NASCAR Loses: Judge Dismisses Counterclaim in Teams’ Antitrust Lawsuit

Federal Judge Dismisses NASCAR Counterclaim in Legal Dispute with Teams

A federal judge made a groundbreaking decision on Tuesday by dismissing the counterclaim filed by NASCAR against two teams that had initiated a lawsuit over allegations of anti-competitive practices. United States District Judge Kenneth Bell issued a summary judgment in favor of 23XI Racing and Front Row Motorsports, invalidating NASCAR’s claim that Curtis Polk, co-owner of 23XI, had illegally conspired with other teams during negotiations for new bylaws. 23XI is owned, among others, by Michael Jordan, a member of the NBA Hall of Fame, and Denny Hamlin, a three-time Daytona 500 winner. Polk, in turn, has been Jordan’s long-time business manager. In addition, Polk was part of a four-member negotiating team that collaborated with NASCAR for more than two years on the charter 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 impacted its media rights negotiations, and that the unification of the 15 organizations for the charter talks allowed the teams to obtain a better deal than they would have achieved by negotiating individually with NASCAR. Judge Bell determined that the boycott was a negotiation tactic “that seemed to have little impact” given that NASCAR initiated individual negotiations shortly thereafter. Bell also concluded that 23XI and FRM did not participate in an “unreasonable restraint of trade,” as NASCAR’s individual meetings with the teams did result in some changes to the charter agreement, and given that all charter agreements would be the same for all teams, the teams’ collaboration in the negotiations would be reasonable.

“The evidence here establishes that not only were individual negotiations ‘available,’ but NASCAR had such negotiations regularly during the negotiation period,” Bell wrote in his order. “And, those individual negotiations achieved concrete results, including the final 2025 charter agreement that was signed by 13 teams acting individually (and contrary to the supposed ‘joint agreement’)”.

Judge Kenneth Bell

Judge Bell must also rule on two other summary judgment motions: one from NASCAR seeking a ruling in its favor and another from 23XI and FRM to designate the market as “premier stock-car racing.” Two days of mediation last week failed to end this dispute and the case is still scheduled for a trial date of December 1 in North Carolina. 23XI and FRM are the only two organizations out of 15 that refused to sign extensions to the charters, which are fundamental to NASCAR’s business model. A car with a charter is guaranteed income and access to weekly races, and without them both teams claim they will almost certainly go bankrupt.

“Today’s decision has only reaffirmed my clients’ unwavering pursuit of a fairer and more equitable sport,” said Jeffrey Kessler, attorney for 23XI/FRM, in a statement. “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

NASCAR said in its statement that it still hopes to reach an agreement. The season concludes with Sunday’s championship final in Phoenix and Hamlin is one of the four drivers eligible for the Cup title. “We respect the Court’s decision, although we respectfully disagree with its legal reasoning,” NASCAR said. “Our priority remains to resolve this matter quickly so that all parties can focus on Championship weekend and continue to grow the sport.” “If a resolution cannot be reached, we intend to appeal the decision at the appropriate time.”