NASCAR Responds to Michael Jordan and 23XI Racing’s Lawsuit
In a recent court filing, NASCAR argued that the lawsuit filed by Michael Jordan seeks to obtain a permanent franchise, a privilege that no other team possesses. Furthermore, the racing series maintains that neither 23XI Racing nor Front Row Motorsports have suffered damages by competing as “open” teams. NASCAR also revealed in its 34-page response that there are interested buyers for the six franchises that have been reserved, pending a federal judge’s decision on whether the two teams can recover them for the remaining 11 races of this season. The organization is prepared to immediately begin the process of reassigning said franchises. These arguments are part of the antitrust lawsuit filed by 23XI and Front Row against NASCAR, in a dispute over franchises, which are essentially franchise tags. 23XI, owned by Basketball Hall of Famer Michael Jordan and three-time Daytona 500 winner Denny Hamlin, and Front Row, owned by businessman Bob Jenkins, were the only two organizations out of 15 that did not sign extensions on the new franchise agreements. All the teams fought for the franchises to be permanent for more than two years of extension negotiations, but NASCAR refused and its final offer was until 2031. 23XI and Front Row obtained a temporary injunction to be recognized as franchisees while the case heads to a trial date on December 1st. The injunction was finally revoked, appealed by the teams, and U.S. District Judge Kenneth Bell will hear arguments on August 28 regarding the matter. 23XI and Front Row, as “open” teams, do not receive the same financial percentages as franchised teams. In the presentation, NASCAR requested that 23XI and Front Row return all the money they were paid when they were recognized as franchised teams this season. NASCAR said the money would be redistributed to the current 30 franchised teams. A rule change in July, after the two organizations had their franchise status revoked, guaranteed that the six cars would not risk failing to qualify for a race; starting positions are guaranteed to the 36 franchised cars on each 40-car grid.23XI and Front Row have maintained that they will continue to compete even if they have to do so as open teams. NASCAR has argued that when the two organizations did not sign the extensions they lost all rights to the franchises and the sanctioning body should be free to move them. “The plaintiffs’ theoretical inability to obtain franchises after the trial also does not justify NASCAR selling or transferring franchises, because the plaintiffs do not have franchises now due to their own strategic choice,” NASCAR said in its filing. “The plaintiffs had multiple opportunities to acquire franchises for 2025, and they squandered them.” NASCAR also argued that a court cannot order the private company to partner with teams it is not interested in doing business with. Another argument from NASCAR is that 23XI and Front Row have not been harmed by not being franchised because their drivers have not left the team and the rule change protects them from missing races; Tyler Reddick, from 23XI, has clauses in his contract that allow him to leave if his car is not franchised. In addition, NASCAR stated that it pays teams a higher percentage than even Formula 1 and that its team payment structure demonstrates that it is not a monopoly, as it first increased by 28% in the 2016 franchise agreement and then by 62% in the 2025 agreement. “NASCAR pays teams more than even Formula 1 as a percentage of the winnings,” NASCAR said. “The plaintiffs ignore the salary increases that the teams received. Instead, they focus on a text during the 2025 franchise negotiations that said that an internal version of the May 2024 draft contained ‘zero wins’ for the teams. “The plaintiffs are unaware that the actual May 2024 draft proposed to the teams carried forward the biggest win for the teams – a massive increase in payments – that was established in the December 2023 draft. It also gave franchise holders the opportunity to obtain any improved extension terms that NASCAR offered to third parties and increased the teams’ ability to receive funding from investors, among other benefits.”“Mr. Jordan has said he wants to use litigation to obtain a permanent franchise that no other team has,” NASCAR alleged.
