Judge orders NASCAR to issue charters to 23XI, Front Row for 2025, including the SHR ones

Tyler Reddick could have become a free agent today, setting this into motion

NASCAR: NASCAR Cup Series Championship
Credit: Mark J. Rebilas-Imagn Images

NASCAR has been ordered by a federal judge in North Carolina overseeing its antitrust lawsuit to recognize 23XI Racing and Front Row Motorsports as chartered teams during the 2025 Cup Series season while also forcing the transaction approval of the Stewart-Haas Racing charters.

Judge Kenneth D. Bell, who took over for the originally assigned Frank D. Whitney, ruled that both teams successfully established a need for injunctive relief on the merits while also recognizing that public interest favors 23XI and Front Row competing as chartered teams.

Specifically, the judge ruled that a provision forcing teams to agree not to sue NASCAR on antitrust grounds in order to compete in the Cup Series was a violation of antitrust law. As a result, pending any appeal, all three full-time cars across both teams will have charters and everything that comes with it.

What the charter system is and how it works can be read here.

Here is a recap of the lawsuit to date. It’s worth noting again that 23XI, owned by Cup Series veteran driver Denny Hamlin and sporting legend Michael Jordan, and Front Row Motorsports, owned by restaurant franchisee Bob Jenkins have sued NASCAR on grounds that it is in violation of sports antitrust law.

Bell writes in his ruling:

“Here, the public interest strongly favors entry of a limited preliminary injunction in favor of the Plaintiffs during the 2025 NASCAR race season, both to give fans of stock car racing the opportunity to watch (and root for and against) the full slate of teams and to allow Plaintiffs’ antitrust legal challenges to be considered.

“As discussed below, Plaintiffs have established that they are likely to succeed on their claims that 1) NASCAR has monopoly power in the market for premier stock car racing and 2) to the extent that NASCAR’s 2025 Charter Agreement includes a release that bars teams from asserting the antitrust claims asserted by Plaintiffs, such a provision would be a violation of the antitrust laws. Further, Plaintiffs have shown that in the absence of guaranteed entry into all races as a chartered team, they will likely suffer irreparable harm through the loss of contractual control over their best drivers and the resulting inability to field their best race team. Finally, the balance of equities favors Plaintiffs because NASCAR has agreed to allow Plaintiffs to participate in all NASCAR Cup Series races (albeit only as an ‘open’ team) without requiring the challenged release clause, and Plaintiffs will suffer harm in the absence of being considered a ‘charter’ team.”

The court has decided that it was in the best interest of the consumer, which are NASCAR fans, to maintain the status quo from previous seasons as 23XI and Front Row pursued legal avenues that the judge did not find to be immediately frivolous on the merits.

Specifically, the judge found the contractual clause in the charter agreement document that prevented teams from bringing antitrust lawsuits against NASCAR to be a violation of antitrust law, even as it did not state an opinion yet about the other claims made by the teams.

The judge writes:

“Again, for purposes of this Order, the Court has focused its attention only on the anticompetitive effect of the Release. With respect to that conduct, to the extent that the Release bars Plaintiffs’ antitrust claims, the Court finds that Plaintiffs are likely to succeed on their claim that it is unlawful in this context, considering the circumstances ‘as a whole.’ In practical effect, the question before the Court is — Can a monopolist require that a party agree to release the monopolist from all claims that it is violating the antitrust laws as a condition of doing business? The answer is no.”

The decision was made citing numerous legal precedence. The judge also said this narrow determination about the lawsuit release clause does not have any bearing on the antitrust lawsuit on the whole, which is what NASCAR has argued.

Defendants argue that accepting Plaintiffs’ position will mean that parties will be unable to settle their antitrust disputes. Not so. A general release executed in the context of settling an ongoing legal dispute (for example, this lawsuit) or a specific release of past conduct may be enforceable without green-lighting the ability of a monopolist to condition entry into a market – here the NASCAR Cup Series – on the prospective entrant’s agreement not to challenge the monopolist’s conduct.

“Market aspirants should not be forced to choose between participation in a market and the later assertion of their ongoing/future antitrust rights, nor should a monopolist be permitted to include in the market only those who consent to the monopolist’s alleged wrongdoing. Therefore, the Court finds that Plaintiffs have shown a likelihood of success on their Sherman Act claim as it relates to the Release.”

Again, the judge is stating, independent of the other issues raised by 23XI and Front Row, this specific contractual clause was a violation of the law. And as such, in addition to public interest, 23XI and Front Row can compete as chartered teams without waiving their right to bring forth the lawsuit.

Tyler Reddick, free agent?

NASCAR: NASCAR Cup Series Championship
Credit: Mark J. Rebilas-Imagn Images

One of the arguments made by the two teams is that Tyler Reddick of 23XI Racing has an opt out clause in his contract that could make him a free agent if the team did not have a charter that guaranteed him entry into every race.

The teams argued that similar opt outs exist for drivers and sponsors across the industry. The judge wrote that since Judge Whitney denied the initial injunction request last month, Reddick filed a breach of contract grievance with 23XI.

That provided the basis of irreparable harm to the teams in not receiving this injunctive relief.

“Since the Court denied the initial motion, 23XI’s top 2024 driver Tyler Reddick has given notice that the team is in breach of his driver contract, which will allow him to leave the team if the breach is not cured in 30 days (by December 18, 2024). Drivers Riley Herbst, Noah Gragson, Bubba Wallace and Corey Heim have similar contracts and/or have expressed their need for immediate resolution of the uncertainty surrounding the approaching racing season. The lack of chartered cars has also impacted Plaintiffs’ sponsor relationships, specifically with key sponsors Monster Energy and Love’s Travel Stops. These are changed circumstances that the Court finds have moved Plaintiffs’ likely harm from remote and speculative to present and immediate.

“Plaintiffs’ loss of their contractual rights with their drivers coupled with the uncertainty over racing as an ‘open’ team is what moves the needle over the line. The ‘present prospect’ of the loss of star drivers constitutes irreparable harm that ‘cannot fully be rectified by the final judgment after trial.’ Defendants suggest that Plaintiffs’ drivers’ concerns are insincere and they won’t really leave Plaintiffs’ teams. While the Court of course can’t completely discount that possibility, the reality of the situation for both the drivers and the Plaintiffs is clear and immediate. Absent entry of a preliminary injunction by December 18, 2024, Tyler Reddick will become a ‘free agent’ and whether or not he has a firm plan to leave 23XI, other teams will have the present ability to contract for his services (most probably for several years to protect both the team and the driver). While irreparable harm cannot be speculative, it need not be certain or have already occurred before an injunction is granted.”

The judge determined that Reddick leaving 23XI would also deny a team ‘an incalculable opportunity to achieve success on the track,’ and that ‘sports are played in the moment’ with no way to predict results and are determined by the best competitors on any given field.

The judge continues:

“Put more directly, what would it be worth for each of the Plaintiffs and their drivers to be able to forever say they won the 2025 Daytona 500 or the NASCAR Cup Series Championship?”

For 23XI, that becomes harder to do without Reddick.

Monster Energy, which serves as the sponsor for Reddick and the No. 45, told 23XI in November that it was delaying a promotion and reconsidering its agreement with the team due to uncertainty around the case.

Loves Travel Stop, a longtime Front Row partner also expressed concerns about the impact not having a charter would have on their business agreement.

What now?

Just liked the teams did after Judge Whitney ruled against them, NASCAR now has the option to appeal to the fourth circuit court. It has not yet made that decision.

Judge Bell also signaled intent to have the antitrust lawsuit begin prior to the 2026 season.

The full document can be downloaded below.

Lawsuit timeline

23XI Racing, Front Row decline to sign NASCAR’s final 2025-2031 charter document
Why 23XI, Front Row filed a lawsuit against NASCAR
23XI, Front Row makes his case in antitrust lawsuit against NASCAR
Richard Childress says he had ‘no choice’ but to sign charter document
How drivers feel about the lawsuit
Michael Jordan comments on his team’s lawsuit against NASCAR
Meet NASCAR’s antitrust defense lawyer
NASCAR files injunction to be included in charter system through lawsuit
NASCAR motions against team’s preliminary injunction request
NASCAR, teams consent to redacting charter details in filings
Teams make case for injunctive relief, expedited discovery
NASCAR’s lengthy rebuttal to injunction, lawsuit
Teams respond to NASCAR response over injunction
23XI, Front Row and NASCAR go to court over injunctions
Judge rules against teams preliminary injunction request
Denny Hamlin says 23XI may not race next year
What preliminary injunction denial means for lawsuit
NASCAR drops ‘lawsuit release clause’ in open agreement
Appeal timeline rebuttal filed by NASCAR
Why 23XI may not have to race in the Clash without charters
Teams drop appeal, may re-file in district court
23XI, Front Row re-file injunction request
NASCAR opposes expedited timeline
France, NASCAR motion to dismiss, deny SHR charter transfer request
NASCAR says injunctive request still fails to show irreparable harm
Teams say NASCAR went back on its word over SHR charters
23XI, Front Row respond to NASCAR’s motion to dismiss
Judge orders NASCAR to issue charters to 23XI, Front Row

Matt Weaver is a Motorsports Insider for Sportsnaut. Follow him on Twitter.

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