NASCAR Lawsuit: Michael Jordan & Co Question NASCAR’s Ultimatum Threatening 23XI & FRM’s Legal Leverage

23XI Racing, co-owned by basketball legend Michael Jordan and NASCAR driver Denny Hamlin, along with Front Row Motorsports, kicked off a massive confrontation with NASCAR. With a lawsuit on October 2 in North Carolina’s federal court, they claimed anti-competitive practices and antitrust laws violation. The lawsuit levelled serious allegations and stated that NASCAR has “used anti-competitive practices to prevent fair competition in the sport”.

For starters, they claim NASCAR reportedly bought up a majority of the premier racetracks, making them exclusive to their events. It also contends that NASCAR restricts teams from racing in other stock car events and retains ownership over the Next-Gen parts and cars, further tightening their grip on the sport. And recently, there has been a big update on the situation.

23XI Racing and FRM fighting to get the upper hand

But before we get to that, for the unversed: The teams had filed a preliminary injunction amid the lawsuit, which allows them to retain their charters—as the lack thereof could mean millions of dollars in financial setbacks with sponsorships already lined up beyond 2024. However, the stock car racing body filed a 22-page response, dated October 23, saying: “Plaintiffs’ requested relief would cause real harm to NASCAR and the 32 Charter holders. Teams must budget for next season, and NASCAR needs to calculate and communicate to teams the prize money available for each race. NASCAR cannot simply reissue 2025 Charters without affecting Charter teams and other stakeholders, especially since Plaintiffs’ refusal to sign the 2025 Charters increased prize amounts for Charter and open teams alike.”

“Plaintiffs’ Motion—an attempt to force NASCAR into a contract on Plaintiffs’ preferred terms—falls far short of meeting the demanding standard required for obtaining a mandatory injunction. The Motion seeks to change the status quo, not maintain it; is about money, not irreparable harm; and fails to show a likelihood of success on the merits. This lawsuit is not about protecting competition; it’s a bid by Plaintiffs to secure more money than they could through arm’s-length negotiations. The Motion should be denied.” And as per Bob Pockrass, 23XI Racing and Front Row Motorsports (FRM) have filed a response telling their side of the story…

According to Pockrass, the 23XI Racing/FRM team pointed out that the open team agreement specifically requires them to waive the right to pursue lawsuits like the one they’re currently involved in. Without it, they risk being sidelined from the race and losing their charters, which is a huge deal, especially when every point counts in the competitive world of NASCAR.

The argument from the teams is clear: they believe that granting the injunction wouldn’t cause any harm to NASCAR. Instead, it would simply maintain the current status quo of the 36 charter teams. Although the two teams have filed lawsuits against the governing bodies, they still want to continue racing in NASCAR. Both 23XI and FRM have hundreds of people working within the teams to ensure things run smoothly.

-23XI/FRM state open team agreement also requires them to waive right to pursue this type of lawsuit so injunction needed to race.
-Teams argue injunction wouldn’t harm NASCAR, just keep status quo of 36 charter teams.

Essentially, NASCAR had argued that the extraordinary circumstances needed for such an injunction simply aren’t present. They insisted that the issue revolves more around contract terms than antitrust laws. In their view, it’s a straightforward contract dispute rather than a legal battle that could shake the foundation of how things are run. However…

Michael Jordan is not one to sit on his hands

The legal drama between Michael Jordan and NASCAR is heating up, and it’s not a typical game of basketball. Jordan, along with attorney Jeffrey Kessler, claims that NASCAR and CEO Jim France are behaving like “monopolistic bullies” in their attempts to silence dissenters. Notably, Kessler is a renowned antitrust attorney who was involved in the creation of NFL’s free agency, securing equal pay for the USWNT, and creating the NIL (Name, Image, Likeness) system for college athletes. The defendants, NASCAR and its CEO and chairman Jim France, seem to have a steep challenge ahead.

Kessler said, “We can’t give you a specific, ‘This will do it.’ There must be significant change…No one is bringing this type of fight, this type of lawsuit, to move from a (Grade) D-plus deal to a D deal. That is not going to happen…If it’s going to get resolved before (a trial), it’s going to have to be because there’s real, meaningful change that gives these teams a fair chance to compete and earn a profit and invest in the sport and grow it.”

“To go into a charade of saying that there’s a space between NASCAR and the France family? There is no such space. How they’ve run it, where the money is really going, how it’s extracted, how the monopoly is being abused — all of that is going to be part of our discovery of the case,” the lawyer further opined as per The New York Times.

As for the iconic NBA star, he’s clear about what he wants. “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. 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,” he had said earlier.

NASCAR, however, is pushing back hard, arguing that the two teams are trying to use the antitrust process as a weapon to hurt the organization while avoiding the responsibilities of the charters they didn’t sign. Their legal filing states that the request for documents predating the four-year statute of limitations for antitrust claims is also off-base.

Kessler has countered these arguments, maintaining that the request for expedited discovery is completely reasonable and necessary to prove their case.