NASCAR Halts Card Redistribution Amid Legal Battle
In an unexpected turn, NASCAR has assured a federal court that it will not redistribute any of its letters pending the resolution of the antitrust lawsuit filed by two racing teams, one of which is owned by basketball legend Michael Jordan. The statement, made on Friday before the U.S. District Court for the Western District of North Carolina, comes a day after a heated hearing. In this hearing, 23XI Racing and Front Row Motorsports argued in favor of a preliminary injunction to restore six charters to them until the jury trial, scheduled for December 1st. The charters are equivalent to franchises in other sports. 23XI and FRM refused to sign the agreements last September, opting to sue NASCAR. They accused the motorsports series, owned and operated by the France family, based in Florida, of intimidation practices and monopolizing the stock car racing market. U.S. District Judge Kenneth Bell repeatedly asked NASCAR why it couldn’t sell one of the four “open” charters 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 the trial. The four original “open” cards are reserved for any potential new manufacturer wishing to enter the sport. With the six from the two demanding teams, there are currently technically 10 “open” cards. 23XI, owned by Jordan and three-time Daytona 500 winner 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 than they get as “open” teams. Bell announced that it would issue a decision on the court order next week, although NASCAR’s presentation on Friday has calmed some of the urgency. The France family has promised 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 due to “NASCAR’s desire to focus on both the growth of the sport for the 2026 Cup season and preparation for the trial.” In the presentation, NASCAR stated that it will not “issue, sell, transfer, or lease any additional Charter for the 2025 Cup season.” This statement covers the six disputed charters. Additionally, NASCAR announced that “it will not issue, sell, transfer, or lease more than four additional Charters for the 2026 Cup season.” Jeffrey Kessler, lawyer for 23XI and FRM, argued that NASCAR’s promise not to sell the charters was debatable and that they would respond to the presentation next Tuesday. Kessler added: “The plaintiffs also do not agree that the defendants’ notice and statements demonstrate that the plaintiffs do not face irreparable harm.” The suspension of any possible sale of charters by NASCAR technically does not prevent Bell from issuing the preliminary injunction to the teams. These seek to demonstrate the irreparable harm they will suffer 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 does not have a charter. Thursday’s hearing revealed how tense the situation between NASCAR and the two teams has become, through the disclosure of emails and text messages with 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 expressed feeling pressured by NASCAR’s final offer, which included a deadline and the threat of revoking the charters if they were not signed within a day.
The teams used texts and emails to try to demonstrate how NASCAR forced a final agreement on the letters. One of them, from commissioner Steve Phelps, said: “Give them the letters, choose a date and they can sign or lose their letters, 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 the terms of the letter we present to them.” Jordan and 23XI did not sign, and Jenkins and Front Row joined the NBA legend in the lawsuit. Jordan stated out of 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 stated that they believe they can fairly compete for the Cup title.
