CHARLOTTE, N.C. — A top NASCAR executive returns to the stand Wednesday for a second day of testimony in the explosive antitrust case that accuses the largest motor sports series in the United States of being a monopolistic tyrant in violation of federal antitrust laws.
NASCAR is being sued by 23XI Racing, owned by Basketball Hall of Famer Michael Jordan and three-time Daytona 500 winner Denny Hamlin, and Front Row Motorsports, owned by fast-food franchiser Bob Jenkins. They were the only two organizations out of 15 to refuse to sign agreements last year on new charters, which are NASCAR’s version of the franchise model used in other sports.
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Front Row and 23XI argue that NASCAR is a monopoly that has handcuffed teams with a bottomless revenue model. The charter agreement that took effect this year ended more than two years of tough negotiations in which neither side moved until NASCAR presented its final offer on the eve of the 2024 playoffs and refused to negotiate further.
The agreement did not meet the demands made by the 15 teams, but 13 teams signed anyway with the belief that they would lose their protected charter status – which guarantees both entry to each race and a defined share of the purse.
Tuesday’s second day of testimony — which included nearly three hours from Hamlin — turned to Scott Prime, NASCAR’s executive vice president for strategy. Jeffrey Kessler, attorney for 23XI and Front Row, used Prime’s memos and private communications to attempt to demonstrate anticompetitive practices.
Among the exhibits was NASCAR’s fear that a rival stock car series would develop that would resemble the LIV golf league. To stop such a move, communications showed that NASCAR executives attempted to lock the tracks where they competed into exclusivity clauses that would prohibit them from hosting further events.
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Kessler showed an agreement with Las Vegas Motor Speedway in which NASCAR implemented a clause that the track could not host a rival stock car series for two years after its agreement with NASCAR expired.
Kessler also showed communications between Prime, NASCAR Commissioner Steve Phelps and NASCAR Chairman Steve O’Donnell in which the three expressed frustration with NASCAR Chairman Jim France and Vice Chairman Lesa France Kennedy because the series’ owners refused to offer concessions in negotiations.
Phelps wrote that the current proposal showed “zero wins for teams” at the time, while O’Donnell claimed the deal would take NASCAR back to 1998 while returning the series to a “dictatorship, redneck, small Southern sport.”
Prime defended the deal that was ultimately reached — “from my perspective, where we landed was strong for both teams” — but Kessler confronted Prime about eight specific points the teams had asked for and didn’t receive.
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The teams had requested that the charters become permanent (they are currently renewable and revocable), for 1/3 of revenue, 33% of new revenue streams, 33% of any increase in media deals, a voice in governance regarding programming, electrification and new industrial initiatives, as well as compensation for its intellectual property.
Kessler listed each of the requests individually asking whether any of them were included in the final charter agreement, and Prime responded “No” to each of them. Prime also said he was unaware of the sanctioning agreements, was unfamiliar with the split between CART and IndyCar that decimated single-seater racing in the United States, and distanced himself from many contractual agreements.
He apologized for language used in one of his communications and said it came from frustration with the slow pace of negotiations. One series of texts discussed a meeting, with France Kennedy writing “the teams won’t get everything they want, and I hope we can just meet halfway.”
O’Donnell responded: “I just asked someone in the room to highlight how one of our positions is going to grow the sport and position us for a big rights renewal in the future.”
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Phelps responded: “Productive? Insanity. Zero wins for the teams.” He later added that a draft charter proposal “must reflect a middle position, otherwise we are dead in the water.”
Prime called the lack of concessions to the team a “bold strategy” while O’Donnell said “any great sportsman” would find NASCAR ridiculous for its negotiations.
Jordan and Jenkins, as well as Rick Hendrick and Roger Penske – the two most powerful team owners in the United States – are all expected to testify in the trial scheduled to last two weeks. Jenkins said in a pretrial deposition that he has lost $100 million since Front Row was founded in 2004.
