NASCAR Antitrust Trial: Executive Cross-Examined, Team Owner Details Financial Strain

The third day of the 23XI Racing and Front Row Motorsports v. NASCAR antitrust trial saw continued testimony from NASCAR Executive Vice President and Chief Strategy Officer Scott Prime, who faced rigorous questioning from attorneys representing the plaintiff teams. The day also marked the beginning of testimony from Bob Jenkins, owner of Front Row Motorsports, who detailed the financial challenges faced by his team.

Scott Prime, on the stand for the second consecutive day, was subjected to further examination by Jeffrey Kesseler, the attorney for 23XI and Front Row. The proceedings were at times contentious, with Kesseler even issuing an apology for his raised voice, to which Prime responded with understanding, acknowledging the passionate nature of the proceedings.

Kessler’s line of questioning focused on the "goodwill provision" within the charter agreement. This clause restricts team owners with a 10 percent or greater ownership stake from competing in or owning a stake in another racing series without NASCAR’s approval. Furthermore, any owner departing the Cup Series must observe a 12-month waiting period before engaging in new ownership in a different series. Kesseler challenged the term "goodwill," suggesting it should be characterized as an "anti-competitive will," an assertion met with an objection from NASCAR’s legal team. Prime maintained his belief that the provision was indeed a matter of goodwill, a stance that drew skepticism from Kesseler.

The trial also delved into the intellectual property restrictions surrounding the NextGen car. Kesseler sought to frame these restrictions as a deliberate tactic by NASCAR to stifle competition and restrain trade. Documents presented in court revealed Prime’s prior concerns about the previous generation car (Gen-6) and its "increased risk to NASCAR of copycat series" due to less stringent intellectual property controls. The implication was that NASCAR feared teams might leverage Cup Series car designs in non-NASCAR competitions. However, Prime testified that this had "never been an issue with the teams," asserting that they understood and endorsed the protections inherent in the NextGen car’s design, particularly in relation to cost containment. Kesseler pointed out that teams do not possess a formal voting mechanism within the charter rules.

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During negotiations for the 2025 charter extension, an email from Prime to NASCAR executive Ben Kennedy on February 10 indicated significant disappointment from the race teams regarding NASCAR’s stance. Teams had presented four key demands: 45 percent of industry revenue, exemption from contributing to the Driver Ambassador Program, 30 percent of new revenue generated from team intellectual property, and permanent charters. The email suggested teams were "forced to recommit our energy to exploring all our options" due to a lack of agreement.

Internal communications revealed contingency plans considered by NASCAR in response to the potential for a "breakaway series" by teams. These included reducing the number of charters to 32 and offering them on a "first come first serve" basis among existing charter holders, a strategy Kesseler likened to creating scarcity. Another option involved a hard deadline for agreement, which ultimately materialized on September 6, 2024. A more drastic measure, "Project Gold Codes," envisioned NASCAR operating races independently, hiring its own drivers and fielding its own cars. In an email exchange, NASCAR executive Joie Chitwood III referred to the teams’ stance as "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 characterized this as a statement only a monopolist could make, holding the power to issue an ultimatum that could end a team’s participation in the sport.

Prime, however, argued that these were merely contingency plans and that a "Path 2" involved continued efforts to "find a middle ground with the teams," which ultimately occurred. Despite the looming deadline, NASCAR did not enter into agreements with new team owners for the 2025 season. Prime maintained that these contingency plans were necessary in case teams formed their own series. When questioned about potential venues for such a breakaway series, Prime cited short tracks and street courses. Kesseler countered that this was unrealistic, referencing NASCAR’s reported $50 million loss over three years on the Chicago street course. Prime also stated that discussions about "locking up tracks" were part of multi-year scheduling agreements, not an effort to prevent other series.

The trial also revisited "The Amanda Chart," a document reportedly created by NASCAR Chief Legal Officer Amanda Oliver. This chart allegedly depicted 22 demands from the race teams and showed only one "win" for the teams during negotiations. Text messages from May 20-21 between Prime, NASCAR executive Mike O’Donnell, and NASCAR executive Lesa Kennedy indicated internal disagreement with the approach of NASCAR CEO Jim France. One message from O’Donnell stated, "They all thought meeting was productive and that we just need to keep trying to move the needle. Teams won’t get everything they want and hopefully we can just meet in the middle." However, another message from Kennedy read, "Productive? Insanity. Look at the Amanda Oliver chart – zero wins for the teams." Prime described the approach as a "bold strategy" of "here is a bit more money, fuck off everywhere else." O’Donnell characterized the approach as leading the sport back to a "comfortable 1996, fuck the teams, dictatorship, motorsport, redneck, southern, tiny sport."

Despite these internal discussions, teams were given a September 6 deadline to sign the extension agreement, which allegedly offered them minimal concessions. Prime described this as a "gun to the head" offer. Ultimately, 13 of the 15 Cup Series teams signed the agreement by midnight, while 23XI and Front Row did not, leading to the current lawsuit. Prime had previously expressed in a May 20 text message to Kennedy his efforts to secure permanent charters with the Board of Directors, calling it a "brick wall" and noting that NASCAR legal counsel Gary Crotty "just rolled over on everything."

Prime reiterated that NASCAR never considered revoking charters, noting that two deadlines passed without charters being reissued. However, Kesseler pressed on the consequences for teams that did not sign. Prime stated that the charter agreement would expire, rendering their terms invalid. Kesseler’s line of questioning aimed to establish that NASCAR would, in effect, take away the charters as they are not evergreen.

The focus then shifted to Bob Jenkins, owner of Front Row Motorsports. Jenkins testified that his team loses approximately $6.8 million annually and has never been profitable. He does not draw a salary from the team ownership. Jenkins attends roughly a dozen races per year and visits the team’s shop 6-7 times annually. He stated that car component costs have risen significantly under the NextGen model, from $1.8 million to $4.7 million per year. A key factor cited was the shift from teams performing their own repairs to parts needing to be sent to NASCAR-mandated vendors, incurring a cost of $30,000 per week for refurbishing an undamaged car. Jenkins attributed his continued involvement to his belief in the sport and his responsibility to his 150 employees.

Jenkins recounted being at dinner with his parents on September 6, unaware of the impending deadline, when he received numerous texts and calls upon leaving the restaurant. He described receiving calls from other owners, including Joe Gibbs, who he said felt compelled to sign the agreement and regretted letting Jenkins down. Jenkins characterized the final agreement as "insulting" and "backwards," likening NASCAR’s approach to "taxation without representation." While acknowledging the charter system’s conceptual soundness since its 2016 introduction, he argued that the 2025 iteration lacked necessary refinement. He stated, "If we ever do get this right, NASCAR teams will be valuable." Jenkins clarified that his critique was not an attack on the France family’s past decisions but specifically on the current charter agreement.

During cross-examination by NASCAR attorney Lawrence Buterman, Jenkins faced questions similar to those posed to Denny Hamlin regarding the perceived hypocrisy of suing NASCAR for imposing non-compete clauses while utilizing them in driver contracts. Jenkins responded that Front Row is not a monopoly and drivers have alternative options. Buterman questioned Jenkins’ claims of financial losses, suggesting profits might be concealed through other companies. He pointed to instances where potential sponsors or drivers were offered the option to donate to Lakeway Christian Schools, founded by Jenkins, instead of directly sponsoring the team. Matt Tifft, in 2020, was offered this option, and Chandler Smith paid $1.5 million for a Truck Series seat this year. Jenkins stated that no donations had been made to the school under this arrangement.

Buterman also questioned why Front Row pays its drivers only 8.5 percent of team revenue while arguing that NASCAR underpays teams at 25 percent of sanctioning body revenue. Jenkins countered by highlighting the significant expenses incurred by teams, particularly the $350,000 cost of the NextGen car, which he contrasted with less expensive items like a basketball. Buterman further scrutinized Jenkins’ reported losses, citing instances where Front Row ran unsponsored cars for five races, featuring Long John Silvers, a franchise owned by Jenkins. Jenkins explained that the cost of sponsorship is fixed and that offering lower rates for those races would undermine the value proposition for other sponsors like Love’s.

Buterman contended that Front Row was seeking additional funds from NASCAR to compensate for a business that was already struggling before the charter system. He also suggested Jenkins had advocated for a smaller field and the elimination of open entries to increase his team’s share of NASCAR’s revenue. Jenkins argued that a more exclusive entry system enhances the value for all participants and that open teams generally serve as slower field-fillers that do not add value to the series, with the exception of the Daytona 500. Jenkins’ cross-examination is scheduled to continue on Thursday.