CHARLOTTE, N.C. — A significant legal clash involving Michael Jordan and NASCAR is set to unfold in federal court starting Monday. This jury trial might have far-reaching implications for the nation’s top motorsports league.
The antitrust allegations initiated by Jordan’s 23XI Racing, alongside Front Row Motorsports, have revealed troubling private messages, financial details about NASCAR, and pronounced tensions among various figures in the sport.
Denny Hamlin, a three-time Daytona 500 champion and co-owner of 23XI along with Jordan, recently expressed his frustration over social media. He hinted he might be walking away from racing following the Cup Series championship he narrowly missed about a month ago. “Our fans have been brainwashed by the (NASCAR) buzz for decades,” he stated. “From Monday morning, the lies are over. It’s time for truth. It’s time for change.”
NASCAR Commissioner Steve Phelps remarked that efforts had been made to settle the lawsuit before the trial commenced.
What is the lawsuit about?
This lawsuit stems from 23XI Racing, co-owned by Michael Jordan, Hamlin, and Jordan’s longtime business manager, Curtis Polk. They are joined by Front Row Motorsports, which won the Daytona 500 in 2021. These two teams, out of 15, refused to renew their charters with NASCAR at the conclusion of 2024.
All teams have been engaging in negotiations for better charter terms for over two years. However, the agreements reached did not meet their expectations, leading 23XI and Front Row to claim that NASCAR operates as a monopoly, prompting their antitrust lawsuit.
What is a Charter?
The charter system, established in 2016, functions like a franchise model found in many professional sports leagues. Holding a charter guarantees a team a spot in 40 races each season and a predetermined payout from the weekly prize money.
Despite holding a charter, these teams feel the revenue model isn’t sustainable. They sought mainly a permanent charter, a larger revenue share, and a say in governance.
Feeling that NASCAR’s latest charter agreement fell short, both teams opted not to sign. They argue that NASCAR holds excessive control over the racing series through exclusivity clauses, owning most tracks on the Cup schedule, and managing the rules and regulations.
23XI and Front Row are currently pursuing compensation from NASCAR to cover legal fees and financial losses incurred this year from not being chartered, in addition to losses related to the lawsuit itself.
NASCAR defense
NASCAR, which has been around for 76 years, insists it hasn’t breached any antitrust laws. They argue they haven’t disrupted trade practices outside of standard business methods.
The organization points to increased payments in the 2025 charter contract as evidence of avoiding anti-competitive behavior. NASCAR also allows cars to register as “open teams,” giving a chance for participation in four non-charter qualifying spots. Despite both 23XI and Front Row being open teams, they incurred millions in costs.
During the pre-trial discovery, it came to light that NASCAR recorded over $100 million in revenue in 2024.
Behind the scenes drama
The discovery process was challenging for both NASCAR and the teams, exposing unfortunate private communications among NASCAR executives and executives from both sides.
Phelps, for example, disparaged NASCAR Hall of Famer Richard Childress, calling him derogatory names in conversations with other executives. At one point, there were statements about needing to “breed back and whip” Childress because he “owes everything to NASCAR.”
Another executive remarked that NASCAR fans were “illiterate,” while some figures criticized Hall of Fame driver Tony Stewart’s summer short-track series, SRX, threatening to eliminate it due to involving NASCAR drivers.
Who will be in court?
NASCAR is hoping to call upon influential team owners like Rick Hendrick and Roger Penske, though neither appears keen to testify. Both have sought motions to avoid being called to the stand, asserting that any inquiry should focus solely on the Charter.
These two are part of a large group of owners backing the charter system in solidarity with NASCAR. However, some team owners still recognize that the 2025 charter contract doesn’t fulfill all their needs.
NASCAR has also requested that Polk and Hamlin from 23XI be restricted from court prior to their testimonies, with no decision made as of Sunday evening.
Jordan, while a significant figure in this case, was excused from attending court according to all jurors. Representatives from both teams indicated that he and Jenkins are the primary faces of the lawsuit.
What are some results
Even if the trial culminates in a ruling followed by an appeal, the matter could be resolved outside of court at any time.
If 23XI and Front Row prevail, a jury would determine the damages, and Judge Kenneth Bell could adjust that sum, possibly tripling it. The judge would also take on the task of dismantling any monopoly uncovered.
NASCAR faces potential drastic measures, including being compelled to sell the sport to the French family, divesting ownership of tracks, or even abolishing the charter system altogether in favor of permanent charters.
If NASCAR wins, it’s unlikely the future will be bright for 23XI and Front Row, as they may not exist beyond 2026, with their pending charters likely being sold to new owners. Recent charters have fetched around $45 million, and there’s been interest from various potential buyers, such as private equity firms.
