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In a legal battle where interpretations of financial data diverge as sharply as opinions on the racetrack, NASCAR’s defense team commenced its case on Wednesday, the eighth day of the ongoing trial against 23XI Racing and Front Row Motorsports. The core of the litigation revolves around allegations that NASCAR, leveraging its position as the sole purchaser of premier stock car racing teams, has engaged in monopsony practices to financially disadvantage competitors and stifle overall competition within the Cup Series. While NASCAR’s monopoly status itself is not under scrutiny, the court has previously established its monopsony power, leaving the jury to determine if this power has been wielded to the detriment of teams through the intricate charter system.
The day’s proceedings saw NASCAR Chief Financial Officer Greg Motto take the stand, dedicating nearly two hours to detailing the $400 million in distributions allocated to the France family trust. Structurally, NASCAR operates as a private S Corporation, meaning its financial outcomes are passed directly to its shareholders, who are exclusively members of the France-Kennedy family.
Jeffrey Kessler, lead counsel for the plaintiff teams, argued that NASCAR possessed the financial capacity to distribute $720 million annually in charter payments to teams, a figure significantly higher than the $431 million allocated for 2025. Both Motto and NASCAR’s financial expert, Mark Zmijewski, countered this assertion, claiming such an increase would lead to the organization’s bankruptcy. This stands in direct opposition to the projections offered by the teams’ financial expert, Dr. Edward Snyder. Kessler has consistently maintained that NASCAR’s financial models, presented by its executives and experts, unrealistically assume static salaries and unchanged operational structures. He has repeatedly invoked the 2020 COVID-19 pandemic, during which NASCAR implemented widespread salary reductions, as evidence that compensation could be adjusted across all levels, including top executives and track maintenance personnel, if teams received what plaintiffs deem equitable earnings.
Kessler further highlighted NASCAR’s sale of a significant portion of the former Auto Club Speedway land for $544 million, suggesting these funds could have been directed towards team payments rather than servicing debt incurred from the 2019 International Speedway Corporation merger. He also pointed out that, as an S-Corp, NASCAR is not obligated to issue dividend payments to the France family. Motto maintained that NASCAR’s tax obligations necessitate these payments to the family. Kessler, however, characterized the sale of company assets as an improvement to overall equity by reducing debt, and the transfer of funds between NASCAR and the France family trust as an internal reallocation. "You do whatever you can to minimize the taxes to the France family," Kessler stated during cross-examination of Motto. When discussing NASCAR’s projected $10 million year-over-year revenue loss for 2025, Kessler dismissed it as a "rounding error" for an entity of its magnitude.
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Kessler also cross-examined Zmijewski, whom the report refers to as "Professor Z," questioning the expert’s methodology in accounting for NASCAR’s financial records within the hypothetical "but for" scenario where teams were not subject to anticompetitive harm. The day concluded with the recurring theme: the same financial records yielding diametrically opposed conclusions from each side.
The trial shifted gears on Wednesday afternoon as NASCAR began presenting its defense witnesses, following a pattern of direct examination, cross-examination, and re-examination. The first witness called was John Probst, NASCAR’s Senior Vice President of Innovation and Racing Development. Probst focused primarily on the development of the NextGen car and reiterated NASCAR’s stance that teams suffer from a "reckless" spending problem. Probst’s career spans roles at Ford Motor Company, competition in the CART Indy Car Series, and stints with Red Bull Racing and Chip Ganassi Racing before joining NASCAR in 2016.
NASCAR attempted to introduce Probst’s testimony regarding the American Open Wheel Split as a cautionary tale against the formation of competing series. However, Judge Kenneth D. Bell sustained objections from the plaintiff’s counsel, deeming the line of questioning "out in left field." Probst was permitted to briefly describe the historical split, noting that the Indy Racing League (IRL) initiated its own series, formed teams to fill its grid, and collaborated with OEMs, ultimately leading to the division.
Probst also provided an explanation of wind tunnel testing, referencing a facility owned by Ganassi, to illustrate the significant costs associated with such aerodynamic research for teams. Kessler objected to Probst’s extended discussion on wind tunnel history, prompting Judge Bell to urge the defense to "move on." Probst then explained the NextGen car’s design philosophy, emphasizing its single-source parts supplier model, which was intended to focus fan attention on manufacturer-specific engines and bodies while reducing the need for teams to invest heavily in wind tunnel testing and proprietary part development. He stated that the concept received endorsement from 30 of the 36 charter holders prior to its formal development, a process that cost NASCAR $14 million but incurred no direct R&D expenses for the teams.
Probst testified that NASCAR monitors team parts purchases from approved vendors, requesting this data annually to demonstrate that increased part acquisition does not correlate with on-track success. He cited Team Penske as an example of consistent success with minimal re-purchasing of single-source parts, contrasting this with 23XI Racing’s higher expenditure over the past two years. Regarding team repairs, Probst explained that NASCAR prohibits modifications under the guise of repairs, as this would allow teams to "modify" and "improve" parts, potentially initiating a spending war and undermining the parity intended by the NextGen platform.
During cross-examination, Kessler emphasized that his clients are not challenging the NextGen car itself but rather the non-compete clauses within the charter agreement. Kessler questioned Probst about any studies supporting the restriction of Cup Series cars in other leagues as "pro-competitive," leading to a debate over the precise wording of the questions. Probst acknowledged that prior to the NextGen car’s development, NASCAR had considered making the previous Gen6 car a spec platform. However, an internal email revealed that the modified Gen6, dubbed Gen6*, was deemed to carry a higher risk of a "copycat series." When asked about NASCAR’s concerns, Probst stated, "We don’t fear competition."
Kessler then linked NASCAR’s imposition of exclusivity clauses to the recent development of a mid-week summer dirt series by the Race Team Alliance (RTA) and the emergence of the SRX series. While NASCAR’s legal team objected, Judge Bell permitted the line of questioning. Probst deferred questions regarding track sanctioning agreements to other departments and likened NASCAR’s brand protection efforts to those of Coca-Cola, arguing against allowing competitors to replicate proprietary designs. He also stated that no team had ever requested permission to use Gen6 or NextGen cars in non-NASCAR divisions, asserting that such requests would be considered. Kessler expressed skepticism, suggesting NASCAR would not permit such usage. Probst responded that "We would discuss it." Kessler also referenced a text message from NASCAR Commissioner Steve Phelps suggesting action against the SRX series, to which Probst deferred to Phelps for an explanation.
Kessler presented an internal document outlining NASCAR executives’ task of calculating the cost of launching a Cup Series team from scratch. Probst explained this was an effort to gain a more accurate understanding of competition costs, as teams often provide misleading or incomplete financial data. Kessler posited this was in preparation for "Project Gold Codes," NASCAR’s contingency plan to operate the Cup Series internally if teams refused to extend their charters in 2025. Probst maintained the exercise was altruistic and fact-based. He confirmed contributing to the Gold Codes presentation using data from the cost-calculation study, though he stated he did not solely author the document.
Kessler concluded his cross-examination by referencing a text message exchange between Probst and his chief of staff, Tom Swindell, the morning after the September 6, 2024, charter extension deadline. Swindell’s message "RIP Project Gold Codes" and Probst’s affirmative reply, followed by Swindell’s inquiry about the leverage of 23XI and FRM in their holdout, were presented to imply Project Gold Codes was more than a mere contingency. Probst attributed the exchange to a personal friendship and casual work-related conversation.
Following Probst’s testimony, the court heard again from Jim France, NASCAR CEO. After a previous session where France offered numerous "I do not know" or "I do not remember" responses, he directly addressed his opposition to permanent charters for Cup Series team owners. "I don’t have a sightline to the future, and I don’t feel comfortable making a promise I don’t know if I can keep," France stated. He was presented with letters from prominent owners Roger Penske, Rick Hendrick, Joe Gibbs, and Jack Roush urging him to make ownership statuses "evergreen," a move that would enhance team equity without direct cost to NASCAR. France reiterated his discomfort with making permanent agreements in a "changing world." He conceded that NASCAR had made concessions during negotiations, though an internal graph presented by the teams indicated NASCAR wins or neutral outcomes in 21 instances versus one for the teams. When asked what certainty he would require to consider permanent charters, France responded, "Don’t know ’til we get there."
Judge Bell informed the jury they would be required to return the following week, noting NASCAR’s intention to conclude its case by Friday evening. The original ten-day trial schedule has been extended due to a slower pace, necessitating an additional hour each day this week. Closing arguments are now anticipated no earlier than Monday morning.
A procedural issue arose concerning the source of information about Richard Childress’s exploration of selling a portion of his Cup Series team to a group led by Bobby Hillin Jr. This information, protected by a non-disclosure agreement, was presented by NASCAR’s attorney during Childress’s cross-examination on Tuesday, visibly agitating the team owner. Plaintiff attorney Danielle Williams indicated her intention to raise six questions on the matter after the jury was dismissed, but Judge Bell declined to hear them, directing both parties to resolve the issue by Thursday morning or face a court-ordered resolution. Williams expressed concern that NASCAR had not yet provided the relevant documents to the defense, and they sought to identify the source of the broken NDA.
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