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Charlotte, NC – The Western District of North Carolina courtroom buzzed with anticipation Friday afternoon as basketball icon Michael Jordan took the witness stand, marking a pivotal moment in the antitrust lawsuit filed by 23XI Racing and Front Row Motorsports against NASCAR. The trial, now in its first week, is centered on allegations that NASCAR, through its charter system and business practices, has operated as a monopsony—a buyer’s monopoly—stifling competition and limiting revenue for premier race teams.
Jordan, a co-owner of 23XI Racing alongside Cup Series driver Denny Hamlin and business associate Curtis Polk, is a central figure in the 15-month legal process that has now reached its trial phase. The core of the lawsuit posits that NASCAR, as the sole purchaser of premier stock car racing teams, has leveraged its market power to the detriment of competitors, particularly during the recent charter extension negotiations. While 13 of the 15 Cup Series teams ultimately agreed to the charter extension after protracted discussions, 23XI Racing and Front Row Motorsports held out, leading to this legal confrontation.
“Someone had to step forward to challenge NASCAR,” Jordan stated during his testimony, underscoring the motivation behind the legal action. He drew parallels between NASCAR’s operational structure and that of the National Basketball Association (NBA), where he achieved legendary status. Jordan proposed a revenue-sharing model closer to the NBA’s 50-50 split between league and teams, coupled with a more equitable distribution of growth responsibilities. “If you share responsibility, the healthiness of the sport can grow,” Jordan argued. “It needed to be looked at from a whole different perspective. That’s why we’re here.”
NASCAR’s defense, presented by attorney Lawrence Buterman, hinges on the organization’s status as a privately held entity by the France family, asserting it does not operate as a “stick-and-ball” league where teams effectively own the sport. Jordan, however, countered this by suggesting that such privately owned sports ventures are “rarely successful.”
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Despite initial reservations from his long-time advisor Curtis Polk, who cautioned that NASCAR was “risky to (his) brand and image” and could lead to significant financial losses, Jordan invested heavily in Hamlin’s vision for 23XI Racing. He is reportedly the majority owner, having injected an estimated $35 to $40 million into the team. Jordan identified himself as a lifelong NASCAR fan, fully embracing Hamlin’s projection of a potential $900,000 profit per team. While his team has achieved profitability, Jordan contends that the current charter system’s structure remains inequitable, finding the sport’s economic model “unfair” after deeper engagement.
The escalating cost of charters, with the third acquired costing $28 million, compared to $13.5 million for the second and $4.7 million for the initial purchase, reflects the perceived value and scarcity of these assets. Jordan explained his continued acquisition of charters, despite the contentious negotiations, by stating, “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 expressed hope for a more collaborative partnership model between NASCAR and its teams, believing it would enhance the overall value and growth of the business.
NASCAR’s defense strategy has also focused on portraying Curtis Polk as an outsider whose primary objective was to instigate litigation. Evidence presented included internal communications where Polk expressed a lack of personal interest in racing, describing it as “boring as shit” and “painful to watch.” The defense argued that while Jordan and Hamlin are passionate about the sport, Polk viewed it solely as a business opportunity. Buterman highlighted a text message where Polk outlined a plan to be a “pest” and a “mosquito bite every week” by leaking financial proposals to the media, a strategy Jordan seemingly endorsed with a “thumbs up” emoji. Polk’s efforts to rally smaller teams around a proposal for $11 million per chartered car, in contrast to the $20 million per car sought by 23XI and Front Row, were also detailed.
While Michael Jordan’s testimony drew significant attention, Heather Gibbs, daughter-in-law of NASCAR Hall of Fame team owner Joe Gibbs, delivered what many observers considered the most impactful testimony of the day. Gibbs spoke publicly for the first time about the November 2022 death of her husband, Coy Gibbs, the night after their son, Ty, won the Xfinity Series championship. Since then, Heather has become more deeply involved in Joe Gibbs Racing’s operations and the charter negotiations, gaining a stark understanding of the financial pressures on teams, particularly those without diversified business interests to offset potential losses.
Gibbs recounted writing a forceful letter to NASCAR leadership in response to league commissioner Steve Phelps’s remarks about “reckless” team spending. She acknowledged her respect for the France family but expressed strong disagreement with NASCAR’s economic model. The urgency of the charter deadline was emphasized, with Joe Gibbs reportedly pleading with Jim France, “don’t do this to us.” Heather described receiving the final charter agreement just one hour before the signing deadline, noting significant grammatical errors and a lack of guaranteed broadcast revenue beyond the initial seven years of the extension. Her description of Jim France’s dismissive response, “I’m done with the conversation” and “If I wake up and I have 20 charters, I have 20 charters,” highlighted the perceived intransigence of NASCAR’s leadership. Gibbs ultimately signed the charter to protect the legacy of Coy and JD Gibbs, fearing the consequences of not reaching an agreement.
During cross-examination, Gibbs clarified her use of “auto-renewal with terms” instead of “evergreen” or “permanent” charters, suggesting that the word “permanent” elicited a negative reaction from Jim France. The defense aimed to portray the charter system as dynamic, evolving with the sport, rather than a static, permanent franchise model.
NASCAR President Steve O’Donnell concluded his extensive testimony, spanning 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 competing series. O’Donnell highlighted that over 1,000 tracks exist in the U.S. and that only 30 have exclusivity clauses, suggesting ample opportunity for new racing ventures. He expressed concern about SRX’s potential impact on NASCAR’s broadcast rights agreement, citing a call from NBC Sports executive Sam Flood and noting Chase Elliott’s participation in an SRX event. O’Donnell also stated that GMS Race Cars purchased physical assets from SRX co-founder Ray Evernham for track day use, but not the series’ intellectual property, refuting claims that NASCAR’s actions had damaged SRX’s viability.
NASCAR’s defense countered the plaintiffs’ claims of anti-competitive non-compete clauses by framing them as a necessary byproduct of negotiations, ensuring team commitment and a unified front for broadcast deals. The significant increase in charter payouts and the rise in charter enterprise value from $1 million in 2016 to $45 million in the past season were presented as evidence of the sport’s financial health and appeal, despite ongoing litigation. However, 23XI and Front Row argue that permanent charters would elevate their value significantly beyond current figures. O’Donnell maintained that charters were not designed to be permanent due to anticipated evolutions in schedules and car technology.
The trial also delved into the proposed cost cap and cost floor for the 2025 charter negotiations. O’Donnell characterized team reception to a cost cap as divided, with dominant teams like Penske, Gibbs, and Hendrick expressing less enthusiasm compared to middle-tier teams. He cited Formula 1’s cost cap as a factor in increased team enterprise values. A cost floor proposal faced challenges, as some teams reported already operating below the proposed threshold.
The "four pillars" proposal from the teams, which sought $720 million annually ($20 million per chartered entry), was met with surprise by O’Donnell, who contrasted it with the prior rights agreement’s $800 million annual value, arguing such a distribution would leave insufficient funds for tracks and hinder industry growth. He noted that IndyCar teams receive approximately 25% of revenue, translating to $2-2.5 million per car, a figure disputed by plaintiffs’ counsel, who claimed IndyCar’s TV deal yields $8 million per entry.
O’Donnell reiterated his difficult experiences negotiating with Curtis Polk, describing him as lacking appreciation for the sport and operating solely as a businessman with a disruptive agenda. The defense maintained that Polk’s intention was to challenge the status quo, culminating in the lawsuit.
In a moment of contention, plaintiffs’ attorney Kessler questioned O’Donnell about NASCAR executives’ alleged lack of respect towards team owners, referencing text messages that disparaged Richard Childress. NASCAR’s legal team objected, citing the inflammatory nature of the texts and their inadmissibility as evidence.
Throughout the proceedings, District Court Judge Kenneth D. Bell has provided guidance, cautioning NASCAR that "growing the sport" might be interpreted as self-admission of market power. He also informed the jury that the trial, initially scheduled for 10 days, is likely to extend beyond its two-week timeframe, acknowledging the burden on their service while emphasizing the need for efficiency. The current projection places the trial’s conclusion around December 15th or 16th.
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