The antitrust lawsuit brought Wednesday by 23XI Racing, which Michael Jordan co-owns, and Front Row Motorsports slams NASCAR and the family of NASCAR CEO Jim France as “monopolistic bullies.”
But expect NASCAR to launch a robust defense that depicts the plaintiffs’ legal arguments as distorting reality and ignoring NASCAR’s history as a first mover that removed roadblocks, generated a multibillion-dollar industry and created lucrative opportunities for drivers, teams and owners alike.
At the heart of the lawsuit is a debate over charters, which are central to NASCAR functioning like a pro sports league. Charters guarantee teams a starting position in NASCAR-sanctioned races while restricting their capacity to compete in other circuits. The core questions of the antitrust analysis: Do those charters promote economic competition by enhancing NASCAR’s popularity and generating professional opportunities for drivers and their teams? Or do they diminish competition by reducing chances to race outside the NASCAR system?
23XI Racing and Front Row Motorsports say they are the only two racing teams that did not sign NASCAR’s 2025 charter agreement before a deadline in September. As described in the complaint, the charter agreement contains a release clause (sometimes in law called a waiver of recourse clause) that, as a condition of obtaining a charter, compels a signing team to release any potential legal claims against NASCAR. Such clauses are used in pro leagues in ownership agreements to avert potential litigation.
The plaintiffs contend that NASCAR and co-defendant Jim France, who is NASCAR’s CEO, chairman and executive vice president, have violated Section 1 and Section 2 of the Sherman Act.
Section 1 prohibits competing businesses from unreasonably restraining competition in a relevant market. Here, the defendants allegedly conspired with co-conspirators to negotiate exclusive contracts for sanctioning rights to host Cup Series races. They are also accused of imposing “unlawful exclusive dealing provisions terms” on owners of racetracks as a condition of being able to host Cup Series events.
As depicted by the plaintiffs, the exclusive dealing provisions contractually block racetrack owners from hosting other events, thus diminishing professional opportunities for teams and constraining the racing market. Similarly, the plaintiffs charge that the defendants effectively “coerced” racing teams to accept the charter terms, which include noncompete restrictions, through the threat of exclusion from key races.
23XI Racing and Front Row Motorsports’ legal team, which includes Danielle Williams and Jeffrey Kessler of Winston & Strawn, insist that even if NASCAR contends contractual restrictions are economically essential and have made NASCAR highly popular with fans, “there are significantly less-restrictive means” to accomplish those objectives. Such an argument goes to the heart of antitrust analysis, wherein pro-competitive and anti-competitive aspects of business dealings are weighed and are less likely to survive antitrust scrutiny if the plaintiff can establish the defendant has rejected viable, less-restrictive methods.
To advance an antitrust claim, the plaintiffs will need to establish NASCAR’s dealings harm a relevant market. The plaintiffs argue the relevant geographic market is the United States since only the U.S. has a premier stock racing series. The plaintiffs also maintain the relevant product market is premier stock car racing teams, which compete in a circuit. While NASCAR competes with Formula 1 and IndyCar for the attention of racing fans and accompanying TV, sponsorship and other professional opportunities, the plaintiffs insist that because stock car racing is a different form of automobile racing, it is not in the same market for antitrust purposes.
The complaint also raises a claim under Section 2 of the Sherman Act. Section 2 prohibits illegal monopolies, as well as illegal monopsonies, which are like monopolies except instead of having too much control over the sale of a good or service, the defendant is accused of having too much control over the buying of goods and services—in this case, the buying of the services of premier stock car racing teams.
Monopsony claims are not new in sports antitrust litigation. In recent years they have been raised by MMA fighters against the UFC and golfers against the PGA Tour, with both sports organizations accused of possessing too much control over the buying of services performed by elite athletes.
Here, NASCAR is accused of obtaining monopsony power by becoming “the only premier stock car racing series in the United States.” NASCAR has allegedly used exclusionary contract provisions to suppress competition and compel leading stock car racing teams to accept onerous terms.
NASCAR is also depicted as utilizing purchasing and acquisition schemes to gobble up the landscape for stock car racing. For example, in 2019, NASCAR acquired International Speedway Corporation for $2 billion. The move, the plaintiffs insist, “gave NASCAR full control over 13 of the country’s premier racetracks, including Daytona International Speedway and Talladega Superspeedway” and “substantially foreclosed any potential new competitor from being formed.”
NASCAR’s Potential Response
A complaint is not a neutral retelling of facts; it presents only one side of an argument and is, by its very nature, biased. In the coming weeks, NASCAR and France will answer the complaint and seek its dismissal.
In addition to disputing the plaintiffs’ narratives and allegations, expect a series of defense arguments.
First, NASCAR could argue it is a single entity, and because Section 1 claims require competing businesses joining hands, NASCAR can’t violate Section 1. Likewise, while France is a co-defendant of NASCAR in this litigation, he is obviously part of NASCAR and doesn’t act independently from NASCAR.
NASCAR is structurally different from the NFL or NBA, both of which feature franchises that compete on and off the field but also join hands to limit how they compete, including in the sale of broadcasts (a key topic in the ongoing NFL Sunday Ticket antitrust litigation). As leagues, the NFL and NBA operate at the behest of the franchises and would not function as standalone businesses. In other words, the NFL without its 32 teams wouldn’t be an entity. In contrast, the France family owns NASCAR (for more on the single entity defense in sports antitrust claims, please read my law review article in the Yale Law Journal).
The plaintiffs notably include non-defendant and unspecified “co-conspirators” as contributing to NASCAR’s alleged illegal acts. The inclusion of co-conspirators is likely in part to complicate a single entity defense, since it suggests multiple entities coordinated alleged misdeeds.
The plaintiffs are likely to also argue that, even if NASCAR is a single entity, a single entity defense ought to fail since NASCAR teams are independently owned. This nuance reflects the unique structure of NASCAR in that although car “NASCAR teams” are unlike “NFL teams” or “NBA teams,” they similarly compete against each other and also, at times, coordinate activities.
NASCAR could also attempt to debunk the Section 1 claim by portraying charters and its other business activities as economically essential. These measures, NASCAR might assert, have engineered a highly marketable product that has created invaluable opportunities for teams, including 23XI Racing and Front Row Motorsports.
To that point, the plaintiffs highlight that “NASCAR’s broadcast deals have been worth $23.1 billion since 2001” to imply that NASCAR has made out like bandits compared to the teams. But NASCAR might turn that comment around to show how its business decisions have created an incredibly popular product with fans and media companies. Also, charters, like exclusivity clauses in UFC and PGA Tour contracts, ensure that high-profile participants will participate in certain events. That dynamic makes those events more attractive to media and broadcasting companies, who become more willing to offer more money to televise those events. Expect NASCAR to stress that the charter system includes standards and benchmarks that promote quality in the sport, which in turn makes the sport more popular and marketable.
In a similar vein, NASCAR can try to tackle the Section 2 monopsony claim by disputing it has no rival. NASCAR can argue it not only competes with Formula 1 and IndyCar but also other sports and entertainment providers, all of which vie to capture fans’ attention and money.
NASCAR is likely to attribute its success not to anticompetitive practices but to its historical role as a first mover in the industry. NASCAR’s modest origins in the 1940s reflected the initiative and risk-taking of Bill France Sr. and opened doors for other car racing businesses. NASCAR will insist its popularity is a function of providing a superior product.
Another likely defense is that the claims are barred by an arbitration provision or are subject to release/waiver of recourse language. The complaint acknowledges that the charter agreement from 2016 includes an arbitration provision that, NASCAR could assert, requires the plaintiffs to first arbitrate their claims before they can turn to the courts. Arbitration is a private and confidential dispute resolution process that can last months or years. When sophisticated businesses agree to arbitrate, judges are often inclined to dismiss lawsuits attempts to bypass arbitration.
The complaint contends the provision ought not to apply to antitrust claims. Even if the arbitration provision partially applies, the complaint maintains, it should not prevent the court from issuing an injunction against NASCAR as such a remedy (the complaint contends) is contemplated in the same agreement.
NASCAR has defeated other antitrust lawsuits over its market dominance. In Kentucky Speedway v. NASCAR (2009), the U.S. Court of Appeals for the Sixth Circuit rejected an antitrust lawsuit depicting NASCAR as illegally preventing the plaintiff from hosting the Sprint Cup. The court noted that NASCAR is a sports organization that can pick its hosts to maximize NASCAR’s business objects.
2311 Racing & Front Row Motorsports v. NASCAR & France was filed in a North Carolina federal court and has been assigned to U.S. District Judge Frank D. Whitney and U.S. Magistrate Judge Susan C. Rodriguez.
The plaintiffs seek a preliminary injunction that would prohibit NASCAR from enforcing the release clause described above and unspecified monetary damages that would be decided as part of a jury trial. While the decision on a preliminary injunction could happen within months, absent a settlement, the case could remain on the docket for years.
