Federal Judge Dismisses NASCAR Counterclaim Against Suing Teams
A federal judge made a significant decision this Tuesday by dismissing the counterclaim filed by NASCAR against two teams that sued it 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, illegally conspired with other teams during negotiations to obtain new licenses. 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 longtime business manager. NASCAR argued in its counterclaim that a 2023 boycott of the meeting of the team owners council negatively impacted its media rights negotiations. In addition, it alleged that the unification of the 15 organizations for the licensing talks allowed the teams to obtain a better deal than they would have achieved by negotiating individually with NASCAR.The judge also determined that 23XI and FRM did not participate in an “unreasonable restraint of trade.” This was based on the fact that NASCAR’s individual meetings with the teams did result in some changes to the licensing agreement. Furthermore, all licensing agreements would be the same for all teams, which justified the teams’ collaboration in the negotiations. Bell wrote in his order: “The evidence here establishes that not only were individual negotiations available, but NASCAR regularly maintained them during the negotiation period. And those individual negotiations achieved concrete results, including the final 2025 license agreement that was signed by 13 teams acting individually (and against the supposed ‘joint agreement’)”. Bell must also rule on two other summary judgment motions: one filed by NASCAR seeking a ruling in its favor and another by 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 on December 1 in North Carolina. 23XI and FRM are the only two organizations out of 15 that refused to sign license extensions, which are fundamental to NASCAR’s business model. A licensed car is guaranteed revenue and access to weekly races, and without them both teams claim they would almost certainly go bankrupt.Bell considered the boycott a negotiation tactic “that seemed to have little impact” because NASCAR initiated individual negotiations shortly thereafter.
Judge Kenneth Bell
NASCAR indicated 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.“Today’s decision has only reaffirmed my clients’ unwavering pursuit of a fairer and more equitable sport,” said Jeffrey Kessler, attorney for 23XI/FRM. “Their determination remains firm as we continue our efforts to achieve a resolution that benefits everyone: teams, drivers, employees, partners, and fans.”
Jeffrey Kessler, attorney for 23XI/FRM
“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 is not reached, we intend to appeal the decision in due course.”
NASCAR
