NASCAR Antitrust Trial Intensifies as Team Owner Details Financial Struggles and Executive Defends Controversial Clauses

The antitrust trial pitting 23XI Racing and Front Row Motorsports against NASCAR entered its third day with a rigorous examination of NASCAR’s Executive Vice President and Chief Strategy Officer, Scott Prime, followed by the testimony of Front Row Motorsports owner Bob Jenkins. The proceedings delved into the intricacies of the charter agreement, intellectual property rights surrounding the NextGen car, and the contentious negotiations that have led to this legal showdown.

Scott Prime, continuing his testimony from the previous day, faced probing questions from 23XI and FRM attorney Jeffrey Kesseler. The exchange, at times, became heated, prompting Kesseler to offer an apology for his raised voice, to which Prime responded with understanding, acknowledging the passionate nature of the proceedings.

A significant portion of Prime’s examination focused on the "goodwill provision" within the charter agreement. Kesseler challenged the terminology, suggesting it was a misnomer for an anti-competitive measure. The provision, as explained, stipulates that individuals with a 10 percent ownership stake in a Cup Series team are subject to restrictions on competing in or owning interests in other racing series without NASCAR’s explicit approval. Furthermore, departing team owners must observe a 12-month waiting period before engaging in such ventures in alternative series. Prime maintained that he viewed this as a provision of goodwill, a stance Kesseler rigorously contested.

The discussion then shifted to the NextGen car’s intellectual property restrictions. Kesseler sought to establish that these restrictions were a deliberate strategy to stifle competition and trade, a central tenet of the lawsuit. Evidence presented indicated that Prime had previously expressed concerns about the previous car generation, the Gen-6, posing an "increased risk to NASCAR of copycat series" due to its less stringent IP protections. This suggests NASCAR’s motivation for tighter controls on the NextGen car was to prevent teams from replicating or racing similar machinery in non-NASCAR sanctioned events. Prime, however, testified that this was not a point of contention with the teams, who he stated understood and endorsed the NextGen’s design and its associated protections, which also contributed to cost containment. Kesseler countered by noting that teams do not possess formal voting rights under the charter rules.

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Internal communications revealed during the trial highlighted the escalating tensions during negotiations for the 2025 charter extension. An email from Prime to NASCAR executive Joie T. Phelps on February 10th expressed disappointment over the race teams’ decision to halt negotiations and explore "all our options." The teams’ demands at that juncture included a 45 percent share of industry revenue, exemption from the Driver Ambassador Program fees, 30 percent of new revenue generated from team intellectual property, and permanent charters.

When these demands were not met, Prime, according to discovered documents, contemplated contingency plans. These included reducing the number of charters to 32 and implementing a "first come, first serve" system among existing teams, a tactic Kesseler characterized as creating artificial scarcity. Another option was a hard deadline for charter renewals, which ultimately materialized. A more drastic measure, dubbed "Project Gold Codes," involved NASCAR taking operational control of the sport, running races independently, and fielding its own drivers and cars.

Phelps’s response to these contingency plans, as revealed in an email, underscored the high stakes: "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 used this exchange to illustrate what he argued was monopolistic behavior, stating, "Only a monopolist could say this… ‘Take my offer and if you don’t take it, you will no longer be in this business, and someone else will take your place.’" Prime, in his defense, clarified that these were merely contingency plans in case teams formed a breakaway series, and that parallel efforts were underway to "find a middle ground." Despite the looming deadline, NASCAR did not ultimately issue new charters to other parties.

The conversation then turned to the potential for a breakaway series. Kesseler questioned where such a series would race, given NASCAR’s track exclusivity clauses. Prime suggested that numerous tracks, including short tracks and street courses, could be utilized, referencing NASCAR’s origins with short tracks. Kesseler dismissed this comparison to 1948, highlighting the financial realities, such as NASCAR’s reported $50 million loss over three years in the Chicago street race. Prime countered that "locking up tracks" was part of multi-year scheduling agreements with broadcasters like TNT, who desired specific venues. Kesseler argued this did not necessitate new, multi-year exclusivity clauses. When asked if any track had requested exclusion from other lucrative events, Prime stated he had never considered the question.

The focus then shifted to "The Amanda Chart," a visual representation of the race teams’ 22 demands during negotiations, which allegedly showed only a single "win" for the teams. This chart was named after Amanda Oliver, NASCAR’s Chief Legal Officer. Internal communications from a May 20-21 text thread between Prime, O’Donnell, and Phelps revealed senior leadership’s disagreement with CEO Jim France’s negotiating posture.

An exchange between O’Donnell and Phelps starkly illustrated this internal dissent. O’Donnell relayed conversations with NASCAR legal counsel and leadership, noting that while the meeting was deemed "productive," the teams would not receive all their demands. Phelps responded with incredulity, calling the situation "insanity" and pointing to the chart showing "zero wins for the teams." He further expressed concern about a "middle position" that would leave them "dead in the water" and "fucked moving forward." Prime characterized the approach as a "bold strategy" of "here is a bit more money, fuck off everywhere else." O’Donnell lamented that this approach was leading NASCAR towards a "comfortable 1996, fuck the teams, dictatorship, motorsport, redneck, southern, tiny sport."

Despite these internal concerns, teams were presented with a September 6 deadline to sign the extension agreement, which contained only the single concession for the teams. While initially given an hour, NASCAR eventually extended the deadline to midnight that day. Prime described this as a "gun to the head" offer, a sentiment Kesseler used to press Prime on whether this was Jim France’s desired outcome. Prime stated he did not know Jim France’s intentions. Ultimately, 13 of the 15 Cup Series teams signed the agreement, while 23XI Racing and Front Row Motorsports did not, leading to the current lawsuit.

Prime did acknowledge, in a May 20 text message to Phelps, that he had advocated for permanent charters to the Board of Directors but encountered a "brick wall" with Jim France. He noted that other NASCAR officials either did not speak up or conceded on all points. Phelps expressed his disappointment and planned to discuss the matter further. However, Prime consistently maintained that NASCAR never seriously considered revoking charters, evidenced by two passed deadlines without new charters being issued.

Kesseler pressed Prime on the consequences for teams not signing by the deadline. Prime reiterated that a deadline was necessary for NASCAR to prepare for the 2025 season. When pressed further on what would happen if 23XI and Front Row did not sign, Prime stated, "The charter agreement would expire." He elaborated that their terms would no longer be valid, implying the charter would be revoked, as they are not evergreen.

The latter half of Wednesday’s proceedings saw Bob Jenkins, owner of Front Row Motorsports, take the stand. Jenkins, often overshadowed by co-owners Denny Hamlin and Michael Jordan at 23XI Racing, became the central figure in the courtroom. Jenkins testified to significant financial losses, stating he loses approximately $6.8 million annually and has never achieved profitability with his race team. He also confirmed he does not draw a salary as an owner. His involvement is limited, attending only about a dozen races per year and visiting the shop 6-7 times annually.

The cost of operating under the NextGen car model was a key point of Jenkins’ testimony. He cited annual expenditures of $4.7 million on car components, a substantial increase from the $1.8 million spent under the previous car generation. He highlighted that under the NextGen, teams are required to send damaged parts back to NASCAR-mandated vendors for repair, a process that costs his team $30,000 per week for an undamaged car refurbishment. When questioned about his continued investment despite these losses, Jenkins expressed his belief in the endeavor and a sense of responsibility to his 150 employees.

Jenkins recounted receiving the "take it or leave it" offer on September 6th while at dinner with his parents, unaware of the impending deadline. He described the overwhelming influx of texts and calls upon leaving the restaurant. He noted the significant emotional distress experienced by other team owners, including Joe Gibbs, who felt compelled to sign and expressed regret for letting Jenkins down. Jenkins emphatically stated that "not a single owner said, ‘I was happy to sign it.’" He characterized the final agreement as "backwards," "insulting," and akin to "taxation without representation," asserting NASCAR’s unilateral power.

While acknowledging the conceptual soundness of the charter system introduced in 2016, Jenkins argued that the 2025 iteration lacked necessary refinements. He expressed hope that rectifying the system would eventually enhance the value of NASCAR teams, emphasizing that his critique was not aimed at the France family’s overall contributions to the sport but specifically at the charter agreement.

During cross-examination by NASCAR attorney Lawrence Buterman, Jenkins faced questions similar to those posed to Denny Hamlin. Buterman questioned the legitimacy of suing NASCAR over non-compete clauses while implementing them in his own driver contracts. Jenkins’ defense echoed Hamlin’s, arguing that as a non-monopolistic entity, he provides drivers with options.

Buterman challenged Jenkins’ reported losses, suggesting profits were being diverted through his other companies. Jenkins’ foundation, Lakeway Christian Schools, has been presented as an alternative for potential sponsors or pay drivers. Matt Tifft, for example, was offered the option to donate $500,000 to the school in 2020, though a health issue ended his season prematurely. Chandler Smith has paid $1.5 million this year to race for Front Row’s Truck Series team. Jenkins maintained that no sponsors or drivers have donated to Lakeway.

Buterman also questioned why Front Row pays its drivers only 8.5 percent of team revenue while simultaneously arguing that NASCAR underpays teams by offering them only 25 percent of sanctioning body revenue. Jenkins countered by highlighting the significantly higher expenses incurred by teams, particularly the $350,000 cost of a NextGen car, a stark contrast to a basketball, which he used as an analogy.

The cross-examination delved into Jenkins’ decision to run five races unsponsored with his Long John Silvers franchise, a business he owns and has passed on to his sons. Buterman implied this was a choice to incur losses rather than seek alternative sponsorship arrangements. Jenkins defended his position, explaining that the cost of sponsorship is fixed, and deviating from it would jeopardize his broader business relationships.

Buterman concluded his line of questioning by suggesting Front Row was seeking additional funds from NASCAR to compensate for a business that was already unprofitable before the charter system. He also asserted that Jenkins had advocated for smaller field sizes and the elimination of open entries to increase his team’s share of NASCAR revenue. Jenkins countered that a more exclusive entry system elevates the value for all participants, and that open teams generally served as slower field fillers, adding little value except at the Daytona 500. Jenkins’ cross-examination is scheduled to continue on Thursday.

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