Michael Jordan's 23XI Racing and Front Row Motorsports sue NASCAR over charter deal
23XI Racing and Front Row Motorsports, the two NASCAR Cup Series organizations that have not signed the charter agreement that begins in 2025, have filed an antitrust lawsuit against NASCAR and its chairman Jim France.
"By blocking the formation or growth of any competing premier stock car racing series, NASCAR has been able to force the teams to accept take-it-or-leave-it economic conditions in order to compete at the highest level of stock car racing in the United States," the complaint states.
"The France family has realized monopoly profits through its ownership and control over the National Association for Stock Car Auto Racing (NASCAR), which has exploited its economic power as the sole premier stock car racing organization in the United States."
The filing, in federal court in North Carolina, is not necessarily a surprise. Noted antitrust attorney Jeffrey Kessler — who has been instrumental in college athletes being able to be paid for their name image and likeness – represents the teams.
Basketball icon Michael Jordan co-owns 23XI Racing with driver Denny Hamlin, and they just built a 114,000-square-foot race shop and fields cars for Tyler Reddick and Bubba Wallace. Restaurant owner Bob Jenkins owns Front Row and fields cars for Michael McDowell and Todd Gilliland. Both organizations are expecting to expand to three cars in 2025 with the acquisition of a charter from Stewart-Haas Racing.
"Everyone knows that I have always been a fierce competitor, and that will to win is what drives me and the entire 23XI team each and every week out on the track," Michael Jordan said in a statement. "I love the sport of racing and the passion of our fans, but the way NASCAR is run today is unfair to teams, drivers, sponsors, and fans.
"Today's action shows I'm willing to fight for a competitive market where everyone wins."
NASCAR is a privately-held company owned by the France family, primarily Jim France and his niece, Lesa France Kennedy.
A NASCAR spokesman said the sanctioning body had no immediate comment as the suit was just filed Wednesday morning and it was reviewing the complaint.
In a teleconference Wednesday morning with reporters, Kessler said that this case has similarities with other sports antitrust litigation where a fundamentally unfair system has been created for the participants. But this case also has a major difference – the France family (one small group of individuals) controls NASCAR.
"There is no other major sport where one family has run that sport as its own personal fee stub and piggy bank the way that NASCAR has been run," Kessler said.
"We will see what impact that has in terms of how they try to defend themselves. We will see what impact that has in terms of whether it's possible to settle this case or whether we have to take it all the way through trial -- either way, we're prepared to do what's necessary to effectuate change."
One of the provisions in the 2025 charter agreement is for teams to release NASCAR of antitrust claims. The teams are asking for a preliminary injunction for the ability to compete in 2025 as chartered teams while pursuing the lawsuit.
"We share a passion for racing, the thrill of competition and winning," 23XI and Front Row said in a statement. "Off the race track, we share a belief that change is necessary for the sport we love.
"Together, we brought this antitrust case so that racing can thrive and become a more competitive and fair sport in ways that will benefit teams, drivers, sponsors, and most importantly, fans."
Both teams said they would continue with their 2025 plans.
"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," the lawsuit states. "That moment has now arrived."
The lawsuit is a culmination of a couple of years of frustration over the charter renewal negotiations. NASCAR implemented the charter system in 2016, awarding 36 charters to teams. The charters – NASCAR's version of a franchise – guarantee a spot in the field every week as well as a base amount in purse money plus additional payouts based on the past three-year performance of the charter and championships.
That deal with the teams runs through the end of this year. The teams have been negotiating the last couple of years with NASCAR, which initially engaged in talks with a committee formed of team executives before bypassing the committee and negotiating directly with each team. On Sept. 6, according to the lawsuit, NASCAR sent the teams its final offer at 5 p.m. and gave them an hour to sign it. It then allowed them until midnight to sign it.
Front Row and 23XI were the only ones not to sign. The lawsuit alleges that teams were afraid with losing their charters. The charter prices have skyrocketed in recent years, with Spire Motorsports reportedly paying nearly $40 million for one last year.
Kessler argues the fact other teams signed the charter agreement doesn't decrease the validity of the claims made by 23XI and Front Row.
"In every antitrust case, the victims are taking what they can get," Kessler said. "The players who lack free agency would agree to contracts.
"It didn't mean they weren't going to play, whether or not they were paid fairly or not. … Sometimes there has to be those who have the courage, the resources, the willingness to stand up and say, ‘We're not going to take it anymore.' That will benefit all of them."
The lawsuit claims that because NASCAR owns a majority of the tracks and its contracts with tracks that field its events prohibit similar stock-car races as well as the fact that NASCAR requires the teams to buy parts and pieces for the car from specific vendors, that the teams' revenue is less than what they could obtain in a competitive market. It also claims that the new agreement also takes control of team intellectual property rights. The teams also want permanent charters (the 2025 agreement reportedly is a seven-year deal).
"It has become evident that this antitrust litigation is the only way to free up the market for competition and enable Plaintiffs, and other stock car racing teams, to obtain the fair charter terms that will be realized in a competitive market for their services as top-tier stock car racing teams," the lawsuit states.
"A competitive market will enable the teams to earn the reasonable profits that are necessary for them to reinvest in their businesses and create an even more exciting product."
Under the current television deal, teams get 25 percent of revenues while tracks get 65 percent and NASCAR gets 10 percent. The tracks and NASCAR then contribute additional money into the purse. The teams have argued they should receive a higher overall amount.
"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," Front Row Motorsports owner Bob Jenkins said in a statement. "But the time has come for a change.
"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 success professional sports league."
23XI co-owner Curtis Polk said the lawsuit isn't just about the charter agreement.
"Today's action is more than just about charters," Polk said in a teleconference with reporters. "Due to their unprecedented power and willingness to exert it, the France family has dictated every aspect of stock-car racing in America, from the gas and tires we use to the parts we have to purchase for the race cars, to the schedule, rules tracks we race at, fees we have to pay to race and how our races are consumed by the public.
"This control has caused a depressing economic impact on teams profitability, their enterprise value, as well as driver, crew and race shop salaries."
Bob Pockrass covers NASCAR for FOX Sports. He has spent decades covering motorsports, including over 30 Daytona 500s, with stints at ESPN, Sporting News, NASCAR Scene magazine and The (Daytona Beach) News-Journal. Follow him on Twitter @bobpockrass.
