rifan muazinThe antitrust trial involving 23XI Racing and Front Row Motorsports against NASCAR has seen the now-defunct Superstar Racing Experience (SRX) series emerge as a significant focal point, potentially influencing the jury’s perception of NASCAR’s market dominance and competitive practices. Over four days of proceedings, attorneys have delved into how NASCAR executives perceived SRX as a nascent threat and the subsequent actions taken in response.
Jeffrey Kessler, representing 23XI and Front Row Motorsports, has presented evidence suggesting that NASCAR leadership grew increasingly aware of SRX as a potential competitor. Through questioning of NASCAR executives, including President Steve O’Donnell and EVP of Strategy Scott Prime, Kessler has sought to establish a narrative that NASCAR reacted tangibly to this perceived competition. This line of questioning is crucial to the core of the lawsuit, which aims to determine if NASCAR has leveraged its monopolistic position in premier stock car racing to stifle competition and disadvantage teams operating within the sport.
The SRX series, which ran for three seasons from 2021 to 2023, initially positioned itself as a platform for retired racing legends and local talent. However, its trajectory shifted, with later seasons increasingly featuring active NASCAR Cup Series drivers. By 2023, notable figures like Brad Keselowski participated full-time, with cameo appearances from stars such as Kyle Busch, Chase Briscoe, and Chase Elliott, underscoring its growing overlap with NASCAR’s core constituency.
NASCAR’s concerns regarding SRX began to surface around the summer of 2022, coinciding with negotiations for the extension of the charter agreement with teams. Internal communications revealed a strategic consideration of how to react should teams reject NASCAR’s proposals. As Scott Prime referenced, the possibility of teams and drivers participating in SRX was a tangible concern as early as June 2022, particularly as SRX began to adopt characteristics that NASCAR felt infringed upon its identity.
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Steve O’Donnell acknowledged this concern under questioning, stating, "I recall we all became concerned with the look and the feel of the series, yes." While the 2016-2024 charter agreements did not explicitly prohibit drivers from participating in other series, the involvement of team owners like Denny Hamlin and Justin Marks, who were also SRX participants, raised alarms within NASCAR. Tony Stewart, a three-time Cup Series champion and then co-founder of SRX and a charter-holding team owner, added another layer of complexity.
O’Donnell recounted a conversation with Brett Frood, then president of Stewart-Haas Racing, where he was assured that SRX’s original plan was not to emulate NASCAR or feature its drivers. However, O’Donnell noted that these initial intentions evolved, leading to increased apprehension.
A pivotal piece of evidence presented was an internal email exchange from June 29, 2022, involving Prime, NASCAR COO Steve Phelps, Ben Kennedy, and O’Donnell. This exchange highlights the depth of NASCAR’s concern:
O’Donnell: Justin Marks is racing SRX?
Ben Kennedy: Saw that too. Disappointing.
Prime: They just don’t get it. I’m sure it’s cool for Justin to go get behind the wheel but there’s no regard for the bigger picture. And maybe that’s on us for not giving them that incentive, I don’t know. But you’ve got Marks, Chase (Elliott), Tony (Stewart) and (Ryan) Blaney racing on a network that competes against our rights holders. They outrated (on television) Xfinity and Trucks last weekend; it isn’t some local dirt track stuff.
O’Donnell: Actually you have one of the voices of FOX in Waltrip, an owner of Cup cars in Stewart, our most popular driver for years and one of our champs fathers etc. This is exhibit ‘a’ that nobody gives a shit about what got them their careers. Pay ‘em some money and they are all in. The guy who cried about safety every single day is in a box car without SAFER Barriers and not a care in the world. And by the way, who does Curtis (Polk, 23XI co-owner) have hanging with (Michael Jordan) over the weekend in Nashville? Not Ben, not me or (Scott) Prime or anyone – Marty Smith from ESPN. Coincidence? Lots to get our arms around but sadly any ‘goodwill’ seems to be lost. So smiles all around but behind the scenes we scheme and we win. Wait until (Dale) Jr. says he is running an event. Matter of time. They will go to North Wilkesboro with Jr. if we are not careful. We need to be the first back.
Prime: Agreed – North Wilkesboro and Bowman Gray next year with Jr and friends if we don’t make moves
O’Donnell: How about this for All Star – make it a combo – Bowman and Wilkes Fri/Sun
Prime: Sick! And flip it for 2024. We’ve got moves to make. Just need to sell them through. Should be a good working session Thursday
Phelps: That’s the key – we need to have everyone understand that this could turn into LIV if we don’t play our cards right. We are smarter than they are – but part of the issue is they don’t have the facts and don’t seem to want to take the time to learn or maybe they just don’t care. It’s all about the money and feeling like they have been heard and are respected. The SRX thing is just baffling to me. Why don’t they get it? Oh, they do get it, and it’s a huge FU to us.
This exchange indicates a strategic imperative to preemptively secure key venues and talent. In the aftermath, NASCAR added North Wilkesboro Speedway to the Cup Series schedule in 2023 and Bowman Gray Stadium for 2025, moves that plaintiffs’ attorneys argue were direct responses to the SRX threat.
Furthermore, Speedway Motorsports, a major track owner, reportedly sought to include an SRX date in its 2024 schedule to aid in debt servicing. However, NASCAR allegedly blocked this by enforcing an exclusion provision in track agreements, preventing SM from scheduling the SRX race. O’Donnell testified that NASCAR opposed this due to ongoing negotiations for a new broadcast rights agreement, stating, "SRX started to look like NASCAR, so we said no." He further elaborated that NASCAR aimed to "gain as much TV revenue for the teams and tracks as possible," implying that SRX’s existence on a major television platform presented a competitive hurdle and potential market confusion during these crucial negotiations.
Another internal communication, a text exchange from February 1, 2023, between Phelps and O’Donnell, further underscores NASCAR’s stance:
Phelps: Oh great, another owner racing in SRX
O’Donnell: This is NASCAR. Pure and simple. Enough. We need legal to take a shot at this.
Phelps: These guys are just plain stupid. Need to put a knife in this trash series.
When questioned about his directive for legal action, O’Donnell stated he "thought it looked more and more like NASCAR," and when asked if he wanted SRX stopped, he replied, "I just wanted legal to take a look at it."
Regarding the scheduling of North Wilkesboro and Bowman Gray, O’Donnell asserted that these decisions were not solely driven by SRX’s influence but also by existing relationships and opportunities. He detailed the historical ties to Bowman Gray and the owners’ desire to sell their lease, coupled with Speedway Motorsports’ request for a Cup race at the owned North Wilkesboro Speedway. However, Kessler repeatedly emphasized that these scheduling decisions followed internal discussions directly referencing SRX as a catalyst.
SRX ultimately announced its closure in January 2024, with the precise reasons remaining undisclosed. O’Donnell acknowledged that he "thinks about it every day" regarding the possibility of breakaway series and that assessing potential headwinds to the NASCAR business is part of his responsibilities. This concern was also evident in an email chain from March 2022, prior to charter negotiations, where NASCAR leadership expressed apprehension about teams forming or joining a rival series.
In response to these concerns, track agreements, under O’Donnell’s supervision, were updated to include more stringent non-compete clauses. These clauses extended for two years, with an additional two-year period contingent on agreement after the initial term. O’Donnell clarified that the extended period only commenced with renewed agreement, despite email evidence suggesting otherwise, and characterized these extensions as primarily for scheduling purposes. When questioned about the application of these non-compete clauses against SRX racing at a Speedway Motorsports facility, O’Donnell stated it was "If it looked like it infringed upon our IP."
The intensity of NASCAR’s concern was further illustrated by Prime and O’Donnell’s apprehension that teams might align with SRX and Speedway Motorsports to run multiple races at SMI facilities and at tracks owned by Tony Stewart (Eldora Speedway) and Roger Penske (Indianapolis Motor Speedway). O’Donnell indicated a desire to finalize track agreements with Speedway Motorsports before teams could explore such options. The potential for teams to sell charters to Liberty Media (owner of Formula 1) or launch their own mid-week series was also a source of anxiety, with the emergence of LIV Golf as a disruptive force in professional golf creating a palpable nervousness within NASCAR circles.
O’Donnell’s Stance on Team Finances
During the trial, NASCAR President Steve O’Donnell provided testimony regarding his perspective on the financial challenges faced by race teams. Notes from a 2022 meeting with team owners, where charter negotiations were first discussed, indicate O’Donnell’s awareness that the existing model was "broken" for competitors. His notes explicitly stated, "the business model is broken for the teams," after reviewing financial reports suggesting car entry costs could reach $20 million per season. O’Donnell conceded, "We knew the industry was challenged."
At that time, the charter agreement allocated 65% of broadcast rights revenue to tracks, 25% to teams, and 10% to NASCAR. During the meeting, Curtis Polk, an investor in 23XI and chairman of the eventual Teams Negotiating Committee, outlined three primary team objectives: maximizing broadcast rights revenue, increasing competition, and implementing a spending salary cap.
Jeff Gordon of Hendrick Motorsports reportedly inquired whether the France family, NASCAR’s ownership, was open to a new financial model to support teams. Ben Kennedy, at the time, indicated yes. However, when questioned by Kessler, O’Donnell stated this was not true. By February 14, 2023, O’Donnell expressed in a handwritten note a hope for a younger leadership on NASCAR’s future board, believing the "legacy mindset" within the NASCAR Board "inhibited growth." He described facing significant resistance from "Mr. France" (presumably Jim France) during negotiations, which Kessler characterized as a "brick wall." O’Donnell, however, deflected this characterization, stating, "Those are your words, not mine."
Despite these challenges, O’Donnell maintained that his role is "to grow the sport" for all stakeholders, including bosses, teams, and fans. He indicated that the France family hired him not as a "Yes Man" and that his job sometimes requires addressing broader issues. O’Donnell also highlighted NASCAR’s own substantial investments, often at a loss, such as the $55 million spent over three years on the Chicago Street Race, which he described as a strategic investment to secure Amazon as a broadcast partner. Similarly, NASCAR reported a $6 million loss for the Mexico City race in 2024, undertaken due to its importance to Amazon.
Cross-Examination of Bob Jenkins
The trial also featured the cross-examination of Bob Jenkins, owner of Front Row Motorsports. NASCAR attorneys attempted to demonstrate that Jenkins had used other business ventures to misrepresent FRM’s financial situation. While Jenkins testified to a $20 million per-car cost in the Cup Series, NASCAR attorney Lawrence Buterman presented discovery documents indicating FRM’s highest expenditure on a Cup car was $14 million. Jenkins countered that the $20 million figure represented an aggregate cost across multiple teams as cited in a team document, stating, "The median cost is $20 million; the fact I can do it for less helps me reduce my costs."
Buterman also pointed to documents showing that a $1.2 million loss from Jenkins’ Truck Series team, unrelated to the lawsuit, was included in the damages sought. Jenkins conceded that these losses should not have been included.
A central argument of the lawsuit is that NASCAR’s final charter offer on September 6, 2022, characterized as "take it or leave it," constituted monopolistic and anti-competitive behavior. On that date, teams were given until the end of the business day to sign the charter document or risk losing their charters. Buterman presented evidence that Jenkins employed a similar tactic in 2021 during discussions for a merger between Front Row Motorsports and 23XI Racing, presenting a text message where Jenkins told Denny Hamlin, "we can’t keep negotiating this forever…why we decided we had to have a deal by 5 p.m."
Jenkins deflected comparisons to exclusivity clauses in driver contracts, arguing that Hamlin had the option to purchase a charter from other teams, unlike drivers who might have limited alternatives. He also clarified that a text message suggesting Rick Ware Racing could "charge whatever to Hamlin" for a charter was not an attempt to impose terms but rather a reflection of the market dynamics at the time, particularly concerning his planned merger with 23XI. The merger ultimately failed due to Toyota’s inability to support two distinct engine programs, a condition of Jenkins’ two charters.
Pace of the Trial
Judge Kenneth D. Bell expressed dissatisfaction with the trial’s slow pace, noting that only three witnesses had testified over three days. He voiced concern that the proceedings were not moving efficiently and suggested that future witnesses should provide more direct answers, acknowledging uncomfortable information as simply "a bad look and get on with it." The judge cautioned against excessive redundancy, stating the jury was "seeing a lot of trees and not a lot of forest."
NASCAR’s intention to call Roger Penske as a witness was met with an objection from Kessler, who argued it would disrupt the presented narrative. Judge Bell sided with Kessler, emphasizing that federal trials are inherently inconvenient and that Penske would need to testify when his scheduled turn arrived. With the trial initially projected as a two-week commitment, Bell warned against extending it further, particularly as the holiday season approached, noting that a 50% increase in the jury’s commitment would be unacceptable.
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