitrust litigation, promise a major legal showdown.
How long will this last?
The initial trial is scheduled for 21 days, but appeals are expected, which could extend the legal battle until 2026 and beyond.
How tense will the situation be?
The rivalry between Kessler and Yates already ensures high tension. Furthermore, the close-knit world of NASCAR, where teams coexist weekly and reside in the same metropolitan area, adds complexity. Denny Hamlin, co-owner of 23XI, is an example of this dynamic, participating in the sport while being involved in a lawsuit.
Documents revealed, including text message transcripts, have exposed internal tensions, although they will not be used in the trial, have damaged the public image. Phelps acknowledged the existence of statements they would have preferred not to have made, but emphasized the resilience of the sport.
What is the ultimate goal for each part?
The 23XI and Front Row lawsuit seeks damages, fair competition, and more transparency from NASCAR. The debate centers on franchises versus money, with the outcome of the trial potentially affecting the existence of 23XI and altering NASCAR’s business structure.
If 23XI and Front Row win, they could receive financial compensation, but not the franchises. If they choose to obtain franchises, they could forgo compensation. If NASCAR wins, 23XI could disappear. The outcome of this trial will mark a before and after in the world of stock car racing.
Phelps stated that NASCAR will defend the franchise system. Hamlin expressed that he believes both sides are confident in their case and that the outcome will be momentous.
