NASCAR Promises Not to Redistribute Cartels Amid Legal Dispute
In a recent legal development, NASCAR has assured a federal court that it will not redistribute any cartel pending the conclusion of the antitrust lawsuit filed by two racing teams. This promise comes amid growing tension between the stock car racing series and the teams involved in the dispute. The announcement, presented on Friday in the Western District of North Carolina, follows a heated hearing where 23XI Racing and Front Row Motorsports argued in favor of a preliminary injunction. They sought the restoration of six cartels until the jury trial, scheduled for December 1st. A charter in NASCAR is similar to a franchise in other sports. 23XI Racing and Front Row Motorsports refused to sign the agreements last September, opting to sue NASCAR. They accused the racing series, owned and operated by the France family, of monopolistic practices.U.S. District Judge Kenneth Bell had questioned NASCAR about the possibility of selling one of the four “open” charters to an interested buyer. “Open” charters are reserved for the entry of new manufacturers into the sport. With six of the teams suing, there are technically 10 “open” charters currently. 23XI, owned by basketball legend Michael Jordan and Denny Hamlin, along with Front Row, owned by businessman Bob Jenkins, are seeking to be recognized as charter holders for 2025. This would allow them to receive significantly higher payments compared to “open” teams. Judge Bell will make a decision on the injunction request next week. NASCAR’s Friday filing seeks to calm the urgency by promising not to sell the cartels. The teams argue that this action could lead them to bankruptcy. NASCAR has stated that its commitment is voluntary, with the aim of “focusing on the growth of the sport for the 2026 Cup season and preparing for the trial”. Jeffrey Kessler, the lawyer for 23XI and FRM, has stated that NASCAR’s promise not to sell the cartels is debatable. The plaintiffs will respond to the filing next Tuesday. The suspension of any possible sale of charters by NASCAR technically does not prevent Judge Bell from issuing the preliminary injunction. 23XI and FRM seek to demonstrate the irreparable harm they would face if they are not granted the charters. 23XI driver Tyler Reddick has a clause in his contract that allows him to leave the team if his car doesn’t have a cartel. Kessler indicated in court that both Reddick and the sponsors have notified that they are currently in breach. Thursday’s hearing revealed the acrimony between NASCAR and the two teams, with the disclosure of emails and text messages containing offensive language from Jordan and other high-profile plaintiffs. Of the 15 organizations with charters in NASCAR, only 23XI and FRM refused to sign the charter extensions. Many teams felt they were being pressured by NASCAR’s final offer. The teams used text messages and emails to demonstrate how NASCAR pressured to reach a final agreement on the charters. One of them, from commissioner Steve Phelps, said: “Give them the charters, choose a date and they can sign or lose their charters: it’s that simple.” Scott Prime, Vice President of Strategic Development, wrote: “We have all the leverage and the teams will almost have to sign any cartel terms we put in front of them.” Jordan and 23XI did not sign, and Jenkins and Front Row joined the NBA legend in the lawsuit. Jordan said outside the court on Thursday that he was open to a settlement, but is willing to let the case go to a jury trial. The playoffs begin Sunday at Darlington Raceway in South Carolina. Among the drivers in the 16-driver playoff field are 23XI’s Reddick and Bubba Wallace, and Hamlin, who races for Joe Gibbs Racing. All three said they believe they can fairly compete for the Cup title while the lawsuit is ongoing.NASCAR is committed to not issuing, selling, transmitting, or leasing any additional cartel for the 2025 Cup season.
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