After over two years of a contentious negotiations process, 13 of 15 teams that compete in the NASCAR Cup Series agreed to an extension of the charter system that governs the financial and competition terms of the highest level of Stock Car racing.
For a breakdown of what the charter system is, how it works and the history of every entry that has competed within it since 2016, read this story.
How the NASCAR charter system works
The two teams that did not agree to an extension of the charter system, one that runs the length of the next broadcast rights agreement from 2025 to 2031, was 23XI Racing and Front Row Motorsports. 23XI is co-owned by Cup Series veteran Denny Hamlin and sporting legend Michael Jordan. Front Row Motorsports is owned by restaurant chain operator Bob Jenkins.
Over the course of the two plus years of negotiations, these were the issues that were volleyed back-and-forth between the two parties:
- Teams had received around a minimum of $5 million in overall revenue from the league over the previous agreement for the lowest-ranked charter and will now receive around $8.5 million after seeking closer to $10 million
- It takes roughly $18 million per season per car to race at the Cup level
- Race teams have said they are all losing money and that they at least wanted a system that provided them break-even revenue that made them less reliant on sponsorship
- Teams wanted the charter system to be made permanent as opposed to running the course of each television contract but NASCAR would not budge on this
- Charter permanency could make the system akin to a franchise model used in stick-in-ball sports and NASCAR rejected that conceptually
- The above concept comes down to governance as teams wanted a greater say in rules changes
- NASCAR wants to be able to field teams, at least for now, using charters pocketed for release when and if a fourth manufacturer enters the sport
- There were differences over intellectual property rights and where teams would shoot media content (in-house versus the new productions facility)
- How new revenue, like sports betting, would be split in addition to legacy revenue like broadcast rights
- NASCAR put in an anti-disparagement clause which limited critical commentary about the sanctioning body that was met with skepticism
- The core issue at play is that teams believe they are not financially rewarded for the value its cars and drivers bring to the NASCAR brand at large
Genuine feelings from team owners that signed NASCAR’s final offer on September 6 remains a muddy issue. Some said, anonymously, that they felt ‘strong armed’ and ‘coerced,’ one called NASCAR ‘a communist regime’ and ‘they held a gun to our head and we had to sign,’ but the likes of Brad Keselowski and Justin Marks said publicly the terms were good enough.
Rick Hendrick said he was ‘tired’ of negotiating.
Richard Childress had the bluntest public assessment over why he signed the agreement, even if he felt the terms were not agreeable:
“I didn’t have a choice,” Childress told FOX Sports. “We had to sign. I have over 400 employees, OEM contracts, contracts with sponsors. I’ve got to take care of my team.”
Even though NASCAR issued a ‘take it or leave it’ final offer, the narrative that teams were forced to sign it by midnight ‘or else’ was not entirely true as the below email from Front Row general manager Jerry Freeze and NASCAR president Steve Phelps indicated a willingness to give the two holdouts a week to review — even if refusing to reopen negotiations.
Front Row ultimately did not choose to sign the document, even by the extended deadline, and instead brought a federal antitrust lawsuit against NASCAR alongside 23XI on October 2 in the Western District of North Carolina.
The lawsuit
23XI and Front Row Motorsports claim that NASCAR is violating federal antitrust laws by controlling the market in which premier Stock Car racing teams can compete. They say that because NASCAR owns the series and a majority of tracks, while also requiring teams to purchase parts and pieces of the fourth-year NextGen cars from NASCAR-mandated suppliers, while prohibiting teams from competing in other Stock Car leagues without approval, is a violation of the law.
The teams also claim that NASCAR is using its alleged anti-competitive behavior to unfairly distribute revenue through the charter agreement.
“I did it for the smaller teams as well. It’s not just me,” said Jordan to FOX Sports on October 6. “I think everybody should have an opportunity to be successful in any business. My voice is saying that it hasn’t been happening. … Hopefully we [at both sides] can come to our senses and figure out something that can make sense for everybody.”
NASCAR appeared to have an idea the lawsuit was coming as Phelps sent a letter to 23XI on Setptember 18 addressing the core complains.
“It appears after 2+ years of negotiations with Teams, both collectively and individually, compromise and concession on both sides up until the last minute, we firmly believe that we have come up with a document that is fair and equitable to the industry. … You suggest that NASCAR somehow has ‘monopoly power’ and that 23XI and other Teams ‘depend on [NASCAR] for a competitive opportunity’ and have been presented with a ‘take-it-or-leave-it offer.’ We feel — and our attorneys have confirmed — that this contention is misplaced — and similar types of claims have already been rejected by courts.”
NASCAR also summed up its general defense on an October 16 filing:
“Plaintiffs have filed a meritless suit against NASCAR alleging baseless antitrust claims in order to obtain commercial agreements they previously rejected, and to attempt to extort more favorable contract terms.”
In other words, NASCAR is accusing 23XI and Front Row for filing an antitrust lawsuit only as a response to not successfully receiving the contract terms they sought over the negotiations process. NASCAR has also made legal precedence to Kentucky Speedway v NASCAR, the 2006 case that ultimate concluded the sanctioning body was not acting in violation of antitrust laws.
Since then, as 23XI and Front Row points out, NASCAR has purchased the ARCA Racing Series and merged with International Speedway Corporation but the sanctioning body points out the longstanding relationships held by ARCA and ISC even before the merger, while also claiming a statute of limitations.
The two teams say a statute of limitations does not apply because the anti-competitive harm is being applied anew every day in terms of the NextGen car parts supplier market, anti-compete clauses that prevent teams from racing in a comparable series all while NASCAR controls the series and a majority of the tracks.
NASCAR will likely argue in court that there are other Stock Car series for teams to compete in, such as CARS Tour or the ASA STARS Super Late Model Series, while also disputing the premise it is even legally required to have ‘premier teams’ competing in Cup Series events.
The Sanctioning Body also argued on December 2 that if it has monopoly power, it would have lowered the revenue it shared with teams and decreased the need to have high quality teams competing in the Cup Series.
“Plaintiffs concede the Charters are “worth millions of dollars” and NASCAR increased the revenues available to teams. … If NASCAR truly had market power, it would be decreasing its demand for Plaintiffs’ services and lowering the amount by which it compensates them,” NASCAR argued.
NASCAR also claims that it cannot be a monopoly if 13 of 15 teams signed the charter agreement extension as the two other teams have asserted.
The Sanctioning Body unsuccessfully attempted to have the lawsuit dismissed but the court overseeing the case denied it.
“The answers must be found when the parties have a full opportunity to pursue discovery of the relevant facts and then at trial, where the jury will be able to weigh the evidence and assess the credibility of the witnesses,” the judge wrote in his opinion.
What is a preliminary injunction?
As part of the lawsuit, the two teams asked the court to provide preliminary relief in the form of an injunction. The point of a preliminary injunction is to prevent one party from taking certain actions while a lawsuit is being heard. It maintains the status quo from before the damage was done.
In this case, 23XI and Front Row asked the court to force NASCAR to recognize the two teams as having charters over the course of the legal process, even though they did not sign the agreement as part of the conviction that the sanctioning body was behaving anti-competitively.
Judge Kenneth D. Bell granted this relief in December after determining that the teams were likely to experience irreparable harm in the form of drivers and sponsors exercising opt-out clauses available to them if their cars were not chartered in 2025. The judge also determined that a clause in the charter agreement that forced participated teams to not bring a lawsuit against NASCAR was likely unlawful.
Bell also forced NASCAR to approve the transactions both teams had made in purchasing one charter each from the shuttered Stewart-Haas Racing. NASCAR objected to the purchase, and refused to approve the transaction, as its previous owners agreed to the terms that 23XI and Front Row had not.
“NASCAR fans (and members of the public who may become fans) have an interest in watching all the teams compete with their best drivers and most competitive teams,” the judge wrote. “Further, the public has an interest in preserving the rights of litigants to pursue legal claims in good faith, particularly antitrust claims that aim to preserve the process of commercial competition.”
NASCAR also claimed that it would be subject to irreparable and irreversible harm in recognizing 23XI and Front Row as chartered teams in 2025. Bell ruled that if NASCAR is ultimately victorious on the merits, that the decision can be undone.
The Sanctioning Body is expected to appeal the preliminary injunction decision and has requested a May trial where it is likely to argue granting the two teams entry into every Cup Series race but to not be forced into paying them money associated with the terms not agreed to.
Who is the judge?
The original judge assigned to this case was Frank D. Whitney, who was appointed to the bench in 2006 by George W Bush.
However, the case was reassigned on December 11 to Kenneth D. Bell, a former prosecutor who operated a private practice from 2003 until his appointment by Donald J. Trump in 2019. Bell is a 1983 Wake Forest University law school graduate.
Who are the lawyers?
The two primary attorneys are familiar court room foes.
Representing 23XI and Front Row is Jeffrey Kessler, who is most reputable for representing NCAA athletes in their successful pursuit of earning name, image and likeness rights. He has also represented the US Women’s National Team in their pursuit of equal pay.
NASCAR is represented by Chris Yates, who has represented the United States Soccer Federation, Ultimate Fighting Championship, World Aquatics, Fanatics and the Atlantic Coast Conference.
Where is this headed?
For one, the antitrust lawsuit has a scheduled trial for Monday, December 1, 2025. There is also, of course, the possibility that the two sides could reach a settlement at any time.
Judge Bell says he will be flexible with the established trial timeline but he is not going to be flexible on the December 1 trial date, nor will he accept being ‘pinched’ in terms of discovery disputes. Bell said he ‘hates’ mediating discovery but has opted to do it with this case, instead of delegating to a magistrate judge, in order to preserve the below timeline:
- Friday January 31, 2025 | Designation of Mediator
- Saturday March 15, 2025 | Amendment of the Pleadings
- Sometimes in May | Injunction appeal hearing
- Monday June 30, 2025 | Close of Fact Discovery
- Friday September 19, 2025 | Completion of Discover
- Wednesday September 24, 2025 | Mediation Report
- Wednesday October 1, 2025 | Filing of Dispositive Motions
- Monday December 1, 2025 | Trial
The teams have yet to make particularly clear what they want out of a judgement, if it is decided that NASCAR is acting monopolistic. What is known, pre-lawsuit, is that the teams wanted permanent charters and not just agreements that run the duration of each broadcast rights agreement. It also wants a larger slice of the figurative revenue pie.
The teams, and especially 23XI Racing due to its affiliation with the Jordan Brand, want NASCAR to have less rights over its intellectual property like branding and identity.
If NASCAR is deemed to be a monopoly, it could be forced to sell some of its track inventory or a rival Stock Car series could be developed to offset the hegemony established by the status quo. Should NASCAR win, would it welcome back 23XI Racing and Front Row under the terms the 13 other teams agreed to? Would those teams even want to come back?
Charter negotiation 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
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
NASCAR plans to appeal injunction ruling; other details
Judge grants partial stay of injunction in blunt response to NASCAR
Teams accuse NASCAR of petulance in response to delay request
Why Judge Bell did not delay his injunction order
NASCAR wants 23XI, FRM to post bond covering 2025 charter pay
Both sides meet in court to argue motion to dismiss, bond payment
Judge rules against NASCAR’s motion to dismiss, trial on schedule
