Michael Jordan and Heather Gibbs Take Center Stage as NASCAR Antitrust Trial Enters Crucial Phase

The Western District of North Carolina courtroom buzzed with anticipation Friday afternoon as basketball icon Michael Jordan took the witness stand, marking a significant moment in the ongoing antitrust lawsuit filed by 23XI Racing and Front Row Motorsports against NASCAR. The trial, which has spanned 15 months leading up to this point, saw its first week conclude with testimony from key figures aiming to shape the jury’s understanding of NASCAR’s market power and its impact on race teams.

Jordan, a co-owner of 23XI Racing alongside Cup Series driver Denny Hamlin and long-time associate Curtis Polk, is at the heart of the legal challenge. The core of the plaintiffs’ argument rests on the court’s determination that NASCAR operates as a monopsony – a buyer’s monopoly. This means NASCAR is the sole purchaser of premier stock car racing teams, and the jury must decide if this market power was wielded to stifle competition and depress team earnings, particularly during the recent charter extension negotiations.

In essence, 23XI Racing and Front Row Motorsports allege that they would have secured greater revenue from NASCAR had it not been for anticompetitive practices by the sanctioning body, including efforts to prevent new competition from emerging. While 13 out of 15 Cup Series teams ultimately signed the charter extension after protracted negotiations, Jordan’s 23XI Racing and Bob Jenkins’ Front Row Motorsports stood apart.

"Someone had to step forward to challenge NASCAR," Jordan stated from the witness stand, underscoring the gravity of their decision to pursue legal action. He drew parallels between NASCAR’s structure and the National Basketball Association, where he achieved legendary status. Jordan suggested a revenue-sharing model closer to 50-50 between the league and teams, coupled with a more equitable distribution of growth responsibilities, could foster a healthier sport. "If you share responsibility, the healthiness of the sport can grow," he explained. "It needed to be looked at from a whole different perspective. That’s why we’re here."

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NASCAR’s defense, presented by attorney Lawrence Buterman, hinges on the fact that the organization is privately owned by the France family, distinguishing it from publicly traded leagues where teams effectively hold ownership. Jordan, however, countered that such privately owned sports ventures are "rarely successful."

Jordan’s investment in 23XI Racing, initially named "Michael Jordan Motorsports with Denny Hamlin," is substantial. He is the majority owner and has reportedly injected between $35 million and $40 million into the team. This commitment was made despite advice from Curtis Polk, his manager of 35 years, who cautioned that NASCAR posed risks to Jordan’s brand and image, potentially leading to significant financial losses. Nonetheless, Jordan was a lifelong NASCAR fan and fully embraced Hamlin’s vision for the team, projecting an initial profit of $900,000.

Despite the team’s reported profitability, which Jordan attributes to professional management and his own star power, he maintains that the current charter system is inequitable. His initial optimism upon entering NASCAR was tempered by his growing understanding of the sport’s economic model, which he ultimately found "unfair."

The escalating cost of acquiring charters—with the third charter costing $28 million, following a $13.5 million second charter and an initial $4.7 million acquisition—highlights the teams’ strategic decisions. Jordan explained his pursuit of these assets: "There was a discussion between me and Denny about being successful… people who know me know I like to win and I will pursue anything to win and getting a third charter improves our chance to win the championship." He emphasized his deep investment in the sport and the limited availability of charters, compelling him to act even amidst the contentious negotiations. Jordan expressed a hope for a more collaborative partnership between NASCAR and its teams, believing it would enhance the business’s overall value and potential for growth.

NASCAR’s defense also sought to portray Curtis Polk as an outsider whose primary objective was to disrupt the established order and ultimately instigate this lawsuit. Evidence presented included internal communications where Polk allegedly described races as "boring as shit" and expressed a strategy to be a "pest" and a "mosquito bite every week" during negotiations, including leaking financial proposals to the media. Jordan acknowledged Polk’s sentiment that he did not share the same passion for racing as he and Hamlin, stating, "Obviously not."

Polk’s proposed strategies, such as educating smaller teams on why their $11 million per chartered car proposal was unacceptable to larger entities like 23XI and Front Row (who sought $20 million per car), were met with Jordan’s tacit approval via thumbs-up emojis in text communications. Polk’s intent to send a letter with "alternative evergreen language" to NASCAR also received a similar response from Jordan.

A moment of levity punctuated the proceedings when defense attorney Lawrence Buterman thanked Jordan for his time, joking that it made his nine-year-old son think he was cool. Jordan quipped about Buterman not wearing his signature Jordans, to which Buterman replied, "I’m not."

While Jordan’s testimony garnered significant attention, Heather Gibbs, daughter-in-law of team founder Joe Gibbs, delivered what many considered the most impactful testimony of the day. Gibbs spoke publicly for the first time about the tragic death of her husband, Coy Gibbs, in November 2022, the morning after their son Ty secured the Xfinity Series championship. Since then, Heather has become more deeply involved in Joe Gibbs Racing’s operations and charter negotiations. She testified that the financial realities of the Cup Series are "very challenging for the teams," particularly for family-owned operations without external subsidies.

Gibbs recalled writing a strong letter to NASCAR leadership in response to a statement by league commissioner Steve Phelps suggesting reckless team spending. While she expressed respect for the France family, she believed NASCAR required a revised economic model. The charter extension deadline, described by some team executives as a "gun to the head" proposition, saw Joe Gibbs pleading with Jim France, "don’t do this to us."

The final charter agreement draft, delivered at 5 p.m. on September 6th with a 6 p.m. signing deadline, was marred by grammatical errors and syntax issues, with NASCAR promising resolutions through side letters. Critically, Gibbs stated the agreement did not guarantee broadcast revenue beyond the initial seven years. When she contacted Jim France with these concerns, his response was reportedly, "I’m done with the conversation" and "If I wake up and I have 20 charters, I have 20 charters."

Gibbs ultimately signed the agreement, driven by the legacy of Coy and JD Gibbs and the overwhelming risk of losing any deal if Joe Gibbs Racing refused. During cross-examination regarding charter permanency, Gibbs explained her use of "auto-renewal with terms" instead of "evergreen" or "permanent" was a strategic choice to avoid antagonizing Jim France, who reportedly had an issue with the word "permanent." NASCAR teams, however, maintain that permanent charters would significantly enhance their enterprise values, regardless of the specific terms.

NASCAR President Steve O’Donnell concluded a substantial period on the stand, totaling nearly five hours over two days. His testimony addressed NASCAR’s reaction to the Superstar Racing Experience (SRX) and the potential for teams to launch a rival series. O’Donnell stated that over 1,000 tracks exist in the U.S. for such a venture, with only 30 featuring NASCAR exclusivity clauses. He noted that a rival series could potentially partner with IndyCar or utilize street courses.

O’Donnell expressed concern over SRX’s emergence, citing a call from NBC Sports executive Sam Flood that questioned the viability of their rights agreement if other networks were broadcasting similar NASCAR content. The sight of Chase Elliott in a NASCAR-sponsored car in an SRX race was described as alarming. O’Donnell also claimed SRX was "coming back," although Motorsport.com confirmed with multiple sources that no such revival is planned. He asserted that GMS Race Cars purchased physical assets from SRX co-founder Ray Evernham for track day use, not the series’ intellectual property.

NASCAR’s defense posits that non-compete clauses were a byproduct of negotiations, ensuring teams committed to working towards the best broadcast deals in exchange for guaranteed revenue and starting spots. A cornerstone of NASCAR’s defense is that charter payouts have consistently increased, with charter enterprise values rising from $1 million in 2016 to $45 million last season, indicating a healthy and growing sport. O’Donnell argued this growth demonstrates confidence in NASCAR, even amidst litigation.

However, 23XI and Front Row contend that permanent charters would elevate their value significantly, potentially exceeding $100 million on the open market. O’Donnell countered that charters were not initially designed to be permanent, citing the evolving nature of the sport, including schedule and car changes.

Discussions also revolved around a proposed cost cap and cost floor for the 2025 charter negotiations. NASCAR advocates for a cost cap to curb "reckless spending," a position met with divided opinions among teams. O’Donnell suggested dominant teams like Penske, Gibbs, and Hendrick might be less enthusiastic, while mid-tier teams are more receptive, citing Formula 1’s cost cap as a driver of increased enterprise value. A cost floor proposal faced challenges, with some teams reporting they already operate below the suggested spending threshold.

The teams’ "four pillars" proposal, seeking $720 million ($20 million per chartered entry), was met with surprise by O’Donnell, who noted the previous rights agreement was only $800 million annually. He argued that allocating such a sum to teams would leave insufficient funds for tracks and hinder overall industry growth, contrasting it with IndyCar teams receiving 25% of revenue, equating to $2-2.5 million per car. Plaintiff counsel Michael Kessler countered that IndyCar’s TV deal provides $8 million per entry, translating to $20 million or more for teams.

O’Donnell reiterated his difficult experiences with Curtis Polk, describing him as a businessman lacking appreciation for the sport and threatening disruption. He characterized Polk as someone who "stuck to his messages" and did not approach meetings with respect.

The defense’s questioning of O’Donnell regarding respect within NASCAR leadership, specifically referencing text messages between Steve Phelps and Scott Prime that contained derogatory remarks about Richard Childress, was met with objection. The judge had previously ruled this evidence inadmissible, deeming it inflammatory.

Throughout the trial, District Court Judge Kenneth D. Bell has cautioned NASCAR that "growing the sport" is an insufficient defense and could be construed as an admission of revenue maximization. Bell also indicated the trial was likely to extend beyond its scheduled 10-day timeframe, acknowledging the burden on the jury. While the goal remains to conclude within two weeks, Bell suggested a completion date around December 15th or 16th was more probable. He expressed gratitude for the jury’s attentiveness and dedication, recognizing the significant commitment required.

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