Antitrust Trial Looms: 23XI Racing and Front Row Motorsports Sue NASCAR Over Charter System

The future of premier stock car racing in North America hangs in the balance as a significant antitrust trial involving 23XI Racing, Front Row Motorsports, and NASCAR is set to commence imminently. The legal battle, initiated by 23XI Racing and Front Row Motorsports, alleges that NASCAR has engaged in anti-competitive practices designed to maintain a monopsony in the top tier of stock car racing. A monopsony describes a market structure where there is a single buyer for a particular service, in this case, NASCAR being the alleged sole purchaser of premier racing teams’ participation.

The lawsuit, filed on October 2, 2024, in the Western District of North Carolina, centers on the NASCAR charter system, a framework that governs the business and competition of the Cup Series. 23XI Racing, co-owned by basketball legend Michael Jordan, alongside veteran driver Denny Hamlin and longtime associate Curtis Polk, and Front Row Motorsports contend that NASCAR has implemented contractual restrictions, including non-compete clauses with both teams and tracks, that stifle competition. Specifically, Section 13 of the charter agreement, which includes a "no-sue" provision, is cited as a violation of the Sherman Antitrust Act. Furthermore, Section 6 of the charter documents contains a non-compete clause intended to prevent teams from participating in rival series, although exceptions are made for entities such as Formula 1, IndyCar, World of Outlaws, and the CARS Tour.

According to 23XI and Front Row, represented by lead attorney Jeffrey Kessler, these alleged anti-competitive actions are intended to suppress the revenue received by teams from NASCAR and prevent other entities from acquiring their services in the marketplace. The plaintiffs also point to NASCAR’s acquisitions of the ARCA Racing Series and its merger with track-owning sister company International Speedway Corporation as strategic moves to solidify its alleged monopsonistic position. The teams also take issue with the current, fourth-year NextGen car, arguing that NASCAR controls its base cost through a single-source supply chain, with components only available through vendors approved by the sanctioning body.

The genesis of this lawsuit lies in the refusal of 23XI and Front Row to sign the final charter agreement extension offered by NASCAR, following nearly three years of often contentious negotiations. The charter system, established in 2016, provides teams with a guaranteed starting spot in Cup Series races and a share of the series’ purse. The protracted negotiations revolved primarily around financial terms and the future of the charters themselves.

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Teams sought a greater percentage of NASCAR’s revenue from its upcoming broadcast rights agreements with major networks and streaming services. Additionally, they desired their charters, which have shown increasing market value, to become permanent assets rather than assets subject to renegotiation every seven years. Disputes also arose concerning NASCAR’s use of a team’s intellectual property and broader governance matters.

NASCAR reports that 13 of the 15 organizations ultimately signed the 2025-2031 charter agreement, citing a 62 percent increase in payouts compared to the previous agreement, which NASCAR attributes to new revenue from broadcast rights. The sanctioning body also claims that teams received a total of $50 million that previously went to tracks under the 2016 agreement. However, the plaintiffs argue that the overall increase amounts to only a 3-4 percent annual rise over a 15-year period between 2016 and 2031. This discrepancy in financial interpretation contributed to 23XI and Front Row’s decision to file suit less than a month after the agreement’s finalization.

NASCAR’s primary defense, as articulated by lead attorney Christopher Yates, is that 23XI and Front Row have not brought their antitrust claim in good faith. Instead, NASCAR contends that the lawsuit is a tactic to gain leverage in negotiations, characterizing it as "negotiation through litigation." The sanctioning body argues that it has not restrained competition and, in fact, has increased the enterprise value of owning Cup Series teams since the charter system’s inception. NASCAR highlights that the value of a single entry has risen from approximately $1 million to upwards of $50 million in recent market transactions. This increase, NASCAR asserts, is a direct result of its leadership enhancing the value for charter holders. The sanctioning body plans to argue that 23XI and Front Row cannot simultaneously claim anti-competitive behavior while anticipating charter values to reach $200 million, as reportedly believed by Michael Jordan.

Furthermore, NASCAR intends to argue that both 23XI and Front Row have previously agreed to terms they now deem anti-competitive and illegal. Both teams have purchased charters from other organizations over the past decade without previously raising concerns about the legality of specific charter provisions until the recent negotiations. NASCAR will likely assert that exclusivity and non-compete clauses are standard and legal business practices in sports, necessary for effective marketing and promotion of events to fans and broadcasters without creating confusion in the broader sports market.

Efforts to resolve the dispute through settlement have so far proven unsuccessful. The parties were mandated by the court to engage in settlement mediation over the summer. A session held in New York City on August 5, 2025, with former National Basketball Association Chief Legal Officer Jeffrey Kessler serving as mediator, lasted approximately one hour and yielded no progress. Subsequently, NASCAR petitioned for a court-mandated mediation session, which took place over two days in October. While Judge Bell described the parties as engaging "in good faith," the mediation ultimately faltered over the issue of legal fees, though reports suggest some agreement was reached on the concept of charter permanency.

The trial is scheduled to begin with jury selection on Monday and is expected to last for ten days, spread across two weeks. The proceedings will not be broadcast, and reporting will be limited to observers’ handwritten notes. Both sides have submitted extensive documentation, with 23XI and Front Row filing 858 exhibits and NASCAR listing 961. The witness lists remain private but are expected to include prominent team owners, executives, and industry experts.

The case will be heard by a six-person jury, requiring a unanimous decision for Judge Bell to issue a remedy. The burden of proof rests with 23XI and Front Row, who must convince the jury of a "preponderance of the evidence," meaning their claims are more likely than not to be true. The plaintiffs are seeking over $300 million in damages, with the jury determining the final amount, which can only cover losses incurred over the past four years.

Judge Bell possesses broad authority in determining antitrust remedies. He could potentially triple the damages awarded, a measure intended to penalize egregious conduct. Additionally, he could order NASCAR to divest itself of certain tracks, dismantle the single-source car supply system, eliminate exclusivity clauses, or fundamentally alter the charter system itself.

An often-overlooked aspect of a potential 23XI and Front Row victory is that it does not automatically guarantee the return of their charters. Following a preliminary injunction appeals decision earlier this year, both teams lost their chartered status. Their damages claim includes the loss of these charters. While Judge Bell has the power to rule broadly, it appears unlikely that the teams could simultaneously receive substantial monetary compensation and have their lost charters reinstated, as NASCAR could argue it cannot be compelled to do business with entities it does not wish to.

Judge Bell has previously indicated an openness to viewing the current structure of the charter system as potentially illegal. This sentiment has prompted the 13 non-party charter-holding teams to submit affidavits urging a settlement between the parties to protect their own significant investments in the system.

Should NASCAR prevail, 23XI and Front Row, without charters and potentially facing a ruling that deems the charter system illegal, could face closure by the end of the 2026 season. NASCAR would then have the option to sell the six suspended charters to other interested parties, a process that had already seen offers before Judge Bell placed a hold on further transactions pending the trial’s outcome.

Regardless of the federal district court’s decision, an appeal to the Fourth District of Appeals in Richmond, Virginia, is highly probable, with the losing party potentially petitioning the United States Supreme Court.

Adding another layer of complexity, NASCAR filed a countersuit against 23XI and Front Row, along with Curtis Polk, accusing them of anti-competitive behavior and forming an illegal cartel to coerce NASCAR into accepting unfavorable charter terms. This countersuit was dismissed at the summary judgment stage by Judge Bell, but NASCAR has also indicated its intent to appeal that dismissal.

In essence, the upcoming trial marks not the definitive end of this dispute, but rather a significant juncture in a protracted legal and business conflict. Unless a settlement is reached at any point, even after a jury verdict, the outcome of this trial will undoubtedly reshape the landscape of professional stock car racing.