NASCAR Loses: Judge Dismisses Lawsuit Against 23XI and FRM Teams

Federal Judge Dismisses NASCAR Counterclaim Against Suing Teams

A federal judge made a relevant decision on Tuesday, dismissing the counterclaim filed by NASCAR against two teams that had filed a lawsuit for allegations of anti-competitive practices. United States District Judge Kenneth Bell issued a summary judgment in favor of 23XI Racing and Front Row Motorsports, dismissing NASCAR’s claim that Curtis Polk, co-owner of 23XI, had illegally conspired with other teams during negotiations to obtain new franchise agreements. 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 has been Jordan’s business manager for a long time. Polk was also part of a four-member negotiating team that collaborated with NASCAR for more than two years on the franchise 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 by joining the 15 organizations for franchise talks, the teams obtained a better deal than they would have gotten if NASCAR had negotiated with them separately.

Bell considered the boycott a negotiation tactic “that seemed to have little impact” because NASCAR began individual negotiations shortly after.

Judge Kenneth Bell

Bell also determined that 23XI and FRM did not participate in an “unreasonable restraint of trade” because NASCAR’s individual meetings with the teams did result in some changes to the franchise agreement, and because all franchise agreements would be the same among all teams, that the teams working together in 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 franchise agreement that was signed by 13 teams acting individually (and contrary to the supposed ‘joint agreement’)”. Bell must also rule on two other motions for summary judgment, 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 on the franchises, which are the core of NASCAR’s business model. A franchised car has guaranteed revenue and access to weekly races, and without them, both teams say they would surely 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 resolving this matter quickly so that all parties can focus on the championship weekend and continue to grow the sport.

NASCAR

“If a resolution is not reached, we intend to appeal the decision at the appropriate time.”