NASCAR Seeks Legal Solution in Dispute with 23XI Racing and Front Row Motorsports
In an unexpected turn, NASCAR has requested a judicial conciliation conference from a federal court to mediate the antitrust lawsuit filed by 23XI Racing, owned by Michael Jordan, and Front Row Motorsports. NASCAR’s request seeks the intervention of an independent judge to facilitate negotiations between the parties involved. In response, the 23XI Racing and Front Row Motorsports teams have expressed their desire to continue working with the current mediator, Jeffrey Mishkin, former Executive Vice President and General Counsel of the NBA, who has been negotiating between the parties for the past year.The teams argue that Mishkin possesses “significant experience in complex antitrust disputes related to sports” and has acted as an arbitrator or mediator in major international sports organizations. Furthermore, the teams indicate that starting over with a new mediator is “less likely, not more likely, to lead to a resolution”. These opposing motions come as NASCAR seeks a summary judgment to dismiss the case before the scheduled start of the trial on December 1. The hearing on that motion is scheduled for October 21. The conflict centers on the protection of NASCAR’s franchise system, known as “charter”, which is fundamental to its business model and the central point of the legal dispute. The charter system guarantees owners places in the competition and a base amount of annual income, which, according to NASCAR, has generated more than $1.5 billion in capital value for its teams since 2016. A year ago, 13 of the 15 teams signed new agreements, believing that negotiations of more than two years would not lead to a better deal. 23XI, co-owned by Michael Jordan and Denny Hamlin, and Front Row Motorsports, owned by Bob Jenkins, chose to go to court. For months, the other 13 teams have privately expressed their concern about the uncertainty that the lawsuit is generating about the future of NASCAR. Mishkin has not made progress toward an agreement, and NASCAR is now seeking for a different federal judge than U.S. District Judge Kenneth Bell, who is presiding over the case, to hear both parties and advise on a resolution. Last week, most NASCAR teams filed statements requesting an agreement and the protection of the charter system, which NASCAR highlighted in its presentation on Monday night before the U.S. District Court for the Western District of North Carolina.Mr. Mishkin has invested a great deal of time learning about this case and meeting with the parties. The plaintiffs have requested that NASCAR continue to interact with them through Mr. Mishkin or make a settlement offer directly to the plaintiffs’ attorneys, but NASCAR has not responded to those requests and, instead, filed this motion.
23XI Racing and Front Row Motorsports
Although both parties have shown a willingness to dialogue, no progress has been made. NASCAR hopes that, through a judicial conciliation conference, a judge can direct the conversations and offer a perspective on how a jury might interpret NASCAR’s complex antitrust case. The NASCAR request must be approved by the court. All parties, including Michael Jordan, have expressed their willingness to reach an agreement, although Jordan has also expressed his willingness to take the case to trial if necessary.The willingness of the parties to resolve this matter, along with the interests of others in the sport and the Tribunal in seeing this case resolved, suggest that a judicial conciliation conference would be a meaningful way to facilitate a settlement.
NASCAR
I hope to go all the way. If I have to fight for this until the end, for the good of the sport, I will. We have always been open to an agreement. We always have been. We have never ruled it out.
Michael Jordan
