CHARLOTTE, N.C. (AP) — The two teams suing NASCAR asked a judge for a preliminary injunction Wednesday so they can compete next season under the charter system they are challenging as their antitrust case moves through federal court.
23XI Racing, which is owned by Michael Jordan, veteran driver Denny Hamlin and Curtis Polk, and Front Row Motorsports, owned by Bob Jenkins, sued NASCAR and chairman Jim France last week in the Western District of North Carolina. The two teams accused NASCAR of being “monopolistic bullies” after refusing to sign new charters proposed by the stock car series.
The charter system is a revenue-sharing model that is similar to a franchise in other professional sports. Although charters can be sold and leased, the charters have contractually binding terms, expiration dates and can be revoked by NASCAR. Teams fought to have them made permanent but NASCAR would not consider the issue and the newest extension runs through 2031.
23XI and Front Row allege in their suit that the agreement that goes into effect next season limits competition by unfairly binding teams to the series, its tracks and its suppliers. 23XI and Front Row were the only two organizations out of 15 that refused to sign; almost every other team has said they signed on deadline only because NASCAR threatened to do away with the charter system entirely.
A hearing was initially set for Oct. 16 in federal court in Charlotte, but NASCAR asked for a delay since its Daytona Beach, Florida, offices closed for Hurricane Milton. The judge on Thursday moved the hearing to Nov. 4.
NASCAR still has to respond to both the motion for expedited discovery and the motion for the preliminary injunction by Wednesday.
23XI and Front Row have hired Jeffrey Kessler, a top antitrust attorney who has represented the players in all four major professional North American sports. Kessler told The Associated Press that the two teams would sign the 2025 agreements if they receive a court order that would release them from a clause that prohibits teams from suing NASCAR.
“A court order will prevent (NASCAR) from enforcing that release term, and that way we can compete with the charters while we litigate against you going forward,” Kessler said. “We would sign them if they cannot enforce the antitrust release. If we don’t win the motion, then (the teams) will have to compete open.”
Jenkins told AP that the two teams stand to miss out on $45 million in combined revenue if they compete as un-chartered teams. But, he’s willing to do so for Front Row because he believes the case against NASCAR is winnable.
“We’re pretty confident about this lawsuit or we wouldn’t be doing it,” Jenkins said. “There’s a lot of money out there. I’m hoping NASCAR won’t fight the injunction and we can move forward.”
Polk, who is Jordan’s longtime right-hand man and part of the 23XI ownership group, told AP he hoped Wednesday’s filing “highlights for Cup teams, their drivers, employees, sponsors and fans how restrictive is the economic system that we operate under.”
“The system is what enabled a take-it-or-leave offer, coupled with the threat of losing our charters on September 6th,” he said.
NASCAR has not commented on the lawsuit and does not comment on pending litigation. The court filing included back-and-forth communications between 23XI and NASCAR President Steve Phelps, including a Sept. 18 letter in which he defended the charter proposal.
“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,” Phelps wrote to Jordan and Hamlin. “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.”
23XI and Front Row currently field two cars each in the elite Cup Series and have reiterated to AP they intend to compete in 2025 as three-car teams with or without the charters. Front Row in May purchased an additional charter from Stewart-Haas Racing and 23XI in August entered a purchase agreement with SHR for a charter.
Tyler Reddick of 23XI was the regular-season champion and he and Hamlin, who drives for Joe Gibbs Racing, head into Sunday’s playoff elimination race at Charlotte Motor Speedway still eligible for this year’s Cup title.
The latest filing asks for immediate access to documents and files from six NASCAR executives, three of whom are members of the series-owning France family. NASCAR was founded in 1948 by the late Bill France Sr. and is currently run by his son, Jim, while his granddaughter Lesa France Kennedy, and great-grandson, Ben Kennedy, have senior executive roles.
Kessler is also seeking documents from Phelps, chief operating officer Steve O’Donnell and Scott Prime, the senior vice president of global strategy.
NASCAR’s final offer was presented to the teams less than 48 hours before the September playoff-opening race at Atlanta Motor Speedway. Teams were initially given a deadline of one hour to sign the 100-plus page document, but after they balked, the deadline was extended until midnight.
“NASCAR’s dominant control over racing is not because of its superior skill or business acumen, but rather its history of exclusionary acts and restrictive agreements that have stifled competition through its monopoly power,” Kessler said. “We believe our expedited discovery requests of NASCAR and the France family will shed light on their anticompetitive practices and support a preliminary injunction ruling that 23XI and Front Row Motorsports have a legally protected right to race next year while our antitrust case proceeds in court.”
Among the items requested are documents surrounding NASCAR’s contracts with independently owned racetracks that have hosted Cup Series races since 2016; NASCAR’s acquisitions of International Speedway Corporation (ISC) and Automobile Racing Club of America (ARCA); and the charter agreement provisions that restrict teams from competing in non-NASCAR events and from using Next Gen parts and cars in non-NASCAR events.
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AP auto racing: https://apnews.com/hub/auto-racing
Jenna Fryer, The Associated Press