NASCAR Responds to Lawsuit from Michael Jordan and 23XI Racing
In a recent court filing, NASCAR has argued that Michael Jordan’s lawsuit seeks to obtain a permanent charter, a privilege that no other team possesses. Furthermore, the stock car racing series maintains that neither 23XI Racing nor Front Row Motorsports have suffered significant damages by competing as “open” teams. NASCAR also revealed in its 34-page response, filed on Monday, that there are interested buyers for the six charters that have been reserved while a federal judge decides whether the two teams can recover them for the remaining 11 races of this season. NASCAR is prepared to immediately begin the process of assigning these charters to other teams. These arguments are part of the antitrust lawsuit filed by 23XI and Front Row against NASCAR, in a dispute over charters, which function as franchise tags. 23XI, owned by Michael Jordan and Denny Hamlin, and Front Row, owned by Bob Jenkins, were the only two organizations out of 15 that did not sign extensions to the new charter agreements. All teams fought to make the charters permanent during more than two years of extension negotiations, but NASCAR refused and its final offer was until 2031. 23XI and Front Row obtained a temporary restraining order to be recognized as charter holders while the case heads to a trial date on December 1st. The restraining order was ultimately revoked and appealed by the teams. 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 chartered teams. In the presentation, NASCAR requested that 23XI and Front Row return all the money they were paid when they were recognized as chartered teams this season. NASCAR indicated that the money would be redistributed to the 30 current chartered teams. A rule change in July, after the letter status was withdrawn from the two organizations, ensured that the six cars would not run the risk of failing to qualify for a race; starting positions are guaranteed to the 36 lettered cars in each 40-car field.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 charters and the sanctioning body should be free to move them. “The plaintiffs’ theoretical inability to obtain Charters after the trial also does not justify NASCAR selling or transferring Charters, because the plaintiffs do not have Charters now due to their own strategic choice,” NASCAR said in its filing. “The plaintiffs had multiple opportunities to acquire Charters for 2025, and they squandered them.” NASCAR also argued that a court cannot order a private company to associate with teams with which it is not interested in doing business. Another argument from NASCAR is that 23XI and Front Row have not been harmed by not having charters 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 does not have a charter. Additionally, 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 charter agreement and then by 62% in the 2025 agreement. “NASCAR pays teams more than even Formula 1 as a percentage of earnings,” NASCAR said. “The plaintiffs ignore the salary increases that the teams received. Instead, they focus on a text during the 2025 Charter 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 brought forward the biggest victory for the teams, a massive salary increase, which was established in the December 2023 draft. It also gave cardholders 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 that he wants to use litigation to obtain a permanent Charter that no other team has,” NASCAR alleged.
NASCAR
