NASCAR Responds to Lawsuit from Michael Jordan and 23XI Racing
In a recent court filing, NASCAR argued that the lawsuit filed by Michael Jordan seeks to obtain a permanent franchise that no other team possesses. Furthermore, the organization stated 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 it has 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 assigning the franchises to other teams. These arguments are part of the federal antitrust lawsuit filed by 23XI and Front Row against NASCAR, in a dispute over franchises, which act 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 franchise agreements. The teams fought to make the franchises permanent during more than two years of extension negotiations, but NASCAR refused and their 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 1. The court order was overturned and appealed by the teams, and U.S. District Judge Kenneth Bell will hear arguments on August 28 regarding the matter. As “open” teams, 23XI and Front Row 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 removed, ensured that the six cars would not risk failing to qualify for a race; starting positions are guaranteed for the 36 franchised cars in each field of 40 cars.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. NASCAR also argued that a court cannot order a private company to partner 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 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. Furthermore, NASCAR said it pays teams a higher percentage than even Formula 1 and that its team payment structure demonstrates that it is not a monopoly because 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 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 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 that he wants to use litigation to be granted a permanent franchise that no other team has,” NASCAR alleged.
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