NASCAR Halts Cartel Redistribution Amid Legal Battle
NASCAR has assured a federal court that it will not redistribute any “charter” (cartel) while the antitrust lawsuit filed by two racing teams is resolved. One of the plaintiff teams is owned by Michael Jordan.
The presentation on Friday in the Western District of North Carolina comes a day after a heated hearing. In it, 23XI Racing and Front Row Motorsports argued for a restraining order to have six “charters” restored to them until the jury trial, scheduled for December 1st.
NASCAR, in multiple presentations, had indicated its intention to redistribute the “charters” immediately, even mentioning an interested party with whom it could negotiate. A “charter” is equivalent to a franchise in other sports. 23XI and FRM refused to sign the agreements last September and sued NASCAR, accusing the motorsports series, owned and operated by the France family, based in Florida, of intimidation and monopolization of the auto racing market.
There are 36 “charters” for a field of 40 cars. U.S. District Judge Kenneth Bell repeatedly asked NASCAR why it couldn’t use one of the four “open” to sell it to an interested buyer, or devise a contingency plan that would allow the “charters” to be returned to 23XI and FRM if NASCAR lost in court.
The four original “open” “charters” are reserved for any potential new manufacturer entering the sport. With the six from the two plaintiff teams, there are currently technically 10 “open” “charters”. 23XI, owned by basketball legend Jordan and three-time Daytona 500 winner Denny Hamlin, and Front Row, owned by businessman Bob Jenkins, want to be recognized as holders of “charters” for 2025 to receive significantly higher payments than they receive as “open” teams.
Bell said he would rule on the injunction next week. However, NASCAR’s filing on Friday reduces some of the urgency, as the France family has pledged not to sell the “charters,” a move that, according to the teams, would put them out of business.
NASCAR stated that its commitment was voluntary and was made out of “NASCAR’s desire to focus on the growth of the sport for the 2026 Cup season and prepare for the trial.”
In the presentation, NASCAR stated that it will not “issue, sell, broadcast, or lease” additional “charters” for the 2025 Cup season, a statement that covers the six “charters”.
NASCAR also said that “it will not issue, sell, broadcast, or lease more than four additional “charters” for the 2026 Cup season.”
Jeffrey Kessler, lawyer for 23XI and FRM, said that NASCAR’s promise not to sell the “charters” was debatable and that they will respond to the presentation next Tuesday.
“Plaintiffs also do not agree that the defendants’ notice and representations demonstrate that the plaintiffs do not face irreparable harm,” he stated.
NASCAR’s suspension of any potential sale of “charters” does not technically prevent Bell from issuing the injunction to the teams, who are trying to demonstrate the irreparable harm they will face if they do not have “charters.” 23XI driver Tyler Reddick has a clause in his contract that says he can leave the team if his car does not have a “charter,” and Kessler indicated in court on Thursday that both Reddick and the sponsors have notified them that they are currently in breach.
Thursday’s hearing revealed how sour the situation has become between NASCAR and the two teams, through the disclosure of emails and text messages filled with expletives 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 have said they felt cornered by NASCAR’s final offer, which came with a deadline and the threat of revoking the “charters” if they didn’t sign within a day.
The teams used texts and emails to try to demonstrate how NASCAR imposed itself to reach a final agreement on the “charters”.
One, from commissioner Steve Phelps, said: “Give them the “charters”, choose a date and they can sign or lose their “charters”, as simple as that.”
Scott Prime, Vice President of Strategic Development, wrote: “We have all the leverage and the teams will almost have to sign the terms of the “charter” that 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 had been open to a settlement, but that he is willing to let the case go to a jury trial.
The playoffs begin Sunday at Darlington Raceway in South Carolina and 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 compete fairly for the Cup title while the lawsuit is ongoing.
