rifan muazinCharlotte, NC – The legal battle between NASCAR and its premier Cup Series teams, 23XI Racing and Front Row Motorsports, entered a new phase on Wednesday as the sanctioning body began presenting its defense in a trial that could significantly reshape the sport’s financial landscape. The core of the dispute centers on allegations that NASCAR, leveraging its status as a monopsony—the sole purchaser of premier stock car racing teams—has financially disadvantaged teams and stifled competition through its controversial charter system.
Day 8 of the trial, held in the Western District of North Carolina, saw NASCAR’s Chief Financial Officer, Greg Motto, take the witness stand. His testimony focused on the financial intricacies of NASCAR’s operations, particularly the $400 million distributed annually to the France family trust. NASCAR, structured as a private S Corporation for tax purposes, passes its financial outcomes directly to its shareholders, who are members of the France-Kennedy family.
The plaintiffs, represented by lead attorney Jeffrey Kessler, have argued that NASCAR could afford to distribute $720 million annually to teams in charter payments, a stark contrast to the $431 million allocated for 2025. Both Motto and NASCAR’s financial expert, Mark Zmijewski, countered this assertion, stating that such a distribution would lead to NASCAR’s bankruptcy. This directly contradicts the findings of the teams’ financial expert, Dr. Edward Snyder.
Kessler’s strategy has consistently highlighted a hypothetical financial scenario, suggesting that if teams were compensated more equitably, all levels of NASCAR operations, from executives like Jim France to track maintenance staff, would have seen adjustments in their compensation. He pointed to the 2020 COVID-19 pandemic, during which NASCAR implemented widespread salary cuts, as an example of how such adjustments could occur across the organization.
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Further financial arguments from the plaintiffs included the sale of a significant portion of the former Auto Club Speedway land for $544 million. Kessler posited that these funds could have been directed towards team payments rather than reducing debt incurred from the 2019 International Speedway Corporation merger. He also noted that as an S-Corp, NASCAR is not obligated to issue dividend payments to the France family. Motto maintained that tax obligations necessitate these payments to the family. Kessler, however, argued that selling assets improves NASCAR’s equity by reducing debt, and that the financial transfers to the France family are essentially internal reshuffling.
"You do whatever you can to minimize the taxes to the France family," Kessler stated to Motto during cross-examination, suggesting a deliberate effort to benefit the family’s financial interests. When Motto presented a projected $10 million year-over-year revenue loss for 2025, Kessler dismissed it as a "rounding error" for an entity of NASCAR’s magnitude.
Kessler also challenged Professor Zmijewski’s analysis, arguing that the expert failed to adequately account for NASCAR’s financial records within a "but for" scenario—one where teams would be more financially robust in the absence of alleged anticompetitive practices. This divergence in interpretation, where both sides analyzed the same financial data to reach opposing conclusions, underscored the central conflict of the trial.
Following seven and a half days of plaintiff testimony, the defense began its presentation with NASCAR calling its witnesses. The first to testify was John Probst, NASCAR’s Senior Vice President of Innovation and Racing Development. Probst’s testimony primarily addressed the development of the Next Gen car and sought to counter the narrative that teams suffer from a "reckless" spending problem.
Probst, with a background in motorsports including CART Indy Car and Red Bull Racing, joined NASCAR in 2016. His attempt to draw parallels between the current situation and the American Open Wheel Split of the 1990s was met with objections from Judge Kenneth D. Bell, who deemed the line of questioning "out in left field." Probst was permitted to offer a brief historical overview, explaining how the Indy Racing League (IRL) split from CART by creating its own series and teams, working with OEMs to expand its ranks.
The court heard detailed explanations of wind tunnel technology, with Probst referencing a facility owned by Chip Ganassi as an example of the significant expenses teams incur for aerodynamic testing. Kessler objected to the lengthy discussion, prompting Judge Bell to urge the proceedings to move forward.
Probst articulated the philosophy behind the Next Gen car—a single-source parts supplier specification car—stating that the design prioritized fan interest in manufacturer-specific engines and bodies. By standardizing other components, Probst argued, teams would significantly reduce spending on wind tunnel testing and in-house parts development. He claimed that 30 of the 36 charter holders endorsed this concept before development commenced. Probst highlighted that this development has cost NASCAR $14 million, with teams contributing nothing as they no longer conduct their own research and development on the car’s core components. "I thought that was a pretty compelling endorsement by the team owner council," Probst remarked.
He further testified that NASCAR monitors team part purchases from approved vendors, requesting data to demonstrate that increased part acquisition does not directly correlate with on-track success. Probst cited Team Penske as an example of a team that consistently achieves victories with minimal re-purchasing of single-source parts, contrasting this with 23XI Racing, which he stated has spent the most on parts over the past two years.
Regarding the repair of parts, Probst explained that NASCAR prohibits it, interpreting "repair" by teams as an opportunity for "modify" and "improve." This policy, he contended, prevents a spending war and upholds the parity central to the Next Gen platform. He acknowledged that some teams, like Front Row Motorsports, have expressed frustration over the higher cost of repeatedly purchasing new parts versus repairing existing ones.
Under cross-examination, Kessler clarified that his clients are not challenging the Next Gen car itself but rather the non-compete clauses within the charter agreement. Probst was questioned about studies supporting the argument that preventing Cup Series cars from being used in other leagues is "pro-competitive," leading to a back-and-forth over legal definitions.
Internal emails revealed that before the Next Gen car, NASCAR considered adapting the previous Gen 6 car into a spec platform. Probst explained that the decision to develop a new car over modifying the Gen 6 was to "increase the risk to NASCAR of a copycat series." When pressed on NASCAR’s fears, Probst stated, "We don’t fear competition."
Kessler then presented evidence suggesting that NASCAR’s introduction of exclusivity clauses followed the development of the Racing Technology Association’s (RTA) mid-week summer dirt series and the emergence of the Superstar Racing Experience (SRX). Probst deferred questions about track sanctioning agreements to other departments and compared NASCAR’s brand protection strategy to that of Coca-Cola, stating that the company would not develop a new product only to allow a competitor to immediately replicate it. He also asserted that no team had ever requested to use Gen 6 or Next Gen cars in non-NASCAR divisions, adding, "All they have to do is ask." Kessler countered that NASCAR would not permit such usage, to which Probst responded, "We would discuss it." Probst declined to comment on NASCAR Commissioner Steve Phelps’ reported desire to "put a knife" into the SRX series.
An internal document was presented showing NASCAR executives, including Probst, tasked with calculating the cost of starting a Cup Series team from scratch. Probst explained this was an effort to gain a more accurate understanding of competition costs, given perceived inaccuracies in team-reported expenses. Kessler suggested this exercise was linked to "Project Gold Codes," NASCAR’s contingency plan to operate the Cup Series "in-house" if teams refused to sign the 2025 charter extension. Probst maintained the project’s motivations were altruistic. He confirmed contributing to the Gold Codes document and using data from the aforementioned cost study.
The cross-examination concluded with a discussion of a text message exchange between Probst and his chief of staff, Tom Swindell, following the charter extension deadline. Swindell’s message, "RIP Project Gold Codes," and Probst’s affirmative reply, coupled with Swindell’s inquiry about the leverage of 23XI and Front Row in holding out, were presented by Kessler to suggest Project Gold Codes was a serious threat rather than a mere contingency. Probst attributed the exchange to personal friendship.
Meanwhile, NASCAR CEO Jim France concluded his testimony, having previously been evasive on several points. When directly asked about his opposition to permanent charters, France cited an inability to predict the future and discomfort with making promises he couldn’t keep. He was shown letters from prominent team owners like Roger Penske and Rick Hendrick advocating for "evergreen" ownership statuses. France reiterated his apprehension about making agreements that extend indefinitely in a "changing world."
France disputed an internal NASCAR graph that reportedly showed 21 wins or neutral outcomes for NASCAR versus one for the teams regarding charter negotiations, stating he was not comfortable making permanent charter agreements without a clear understanding of future needs. When asked what certainty he would require, he responded, "Don’t know ’til we get there."
The trial is expected to conclude next week, with NASCAR aiming to finish its case by Friday. Judge Bell has extended court days to accommodate the proceedings, pushing closing arguments to Monday at the earliest. A separate issue arose concerning the source of information regarding Richard Childress’s exploration of selling a portion of his team to Bobby Hillin Jr., which was protected by a non-disclosure agreement. Childress expressed agitation when this information was used against him. Team attorneys have requested clarification on the source of this breach of NDA, with Judge Bell indicating he would issue an order if a resolution wasn’t reached by Thursday morning.
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