Antitrust Trial Unearths Tensions as NASCAR Executive Faces Scrutiny, Team Owner Details Financial Strain

The ongoing antitrust trial involving 23XI Racing and Front Row Motorsports against NASCAR entered its third day, marked by the continuation of testimony from NASCAR’s Executive Vice President and Chief Strategy Officer, Scott Prime, and the commencement of proceedings with Front Row Motorsports owner Bob Jenkins. The proceedings, held in a federal court, delved into the intricacies of NASCAR’s charter system, intellectual property rights, and the financial realities faced by team owners.

Scott Prime concluded his extensive testimony on Wednesday, facing rigorous examination from the plaintiffs’ attorney, Jeffrey Kesseler, and subsequent cross-examination. Kesseler’s questioning frequently centered on the "goodwill provision" within the charter agreements, a clause that restricts team owners with a significant ownership stake (10% or more) from competing in or owning interests in other racing series without NASCAR’s explicit approval. Furthermore, departing Cup Series owners face a mandatory 12-month waiting period before engaging in alternative racing ventures. Kesseler challenged the designation of this provision as "goodwill," suggesting it served as an anti-competitive measure. Prime, while acknowledging he was not a lawyer, defended the provision, stating, "I do" believe it is goodwill.

The discussion then shifted to the NextGen car, with Kesseler portraying its intellectual property restrictions as a mechanism to stifle competition, a core assertion of the lawsuit. Evidence presented included internal documents where Prime had previously expressed concerns about the previous car generation (Gen-6) and its looser intellectual property protections, which posed an "increased risk to NASCAR of copycat series." The implication was that teams might leverage NASCAR’s intellectual property in non-NASCAR sanctioned events. Prime, however, maintained that this had never been a point of contention with the teams, asserting that they "understood the Next Gen car design and all the protections that went with it, yes." He further stated that teams understood and endorsed the NextGen’s protections, seeking a degree of cost containment. Kesseler countered by highlighting that teams do not possess a formal vote under the charter rules.

A significant focus of Prime’s testimony involved the negotiations surrounding the 2025 charter extension. An email from Prime to NASCAR executive Jonathan Phelps on February 10 indicated Prime’s “disappointment” over the teams’ decision to halt negotiations and explore "all our options." The teams had put forth four key demands: 45% of industry revenue, exemption from the Driver Ambassador Program fees, 30% of new revenue generated by team intellectual property, and permanent charters. When these demands were not met, internal discussions within NASCAR, as revealed through discovered documents, explored contingency plans. These included reducing the number of charters to 32 and offering them on a "first come first serve" basis to existing charter holders, a tactic Kesseler likened to creating scarcity. Another option was a hard deadline for charter renewal, which ultimately materialized on September 6, 2024. A more radical proposal, "Project Gold Codes," envisioned NASCAR operating vertically, running races independently of teams, and employing its own drivers and cars.

Related News :

In response to these internal discussions, Phelps, in an email to Prime, characterized the situation as teams "playing with fire" and stated, "Lots of options but all have the same theme: Pick a date and they can sign or lose their charters. It is that simple." Kesseler seized on this, arguing it was a clear demonstration of monopolistic behavior, stating, "Only a monopolist could say this." Prime, however, clarified that these were contingency plans and that a "Path 2" involved continued efforts to "find a middle ground with the teams," which he contended was the eventual outcome, as NASCAR did not enter into agreements with new team owners for 2025.

The "Amanda Chart," a document compiled by NASCAR Chief Legal Officer Amanda Oliver, was revisited, illustrating a series of 22 demands from race teams with only a single "win" acknowledged for the teams during negotiations. Internal communications between Prime, NASCAR’s Chief Operating Officer Steve O’Donnell, and Phelps revealed a stark disagreement with the approach of CEO Jim France. In one exchange, Phelps expressed his disbelief, stating, "Productive? Insanity. Look at the Amanda (Oliver) chart – zero wins for the teams." O’Donnell echoed this sentiment, describing NASCAR’s stance as a "bold strategy" that he characterized as a "comfortable 1996, fuck the teams, dictatorship, motorsport, redneck, southern, tiny sport."

Despite these internal reservations, the teams were presented with a September 6 deadline to sign the extension, which carried only that single team win. Prime described this as a "gun to the head" offer, a sentiment echoed by Kesseler’s questioning. While 13 of the 15 Cup Series teams ultimately signed the agreement, 23XI Racing and Front Row Motorsports did not, leading to the filing of the current lawsuit.

Bob Jenkins, the owner of Front Row Motorsports, took the stand in the latter half of Wednesday, offering a stark contrast to the corporate discussions involving NASCAR executives. Jenkins detailed significant financial losses, stating he loses $6.8 million annually and has never turned a profit from his race team. He also indicated he does not draw a salary from his ownership. Jenkins’s involvement is less hands-on than some co-owners; he attends approximately a dozen races per year and visits the team shop six to seven times annually.

He cited a substantial increase in costs associated with the NextGen car, with annual expenditures on car components rising from $1.8 million under the previous car to $4.7 million. A particular point of contention is the requirement to send damaged parts back to a NASCAR-mandated vendor for repair, a process Jenkins stated costs $30,000 per week to refurbish an undamaged car. When questioned about his continued investment despite these losses, Jenkins responded, "I just believe in it. It’s why I feel so strongly about changing this system. There are 150 employees at that race shop who believe in me to make this work.”

Jenkins recounted his experience of receiving the September 6 "take it or leave it" offer while at dinner with his parents, unaware of the impending deadline. Upon leaving the restaurant, he was inundated with communications. He described the pressure felt by other owners, including Joe Gibbs, who felt compelled to sign, stating, "Not a single owner said, ‘I was happy to sign it.’ Not a single one." Jenkins characterized the final agreement as "backwards" and "insulting," likening NASCAR’s governance to "taxation without representation." While acknowledging the conceptual soundness of the charter system introduced in 2016, he argued that the 2025 iteration lacked necessary refinement.

During his cross-examination by NASCAR attorney Lawrence Buterman, Jenkins faced questions regarding the apparent contradiction of suing NASCAR for non-compete clauses while employing them in his driver contracts. Similar to Denny Hamlin’s testimony, Jenkins argued that as a non-monopolistic entity, his team offers drivers more options. Buterman also questioned Jenkins’s reported losses, suggesting profits might be channeled through other companies, referencing Jenkins’s practice of offering potential sponsors or pay drivers the option to donate to the Lakeway Christian Schools he founded. Jenkins testified that, despite this option, no such donations have been made.

Buterman also challenged Front Row’s practice of paying its drivers 8.5% of team revenue while simultaneously arguing that NASCAR underpays teams by allocating only 25% of sanctioning body revenue. Jenkins countered by emphasizing the significant expenses incurred by teams, particularly the $350,000 cost of a NextGen car, contrasting it with less expensive assets in other sports. Jenkins further faced scrutiny regarding Front Row’s decision to run five races without sponsorship, featuring the Long John Silvers franchise owned by his family. Jenkins defended this decision by stating he could not justify selling those races at a lower rate and then expecting another sponsor, such as Love’s, to pay more, as it would destabilize his business model.

Buterman suggested that Front Row was seeking additional funds from NASCAR to offset pre-existing business losses, predating the charter system. He also accused Jenkins of advocating for smaller field sizes and the elimination of open entries to increase his team’s share of NASCAR revenue. Jenkins defended this stance by asserting that a more exclusive entry point enhances the value for all participants within the system, adding that open teams often serve as "field filler" with limited value, with the exception of the Daytona 500. Jenkins’s cross-examination is scheduled to continue on Thursday.