NASCAR Faces Antitrust Trial: 23XI Racing and Front Row Motorsports Allege Anti-Competitive Practices

A high-stakes antitrust trial involving NASCAR, 23XI Racing, and Front Row Motorsports is set to commence, potentially reshaping the landscape of premier stock car racing in North America. The legal battle, initiated by 23XI Racing and Front Row Motorsports, centers on allegations that NASCAR has engaged in anti-competitive practices to maintain a monopsony, or single-buyer, control over top-tier stock car racing teams. The trial, scheduled to begin with jury selection, is expected to run for ten days over two weeks, with significant implications for the sport’s economic structure and governance.

The legal action was formally filed on October 2, 2024, in the Western District of North Carolina. At the heart of the dispute lies the charter agreement, a foundational document that governs the business and competitive aspects of the NASCAR Cup Series between the sanctioning body and its participating teams. 23XI Racing, co-owned by basketball legend Michael Jordan, alongside driver Denny Hamlin and longtime associate Curtis Polk, and Front Row Motorsports, have accused NASCAR of imposing contractual restrictions, including non-compete clauses with both teams and tracks, that they claim impede fair competition.

Specifically, Section 13 of the charter agreement includes a "no-sue" provision, which the plaintiffs argue violates the Sherman Antitrust Act. Additionally, Section 6 contains a non-compete clause designed to prevent teams from participating in rival racing series, though NASCAR has outlined exceptions for entities such as Formula 1, IndyCar, World of Outlaws, and CARS Tour. Lead attorney for 23XI and Front Row, Jeffrey Kessler, contends that these measures are intended to suppress revenue for teams and prevent them from offering their services to alternative markets. The plaintiffs also point to NASCAR’s acquisition of the ARCA Racing Series and its merger with track-owning subsidiary International Speedway Corporation as strategic moves to solidify its monopsonistic position. Furthermore, the teams are challenging the fourth-generation NextGen car, arguing that NASCAR controls base costs through a single-source supply chain for components, forcing teams to purchase from NASCAR-approved vendors.

The lawsuit emerged after 23XI Racing and Front Row Motorsports refused to sign the final charter agreement extension offered by NASCAR, following nearly three years of often contentious negotiations. These negotiations primarily revolved around the financial terms of the charter system, particularly the percentage of revenue that charter-holding teams would receive following NASCAR’s current broadcast rights agreements with FOX, NBC, Turner Sports, and Amazon Prime. Teams also sought to transform their charters from assets requiring renegotiation every seven years into permanent, increasingly valuable assets. Disputes also arose concerning NASCAR’s use of a team’s intellectual property and broader governance issues.

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NASCAR asserts that the recently ratified charter agreement, signed by 13 of the 15 organizations for the 2025-2031 period, represents a 62 percent increase in revenue for teams, with all new revenue stemming from the new broadcast deals. The sanctioning body also claims that $50 million previously allocated to tracks has been redirected to teams since the 2016 charter agreement. However, the plaintiffs argue that this increase amounts to only a 3-4 percent annual rise over a 15-year span, from 2016 to 2031.

NASCAR’s primary defense, led by attorney Christopher Yates, posits that 23XI Racing and Front Row Motorsports have not brought their antitrust claim in good faith but rather as a tactic to gain leverage in negotiations. The sanctioning body maintains that it has not restrained competition and has, in fact, increased the enterprise value of owning Cup Series teams since the charter system’s inception in 2016. Yates has argued that it is illogical for NASCAR to be acting anti-competitively while simultaneously increasing payouts to teams. The value of a single Cup Series entry has reportedly risen from approximately $1 million to upwards of $50 million, a valuation NASCAR attributes to its leadership’s efforts to enhance charter holder benefits. The organization will also highlight that both 23XI and Front Row have previously purchased charters and operated under similar contractual terms without raising antitrust concerns until the conclusion of the recent negotiations. NASCAR is expected to argue that exclusivity and non-compete clauses are standard and legal business practices within the sports industry, essential for effective marketing and promotion.

Efforts to resolve the dispute outside of court have thus far been unsuccessful. Settlement mediation sessions held in New York City on August 5, 2025, with former NBA Chief Legal Officer Jeffrey filled no positive momentum. A subsequent court-mandated mediation session in October, described by Judge Kenneth D. Bell as conducted "in good faith," also failed to yield an agreement, reportedly breaking down over the allocation of legal fees, though some consensus was reached on charter permanency.

The trial will proceed with jury selection, with six jurors tasked with reaching a unanimous decision. 23XI Racing and Front Row Motorsports bear the burden of proof, needing to convince the jury by a "preponderance of the evidence" – meaning it is more likely than not that NASCAR engaged in anti-competitive practices. The plaintiffs are seeking over $300 million in damages, with any awarded amount limited to losses incurred over the past four years. Judge Bell also holds the authority to impose treble damages, a penalty for egregious conduct, and to mandate significant antitrust remedies. These could include forcing NASCAR to divest itself of tracks, dismantle the single-source car component system, eliminate exclusivity clauses, or fundamentally alter the charter system.

An underreported aspect of a potential plaintiff victory is that it does not automatically guarantee the return of their charters. Both teams lost their chartered status following a preliminary injunction appeals decision earlier this year, and their damages claim includes the loss of these charters. NASCAR is expected to argue that it cannot be compelled to conduct business with entities it chooses not to. Judge Bell has indicated a willingness to scrutinize the charter system’s legality, prompting the 13 non-party charter teams to submit affidavits urging a settlement to protect their investments.

Should NASCAR prevail, 23XI Racing and Front Row Motorsports could face significant financial hardship and potential closure, especially without the security of charters, potentially exiting the Cup Series by the end of the 2026 season. NASCAR had reportedly received offers for the six currently unchartered teams prior to the trial, but Judge Bell ordered them to hold off on any transactions until the legal proceedings concluded.

Regardless of the outcome in federal district court, an appeal to the Fourth District Court of Appeals in Richmond, Virginia, is highly probable, with the losing party potentially petitioning the U.S. Supreme Court. This legal entanglement also includes a dismissed countersuit filed by NASCAR, which accused 23XI, Front Row, and Polk of forming an illegal cartel to coerce unfavorable charter terms. NASCAR has indicated its intention to appeal the dismissal of this countersuit. Consequently, the ongoing trial represents not a definitive end, but rather a significant phase in a complex legal and business dispute that could have lasting repercussions for the future of NASCAR.