“This is a case about the unlawful monopolization of premier stock car racing by the France Family in order to enrich themselves at the expense of the premier stock car racing teams that the fans come out to see and that sponsors and broadcasters value.”
Thus begins a bombshell joint lawsuit filed on Tuesday in North Carolina against NASCAR by two teams that compete in the Cup Series that did not sign the charter extension agreement.
“The France family and NASCAR are monopolistic bullies and bullies will continue to impose their will to hurt others until their targets stand up and refuse to be victims. That moment has now arrived.”
23XI Racing and Front Row Motorsports are claiming that the conditions to compete in NASCAR limit revenue opportunities because of the monopolistic way the Sanctioning Body operates itself, owning a majority of tracks and has sought further intellectual property rights of the teams.
This is the culmination of a two years process in which the sanctioning body and teams negotiated on a new revenue sharing and sporting governance model. NASCAR on September 6 presented a take it or leave final offer to teams with 13 signing, many of them suggesting privately that they felt coerced into doing so.
That agreement also had a provision that did not allow teams to file antitrust lawsuits against the Sacntioning Body.
23XI Racing, owned by Michael Jordan and veteran driver Denny Hamlin, alongside restaurant franchisee Bob Jenkins of Front Row Racing refused to sign it. They hired Jeffrey Kessler, the leading antitrust attorney who has represented players in all four major professional North American sports and most notably secured name, image and likeness wins for college athletes and a historic equal pay settlement for the U.S. National Women’s Soccer Team.
Kessler was first retained by the collective Race Team Alliance prior to the Daytona 500.
“This is reminiscent for me of many sports that have gone through a transformative model,” Kessler said. “(It’s) sort of a moment when the legal style basically confronts them and says, either you’re going to voluntarily change or you’re going to be changed and you can either get on the bus or get run over by the bus. No one wanted this litigation but NASCAR didn’t really give these teams any choice — you either submit to the bully or you fight. They’re going to fight.
“We think at the end of the day, NASCAR’s going to have to change because that’s what the legal system is going to require.”
Kessler also says that change is going to have to be significant, and not marginal, thus their clients not agreeing to an extension of a slightly modified charter agreement.
“If NASCAR is willing to change, it’s got to be a significant change to make a fair system for the teams,” he said. “If they’re not willing to do that kind of a deal, then they’ll take this case all the way to a jury and a judge, and that’s why I say they’ll be forced to change. It’s the same type of thing I went through with the NCAA, who had a choice to make. They could keep fighting in court and keep losing and have the new system thrust upon them or in that case, they finally sat down and said, we’re ready to transform the sport and we’ll be a part of it.
“That’s the type of choice that NASCAR is going to face.”
The teams are seeking details from NASCAR and France “related to their exclusionary practices and intent to insulate themselves from any competition.” They are also seeking a preliminary injunction that would allow the two teams to compete in 2025 under the charter agreement signed by the other teams while the litigation proceeds.
23XI Racing and Front Row are seeking what it deems as treble damages for anti-competitive terms since the inaugural charter agreement was signed in 2016.
Charter negotiations timeline
What the charter system is
Why it’s a doomsday scenario if a deal is not reached
Teams hired top antitrust lawyer against NASCAR
Jeff Gordon on why the business model needs to change
Michael Jordan says NASCAR will die without charter permanence
Denny Hamlin says teams just want break even revenue
NASCAR’s June offer to teams ‘was worst yet’
Denny Hamlin on why charters need to be permanent
Smaller teams unified with larger teams
NASCAR, teams making progress on charter deal but hurdles remain
Steve Phelps speaks to Kevin Harvick in wide ranging interview
How drivers feel about the state of the negotiations
Hamlin says negotiations will continue until NASCAR is reasonable
23XI, Front Row refuse to sign NASCAR’s final offer
Denny Hamlin defers to 23XI statement
Brad Keselowski said time was right for a deal
Why Justin Marks signed the deal