Two NASCAR teams have filed an antitrust lawsuit against the series, alleging that NASCAR operates as a monopoly designed to benefit the France family. Some particular concerns have come to a head during the NASCAR charter negotiations — and now it’s going to court.
Front Row Motorsports and 23XI Racing — the team co-owned by current racer Denny Hamlin and basketball legend Michael Jordan — have joined forces with star lawyer Jeffrey Kessler and intend to make waves in NASCAR.
NASCAR charter dispute: What’s the problem?
Since 2016, NASCAR has operated with a “charter” system. A certain number of charters were distributed to teams; those charters effectively provide those teams with the right to compete in every NASCAR event, so long as they met a certain standard of performance.
The benefit of the charter is that it provides teams with value outside of its physical assets.
Prior to the charter system, if a team folded, it could only attempt to recoup some value by selling off its physical assets — often for a discounted rate due to those assets being used. It didn’t make for a particularly glorified end to many teams, and the folks getting out of the series were often losing money in the process.
The charter provided a non-tangible but still important asset that could also be sold off. Charters have increased in value to somewhere around an estimated $20 million per charter, and it would guarantee the charter’s buyer entry into every NASCAR race.
Further, it allowed NASCAR — which is owned and operated by a single family — to more easily share some revenue.
All throughout 2024, though, NASCAR has been engaged in contentious charter negotiations with its teams. Thirteen of NASCAR’s 15 teams signed the multiyear charter extension. Two did not.
There was a lot of pressure for teams to sign this agreement. Team owners told The Athletic that NASCAR claimed that any holdouts could lose their charters, and that if a majority of teams didn’t sign the agreement, then NASCAR would scrap the charter system entirely. However, some owners allegedly signed the document extension simply because they were tired of hearing about it.
The only two holdouts were 23XI Racing and Front Row Motorsports.
Both teams felt that, although NASCAR was offering a larger piece of the financial pie with this charter extension, their other demands were going unmet.
These are the two teams involved in the antitrust lawsuit against NASCAR.
What does the lawsuit against NASCAR allege?
On October 2, 2024, a complaint was filed with the United States District Court in the Western District of North Carolina. Plaintiffs 23XI Racing and Front Row Motorsports — represented by lawyer Jeffrey Kessler — demanded a jury trial after alleging that NASCAR and Jim France are effectively operating a monopoly of stock car racing in America.
“This is a case about the unlawful monopolization of premier stock car racing by the France family in order to enrich themselves at the expense of the premier stock car racing teams that fans come out to see and that sponsors and broadcasters value,” the lawsuit reads in its introduction.
“The France family has realized monopoly profits through its ownership and control over the National Association of Stock Car Auto Racing (NASCAR), which has exploited its economic power as the sole premier stock car racing organization in the United States.”
The introduction to the suit lists multiple concerns that it alleges constitute antitrust behavior on the part of NASCAR and the France family, including:
- Acquiring race tracks, then exerting ample control over the racing that can take place on those circuits
- Restrictions that prevent stock car teams from racing their machinery outside of NASCAR
- The requirement that teams spend money on fielding the “Next Gen” race cars, though those cars are effectively owned by NASCAR and not the teams themselves
- Purchasing ARCA (the Automobile Racing Club of America), one of the only other stock car racing series in the United States — and then moving ARCA events to NASCAR-owned tracks
- Developing rules that state no team can compete in NASCAR without agreeing wholeheartedly to NASCAR’s anticompetitive terms
- Rejecting requests from teams for changes to the charter agreement ruleset, then implementing the charter agreement anyway
Further, the lawsuit states that NASCAR’s status as the premier stock car racing organization in America is not the result of “the superior product or skill of NASCAR’s owners.” Rather, “it is the product of the anticompetitive and exclusionary practices that NASCAR has employed to protect its racing series, known as the Cup Series, from having to compete with any other premier stock car racing series.”
Understanding charters:
👉 Explained: IndyCar’s charter system, and what it means for the business of racing
👉 IndyCar charter questions, answered: Investment, job opportunities, cost
Who is lawyer Jeffrey Kessler?
Even if you aren’t familiar with the name Jeffrey Kessler, you’ll inevitably be familiar with the cases he’s litigated. He’s represented major clients like Panasonic, the National Football League, the United States Women’s National Team, and more.
Simply put, this is a man who has made a career out of representing sports teams and leagues.
Among his accomplishments are:
- Securing the free agency rule in the NFL
- Securing equal pay for the US’s women’s soccer team
- Struck down NCAA rules barring player compensation
- Representing Tom Brady in the “Deflategate” scandal
- Representing Oscar Pistorius, enabling him to compete against non-disabled athletes in the Olympics
In effect, if you’re a sportsperson or team, and you feel that you’ve been systemically wronged, then you want to call Jeffrey Kessler. There’s no one like him when it comes to the crossover between sports and litigation.
What does this lawsuit mean for NASCAR?
Right now, it’s far too early to make any predictions regarding how this antitrust lawsuit will impact NASCAR overall. NASCAR has declined to comment on the situation, and we really won’t know what impact it will have until some kind of settlement is reached.
We also don’t know what kind of representation NASCAR will employ in this case, nor do we know what kind of countermeasures the series may take.
That being said, we can expect a few different things as this suit progresses.
Most compelling will be what’s called the discovery process. During this time, NASCAR and the France family will have to turn over to the courts detailed documents outlining the financials of the stock car racing series.
These documents will then be used when — or if — the case goes to court, in front of a jury. Both the Plaintiff and the Defendant will be able to refer to these documents to support their arguments, during which time an ample amount about the well-concealed finances of NASCAR will be revealed to the world.
Jurors will then be tasked with determining a verdict.
However, there is always a possibility that this case is settled outside of the courtroom, though it sounds as if the Plaintiffs are determined to take this case to a panel of jurors for ultimate say.
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