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The teams, 23XI Racing and Front Row Motorsports, took this step following two years of contentious negotiations with the privately owned National Association for Stock Car Auto Racing and the 15 organizations holding charters in the top-tier Cup Series.
In the lawsuit, which was obtained by The Associated Press, the teams described the France family and NASCAR as "monopolistic bullies," asserting that such bullies will continue to impose their will until their targets refuse to be victims. They declared, "That moment has now arrived."
Earlier in September, NASCAR presented its final proposal for a revenue-sharing model, which was signed by 13 organizations, many of whom claimed they felt pressured to do so. However, 23XI Racing, co-owned by Jordan and veteran driver Denny Hamlin, along with the smaller Front Row team, declined to sign. They have engaged Jeffrey Kessler, a prominent antitrust attorney known for representing players in major North American sports and advocating for significant changes in college athletics and equal pay for the U.S. women's national soccer team.
The lawsuit demands information from NASCAR and France regarding their exclusionary practices and their intent to shield themselves from competition. Kessler indicated that he would seek a preliminary injunction to allow the two teams to compete in 2025 under the new charter agreement while the legal proceedings unfold.
The teams are also pursuing treble damages for the anti-competitive conditions that have governed the sport since the original charter agreement in 2016.
Jordan, the retired NBA superstar, stated, “I have always been a fierce competitor, and that drive to win motivates me and the entire 23XI team every week on the track. My passion for racing and our fans is immense, but the current structure of NASCAR is unjust to teams, drivers, sponsors, and fans alike. Today's actions demonstrate my commitment to advocating for a competitive environment where everyone can succeed.”
A NASCAR representative indicated that the organization does not comment on ongoing legal matters. NASCAR is headquartered in Daytona Beach, Florida.
What is a charter?
The charter system, established in 2016, introduced revenue sharing and various business elements for the premier motorsports series in the United States, ensuring 36 entries in every profitable Cup Series race. According to the lawsuit, of the 19 team owners who initially received charters in 2016, only eight remain active in the sport.
One of the teams that exited was Furniture Row Motorsports, which sold its charter for $6 million following the 2018 season, just a year after winning the Cup Series championship. The plaintiffs argue that this illustrates how the charter system has left teams without a viable path to profitability.
The original charters were valid from 2016 to 2020 and were automatically extended to last until December 31, 2024. As the expiration date approaches, teams have contended that the revenue sharing is inequitable and have called for a larger portion of the funds.
Bob Jenkins, owner of Front Row, has stated that he has never turned a profit since establishing his team in 2005. Despite winning the Daytona 500 in 2021 with driver Michael McDowell, he did not manage to break even that season.
With four sons and a desire to create a legacy for his family, Jenkins expressed his wish for a fair agreement.
“I have been part of this racing community for 20 years and couldn’t be more proud of the Front Row Motorsports team and our success. But the time has come for change,” Jenkins said. “We need a more competitive and fair system where teams, drivers, and sponsors can be rewarded for our collective investment by building long-term enterprise value, just like every other successful professional sports league.”
What are the teams seeking?
In the course of negotiations, the teams expressed a desire for increased revenue, a role in governance and rule-making, and a share of the profits NASCAR generates from the names, images, and likenesses of the participants.
Additionally, the teams requested that the charters be made permanent; however, France has declined this request.
The lawsuit states that NASCAR issued a take-it-or-leave-it proposal on Friday, September 6, just 48 hours prior to the start of the playoffs. It alleges that NASCAR pressured the teams to sign a lengthy agreement exceeding 100 pages or face the loss of their charters and the charter system itself unless “a substantial number of teams” consented.
The lawsuit claims, “The teams recognized that the costs associated with fielding a NASCAR car had escalated to a level that competing without the modest revenue sharing and stability offered by the charter system would be financially catastrophic for most, especially with the potential complete loss of their charter values if the system were to be abolished.”
Rick Hendrick, the most successful owner in NASCAR history, indicated that he signed the agreement only after being exhausted by the negotiations. 23XI Racing and Front Row initially resisted, but their reasons for doing so remained unclear until the court filing on Wednesday.
What allegations does the lawsuit make?
The lawsuit contends that NASCAR breached the Sherman Antitrust Act by obstructing any stock car racing team from participating in the circuit “without acquiescing to the anticompetitive conditions” it enforces.
“Confronted with a take-it-or-leave-it proposition and lacking alternative opportunities for premier stock car racing in the United States, most teams felt compelled to sign,” the lawsuit asserts. “One team characterized its signing as ‘coerced,’ while another claimed it was ‘under duress.’
“A third team stated that NASCAR ‘put a gun to our heads’ and we ‘had to sign.’ A fourth described NASCAR’s approach as reminiscent of a ‘communist regime.’ None of these teams were willing to disclose their identities due to concerns about potential retaliation from NASCAR.”
How did it reach this point?
NASCAR was established in 1948 by the late Bill France Sr. Since its inception, leadership has transitioned from his son, Bill Jr., to his grandson, Brian France, and currently to France Sr.’s second son, Jim. Ben Kennedy, the son of Bill Jr.’s daughter, Lesa, is poised to inherit the family legacy.
The lawsuit asserts that NASCAR operated under annual contracts until 2016, which offered no long-term security for any team. There was no assurance of entry into any Cup Series event or guaranteed prize money, leaving teams reliant on securing their own sponsorships.
This structure rendered it nearly impossible for any owner to sustain operations solely as a racing team without supplementary business ventures. The pursuit of sponsorship became a full-time endeavor, with teams often finding themselves in direct competition with NASCAR for financial agreements.
According to the lawsuit, teams experienced a “constant state of financial vulnerability,” which led to the downfall of some of the most successful organizations. It cites NASCAR Hall of Famer Jimmie Johnson, who has largely retired from driving and is now a co-owner of a new Cup Series team.
The lawsuit references Johnson’s perspective: “the best position is to be NASCAR, the second best is to be a driver, and the least favorable is to be a team owner.”