rifan muazinThe ongoing antitrust trial pitting 23XI Racing and Front Row Motorsports against NASCAR entered its third day, marked by the concluding testimony of NASCAR’s Executive Vice President and Chief Strategy Officer, Scott Prime, and the commencement of testimony from Front Row Motorsports team owner Bob Jenkins. The proceedings, held on Tuesday and Wednesday, revealed significant friction between the sanctioning body and its team owners regarding charter agreements, intellectual property, and the financial viability of racing teams.
Scott Prime, who had begun his testimony on Tuesday, continued to face rigorous examination from Jeffrey Kesseler, attorney for 23XI and FRM. The exchanges were at times contentious, prompting Kesseler to issue an apology for raising his voice, to which Prime responded with understanding, acknowledging the passionate nature of the proceedings.
Kessler’s questioning focused heavily on the "goodwill provision" embedded within the charter agreement. This clause restricts team owners from competing in or owning interests in rival series without NASCAR’s explicit approval, and imposes a 12-month waiting period for those departing the Cup Series before engaging in other motorsports ventures. Kesseler challenged the term "goodwill," suggesting it was a misnomer for an anti-competitive measure. Prime, however, maintained that he viewed the provision as indeed embodying goodwill, designed to protect the existing structure of the sport. The provision applies to any individual holding a 10 percent or greater ownership stake in a team.
The discussion then shifted to the NextGen car, with Kesseler framing its intellectual property restrictions as a tool to stifle competition. Evidence presented included internal documents where Prime had expressed concerns about the previous Gen-6 car’s looser intellectual property rules, which he believed posed an "increased risk to NASCAR of copycat series." This suggested a NASCAR fear that teams might replicate Cup Series car designs for use in other racing formats. Prime, however, testified that this was never a point of contention with the teams, stating, "It was never an issue with the teams. They understood the Next Gen car design and all the protections that went with it, yes." He further indicated that teams understood and endorsed the NextGen’s protections, seeking cost containment and safeguards, though Kesseler pointed out that teams do not possess a formal voting mechanism under charter rules.
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Documents revealed during the trial highlighted internal communications regarding negotiations for the 2025 charter extension. An email from Prime to NASCAR executive Ben Phelps on February 10 expressed "quite disappoint(ed)" sentiment over teams ceasing negotiations and exploring "all our options." The teams had presented four key demands: 45 percent of industry revenue, exemption from the Driver Ambassador Program, 30 percent of new revenue generated from team intellectual property, and permanent charters.
When these demands were not met, internal NASCAR discussions, as evidenced by discovered documents, explored contingency plans to counter a potential "breakaway series" by teams. These options included reducing the number of charters to 32 and implementing a "first come first serve" system among existing holders, a tactic Kesseler likened to "musical chairs" designed to create scarcity. Another option was a hard deadline, which ultimately materialized on September 6, 2024. A more drastic measure, "Project Gold Codes," envisioned NASCAR operating independently, running races in-house, and hiring its own drivers and teams.
In response to these contingency plans, Phelps emailed Prime, stating, "They are playing with fire. 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, labeling it as evidence that fueled the lawsuit and characterizing NASCAR as a monopolist exercising undue power. Prime, however, clarified that these were merely contingency plans and that a parallel effort, "Path 2," aimed to "find a middle ground with the teams," which he contended was ultimately the path taken. Despite the deadline passing, NASCAR did not allocate charters to new owners for the 2025 season.
Prime reiterated that NASCAR’s considerations were contingency-based, prepared for the eventuality of a breakaway series. When questioned by Kesseler about where such a series would race, given NASCAR’s track exclusivity clauses, Prime suggested alternative venues like short tracks and street courses. Kesseler countered that this was unrealistic in the modern era, citing NASCAR’s reported $50 million loss over three years from the Chicago street race as an example of the financial challenges of such venues. Prime defended the concept of "locking up tracks" as part of multi-year scheduling agreements, such as TNT’s desire for Atlanta due to its connection with Turner Sports, though Kesseler questioned the necessity of new, multi-year exclusivity clauses for such arrangements.
The trial also delved into "The Amanda Chart," a document prepared by NASCAR Chief Legal Officer Amanda Oliver, which reportedly detailed 22 team requests during negotiations, with only a single "win" for the teams. Internal communications from May 20-21 between Prime, NASCAR Executive Joie O’Donnell, and Phelps indicated significant disagreement within NASCAR’s senior leadership regarding CEO Jim France’s negotiating posture. O’Donnell relayed that France, along with legal counsel Gary Crotty and President Emeritus Mike Helton, viewed meetings as productive and aimed for a middle ground, while O’Donnell expressed concern about how NASCAR’s positions would foster growth and secure future media rights renewals. Phelps echoed this sentiment, referring to the chart as demonstrating "zero wins for the teams" and describing the situation as "insanity." Prime characterized NASCAR’s approach as a "bold strategy" of offering minimal concessions while demanding exclusivity. O’Donnell voiced concern that this approach was leading NASCAR back to a "dictatorship" reminiscent of its past.
Despite these internal reservations, teams were presented with a September 6 deadline to sign the extension agreement, which contained only one team concession. While the deadline was eventually extended to midnight, 13 of the 15 Cup Series teams ultimately signed. 23XI Racing and Front Row Motorsports, however, did not, leading to the current lawsuit. Prime acknowledged in a May 20 text message that he and O’Donnell had "put our best foot forward" in advocating for permanent charters with the Board of Directors but faced a "brick wall" from Jim France, with other NASCAR executives reportedly offering little resistance. Nevertheless, Prime maintained that NASCAR never considered revoking charters, as deadlines passed without charters being reallocated. Kesseler pressed on the consequences of not signing, which Prime stated would lead to the charter agreement’s expiration and the loss of its associated terms, implying that charters were not evergreen.
Following Prime’s testimony, Bob Jenkins, owner of Front Row Motorsports, took the stand. Jenkins, who garners less public attention than co-owners Denny Hamlin and Michael Jordan, detailed significant financial losses, stating he loses $6.8 million annually and has never turned a profit. He also does not draw a salary from his ownership. Jenkins indicated his limited involvement, attending approximately a dozen races and visiting the shop 6-7 times a year. He cited a substantial increase in costs under the NextGen model, with car component expenses rising from $1.8 million to $4.7 million annually. He specifically noted that under the previous car generation, teams could repair parts themselves, whereas the NextGen requires parts to be sent to a NASCAR-mandated vendor, costing an estimated $30,000 per week for an undamaged car refurbishment.
Jenkins explained his continued involvement despite financial strain, stating, "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." He recounted receiving the "take it or leave it" offer on September 6 while at dinner with his parents, unaware of the impending ultimatum. Upon leaving the restaurant, he found numerous missed communications. Jenkins described the emotional reactions of other team owners, including Joe Gibbs, who felt compelled to sign and believed he had let Jenkins down. "Not a single owner said, ‘I was happy to sign it.’ Not a single one," Jenkins stated. He characterized the final agreement as "insulting" and "backwards," likening NASCAR’s governance to "taxation without representation." While he found the conceptual basis of the charter system sound, he felt the 2025 iteration lacked necessary refinement.
During his cross-examination by NASCAR attorney Lawrence Buterman, Jenkins faced questions mirroring those directed at Denny Hamlin regarding the apparent contradiction of suing NASCAR over non-compete clauses while implementing similar clauses in driver contracts. Jenkins reiterated that NASCAR, as a monopoly, operates differently than his own team, which does not possess such market dominance, and that drivers have alternative options. Buterman questioned Jenkins’ claims of financial losses, suggesting profits might be diverted through his other ventures, such as the Lakeway Christian Schools he founded. Jenkins confirmed that while potential sponsors and drivers have been offered the option to donate to the school, no such donations have been made.
Buterman also scrutinized Front Row’s practice of paying drivers 8.5 percent of team revenue while simultaneously arguing that NASCAR underpays teams by allocating only 25 percent of sanctioning body revenue. Jenkins countered that this comparison was "apples and oranges" due to the significant expenses incurred by teams, such as the $350,000 cost of a NextGen car. He further questioned Jenkins’ claim of losses, citing instances where Front Row ran cars unsponsored with Long John Silvers branding, a franchise owned by Jenkins and gifted to his sons. Buterman suggested this was a choice to run at a loss rather than accept a lower sponsorship rate. Jenkins defended his position, stating that compromising on sponsorship rates for those five races would undermine his ability to secure better deals with other sponsors.
Buterman concluded by suggesting Front Row was seeking additional funds from NASCAR to offset a business that was struggling even before the charter system’s inception. He also accused Jenkins of advocating for smaller fields and eliminating open entries to increase his team’s share of NASCAR revenue. Jenkins responded that a more exclusive entry system enhances the value for all participants, and that open entries, with few exceptions, serve as slower field-fillers that do not add value to the series. Jenkins’ cross-examination is scheduled to continue on Thursday.
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