Federal Judge Dismisses NASCAR’s Counterclaim Against 23XI Racing and Front Row Motorsports
A federal judge ruled in favor of 23XI Racing and Front Row Motorsports, dismissing NASCAR’s counterclaim in a legal dispute related to allegations of anti-competitive practices. United States District Judge Kenneth Bell issued a summary judgment in favor of the race teams, rejecting NASCAR’s claim that Curtis Polk, co-owner of 23XI, had illegally conspired with other teams during negotiations to obtain new licenses. 23XI, also owned by NBA Hall of Famer Michael Jordan and three-time Daytona 500 winner Denny Hamlin, was involved in this situation. Polk, who has been Jordan’s business manager for a long time, was part of a negotiating team that collaborated with NASCAR for more than two years on the licensing agreement, signed by 13 of the 15 organizations in 2023. NASCAR argued in its counterclaim that a 2023 boycott of the team owners council meeting negatively affected media rights negotiations. The organization also alleged that the unification of the 15 organizations for licensing 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” because 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 resulted in changes to the licensing agreement. Furthermore, as all licensing agreements would be the same for all teams, the teams’ collaboration in the negotiations was deemed reasonable.Judge 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.” Despite two days of mediation last week, this legal dispute was not resolved, and the trial is still scheduled for 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 license guarantees revenue and access to weekly races, and without them, both teams claim they would likely have to close.“The evidence here establishes that not only were individual negotiations ‘available,’ but NASCAR conducted such negotiations regularly during the negotiation period,” Bell wrote in his order. “And those individual negotiations achieved concrete results, including the final 2025 licensing agreement that was signed by 13 teams acting individually (and contrary to the supposed ‘joint agreement’)”.
Judge Kenneth Bell
NASCAR said in a statement that it is still hoping 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 Championship weekend and continue to grow the sport. If a resolution is not reached, we intend to appeal the decision in due course.”“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
