Two Cup teams, including one co-owned by Michael Jordan, are seeking to transform NASCAR with an antitrust lawsuit against the sanctioning body and NASCAR Chairman Jim France.
Jeffrey Kessler, a specialist in sports labor disputes and antitrust disputes representing 23XI Racing and Front Row Motorsports, said: “I have never found a case as blatantly anticompetitive as this one.
“Here we have a sport in which one family has essentially used its power to create an absolute monopoly to benefit that family instead of benefiting the teams, the drivers, the sponsors, the broadcasters and the fans.”
NASCAR had no comment Wednesday when contacted by NBC Sports.
Kessler, Bob Jenkins, owner of Front Row Motorsports, and Curtis Polk, co-owner of 23XI Racing with Jordan and Denny Hamlin, spoke with reporters Wednesday hours after the lawsuit was filed in U.S. District Court in Charlotte, Carolina from the North. The plaintiffs are seeking a jury trial.
23XI Racing, co-owned by Michael Jordan, Front Row Motorsports files lawsuit against NASCAR
23XI Racing and Front Row Motorsports were the only two Cup teams not to sign a new charter agreement with NASCAR.
Jordan issued a statement on Wednesday.
“Everyone knows I have always been a fierce competitor, and that drive to win is what motivates me and the entire 23XI team every week on the track,” Jordan said. “I love the sport of racing and passion for racing. Our fans, but the way NASCAR is run today is unfair to the teams, drivers, sponsors and fans. Today’s action Today shows that I am ready to fight for a competitive market where everyone wins.
Two years ago, Polk said that “the business model of sports is really broken for teams.” He stressed Wednesday that nothing had changed.
“The France family has dictated every aspect of stock car racing in America, from the gas and tires we use, to the parts we have to buy for the race cars, to the schedule, to the rules, to the tracks “We race, the fees we have to pay to race and how our races are consumed by the public,” said Polk, whose team employs drivers Bubba Wallace and Tyler Reddick.
“This control has had a depressing economic impact on team profitability, their corporate value, as well as the salaries of drivers, crews and race workshops. …The new charter is an attempt to further marginalize team voices in the sport, relinquish control of valuable intellectual property and create adversarial financial relationships with our drivers. Its objective is to consolidate the power of the France family for its sole benefit.”
NASCAR was founded by Bill France Sr. in 1948. He ran the sport until January 1972, when his son, Bill France Jr., took over as CEO of NASCAR.
Bill France Jr. served as chairman and CEO until October 2003, when his son, Brian France, assumed the position.
Brian France resigned from that position in August 2018 after his DWI arrest and was replaced by his uncle, Jim France, who continues to oversee the sport.
The lawsuit says Front Row Motorsports, which won the 2021 Daytona 500 with Michael McDowell, “never generated a profit.”
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In response to a question from NBC Sports, Polk pointed out the financial differences between NASCAR drivers and teams compared to other professional sports.
Polk said that in the new charter agreement, which begins next year, teams will receive “approximately more than $400 million.” Polk estimates – NASCAR, a private organization, does not release its financial figures – that the sport “generates nearly $3 billion a year. Thus, the teams only share around 13% of the overall pot generated by the sport.
Polk estimates that the average salary of drivers for the 36 approved Cup teams is $3 million per year. Polk noted that figure would represent about 3 percent of the money he estimates NASCAR generates annually.
NFL players, who benefit from a collective bargaining agreement, receive 48.8% of NFL revenue over a 17-game season. NBA players receive 51% of basketball-related revenues through the collective bargaining agreement with the league.
Kessler said NASCAR’s financial information would be available through discovery.
“That’s one of the benefits of federal antitrust litigation,” he said. “We will be able to obtain financial records. We will be able to follow the money. We will be able to see exactly how much this system was exploited and how many injuries it inflicted on teams and drivers.
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As part of its accusations regarding NASCAR’s monopolistic operations, the lawsuit points out that pressure was placed on teams to sign the charter agreement last month.
The Cup teams formed the Race Team Alliance in July 2014 to, according to the lawsuit, “jointly negotiate a fairer deal with NASCAR on behalf” of the teams. This led to the initial charter contract in 2016, which was renewed in 2021. The current charter contract expires this year. Negotiations have taken place over the past two years.
According to the lawsuit, NASCAR stopped negotiating with the RTA in March 2024 and NASCAR “insisted that each team negotiate the renewal of its charter agreement separately” instead of a joint negotiation.
The lawsuit says the teams received the final version of the agreement at 5 p.m. ET on September 6 and were told they had to sign by 6 p.m. ET or risk losing their charter. That deadline, according to the lawsuit, was extended to midnight.
Although all Cup teams other than 23XI Racing and Front Row Motorsports signed the charter agreement last month, Kessler said that should not be taken as an indication that the agreement is good.
“In every antitrust case, the victims take what they can get,” Kessler said. “…But sometimes there have to be those who have the courage, the resources, the will to stand up and say, ‘We’re not going to take this anymore,’ and that will benefit everyone.
As part of the lawsuit, 23XI Racing and Front Row Motorsports are seeking:
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“A preliminary injunction that will allow them to accept and operate under the 2025 charter agreement until the matter is resolved.”
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“A permanent injunction to end NASCAR’s exclusionary practices and restore competition to the affected market.
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“Discovery of NASCAR and Jim France regarding their exclusionary practices and their intention to isolate themselves from all competition.
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“Monetary damages tripled for harm plaintiffs suffered over the past four years due to the need to compete under the anti-competitive and sub-market terms of the 2016 charter agreement and for harm plaintiffs will suffer in the future for having to compete according to market conditions. anticompetitive terms of the 2025 charter agreement while they litigate this matter through trial.
Asked Wednesday for more details, Kessler said he “wouldn’t articulate a specific endgame” but said, “these teams didn’t bring this case to just get modest changes.” It’s not about that at the moment, teams have a D-plus deal and will settle for a D deal or a C-plus deal.
“What needs to happen is a fundamental change in which any high-performing team can get a fair return on investment. Where drivers can be fairly compensated. Where teams control their intellectual property. Where investments can be made and realized, as seen in every other sport. This is a fundamental change. So I’m not going to guess at the moment what it’s going to look like exactly. We will know.
23XI Racing and Front Row Motorsports plan to race next year even though they don’t have a charter. Both organizations are two-car teams. Each has an agreement to purchase a charter from Stewart-Haas Racing.
When Polk was asked if he, Jordan and Hamlin would consider leaving the sport and shutting down 23XI if they didn’t get the result they were looking for, Kessler responded.
“Our customers are there until the end,” he said. “What happens depends on what the courts decide and allow, but they will do their best to continue competing for as long as they can.” We expect this to end in a legal victory or a settlement that transports this sport.
