Just how much animosity Dennis Hamlin a toward NASCAR was once again laid bare Tuesday morning as he completed his questioning and cross-examination in the 23XI Race And Motor sports at the forefront against NASCAR antitrust lawsuit.
The cross-examination was conducted by Lawrence Buterman, NASCAR’s antitrust defense attorney, and their exchanges were emotionally charged, even while respecting court decorum.
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Hamlin made several references to “we are not a monopoly like You are,” and the way he said “you” was conveyed in a way that could just as easily have gone through Buterman and directly to the France family.
For example, Butterman attempted to make an analogy that the contract Riley Herbst signed with 23XI last year, which prevents Herbst from racing with another team in another series without permission, similar to the antitrust claims filed against NASCAR over exclusivity provisions.
“We are not a monopoly,” Hamlin said. “You are. I think it’s different when you have options and drivers have a choice of teams they can race for.”
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Buterman also asked Hamlin what percentage of overall team revenue drivers get in their contracts, and how that is a lower percentage of revenue than what NASCAR pays out of its revenue to teams.
Hamlin responded that it was different because teams incurred additional costs, to which Buterman objected to the costs incurred by NASCAR, but the Daytona 500 three-timer also called the sanctioning body a monopoly again.
“We are not a monopoly like you” and “drivers have the choice to choose where to use their services”.
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How about a text exchange between Hamlin and Jordan where they were discussing signing Corey Heim to a long-term contract.
Jordan told Hamlin to “lock him up,” and Buterman asked how that was different from the legal claim that NASCAR is anti-competitive for “locking up the tracks.”
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What happened on the first day of the NASCAR Antitrust trial
Personal frustration with Jim France dates back to a conversation Hamlin had with the NASCAR CEO at the awards banquet in Nashville in December 2022, which left him “very, very discouraged” about how differently they viewed the financial landscape.
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“He told me directly that the problem in NASCAR is that the teams spend too much money,” Hamlin recalled.
This exchange took place in the final moments of his friendly direct interrogation with lawyer Jeanifer Parsigian.
France said teams should spend $10 million per car instead of the roughly $20 they were spending at the time of their conversation. Hamlin told France that cutting its operating budget in half simply wasn’t realistic.
“Reducing is not growth. I can’t cut my costs in half. That’s not realistic,” Hamlin recalled of his message to France, noting that NASCAR had so far reduced the length of race weekends and testing sessions. “We have cut this grass so short that we are reduced to dirt.”
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Hamlin said France told him “you’re the type of owner NASCAR wants in the sport” and not a New York private equity investor, but Hamlin said he couldn’t cut any more and “I’ve invested in you.”
Hamlin said he doesn’t want to be another statistic of a former flight team owner who went bankrupt.
“He didn’t have an answer.”
Under cross-examination, Buterman said NASCAR offered teams positive term in the form of a seven-year deal with a seven-year extension option, while rejecting permanent charters.
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The seven option years have fixed terms, not a percentage of revenue like the current seven years, and these next seven years could not be negotiated. Hamlin said 23XI would not be in business if they agreed to these terms.
He says this because NASCAR could theoretically get a much larger broadcast rights deal after 2031, but the option allows them to pay teams “no less than they currently make.”
“Well, thank you, I appreciate that,” Hamlin said dryly.
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“You’re forcing us to buy all the cars, the components…we don’t own any of it…how ridiculous,” Hamlin responded to Buterman.
Buterman also drew attention to Hamlin seeking $105 million in damages, which would represent a 900 percent return on his initial $45 million investment in starting 23XI as a 40 percent owner of the team.
Michael Jordan and Curtis Polk own the remaining 60 percent of the organization.
“We want to be made whole of what you did to us,” Hamlin said, again as if speaking through the hired lawyer and Frances.
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The court was told Hamlin earns $14 million a year on his current contract with Joe Gibbs Racing.
When asked why he earns more than most drivers, Hamlin replied, “I’m at the top of my game.
There was also an exchange about the Driver Ambassador program, which Hamlin said “bothers him the most” as a team owner, even though he personally stands to gain from it as a driver.
The DAP, which began this year and is codified in the charter agreement, pays pilots for promoting the sport. But Hamlin says it takes away the teams’ greatest assets, their drivers, and forces them to promote NASCAR initiatives rather than team initiatives. Teams pay 40 percent of the DAP money.
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Hamlin says NASCAR is using its best marketing asset, using drivers to sell tickets and paying them to do so, and the teams are not getting any return on investment from this exercise.
Buterman asked if Hamlin didn’t like drivers getting paid.
“We pay the drivers, not NASCAR.”
Buterman responded that “most drivers don’t have a $14 million salary like you” and Hamlin responded that most drivers don’t win as many races every season as he does.
Read also:
Everything you need to know about the NASCAR antitrust lawsuit, 23XI and Front Row
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NASCAR’s antitrust lawyer has taken pains to portray Hamlin as an unreliable and/or misleading narrator as to the facts paralleling the legal allegations.
For example, Hamlin appeared on the Kenny Wallace Show, where the former Cup Series driver and television analyst asked about the NextGen car and received generally positive comments from the three-time Daytona 500 winner about its cost-containment potential.
Similarly, Hamlin said in the Netflix special “Full Speed” that the car lowered the barrier to entry so a new team could compete immediately. Hamlin called the car “a net positive for the sport” but is now suing NASCAR in part over the fact that the car’s single-source nature is an alleged tool for maintaining a monopsony.
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“Because if I say something wrong, I get a blow from NASCAR. So, publicly, it’s sunshine and rainbows,” Hamlin said. “My job is to take the talking points that NASCAR tells me and say them publicly. If something serious, I get a phone call from NASCAR,” Hamlin said.
Hamlin says he then has to pass inspection and about NASCAR, “you can tell me what I do.”
Buterman then asked how can the jury take what Hamlin says seriously if he sometimes says things he doesn’t really feel.
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“It’s absurd,” he said. “What I do publicly is spread positivity. That’s my job. You give me talking points. I say it to make the fans happy.”
Buterman also discussed previously publicized communications from 23XI executives Gene Mason, Jordan and Polk, with the latter claiming that Hamlin is a “terrible businessman” who “spends money recklessly.”
Hamlin’s response was that 75 percent of teams lost money, but 23XI did not while competing for wins and championships.
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Hamlin said he wasn’t offended by the remarks his partners made about him because “it’s their job to keep us in check.”
For example, the AirSpeed installation cost $35 million and Polk objected to that amount, but Hamlin also explained why it was ultimately built.
“He didn’t think it was a good idea given the way the (charter) negotiations were going…we didn’t like the length and conditions”…but “that doesn’t mean he didn’t agree with the vision and that’s why we did it.”
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Hamlin says he and Jordan want to win, and that desire to win comes at a cost, which elicited a nod from Jordan sitting in the front row.
Buterman also followed up Hamlin’s expression to France during the Nashville meeting that he wanted to stay in NASCAR long term through a text message in which he expressed to Jordan in August 2023 that he wanted to be bought out of his 23XI ownership.
Hamlin said he was simply frustrated with the decision-making power he had at the time, and said he and his colleagues on the management team went to a country club and talked about it. He said that sometimes he had to “kick and scream” to get attention for what he wanted to do.
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He also called such disagreements among company executives normal in any business. There have been other disagreements, but they “always find a solution.”
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