CHARLOTTE, N.C. (AP) — NASCAR argued in its latest court filing that Michael Jordan is suing the stock car series to earn a permanent charter that no other teams possess, and that neither 23XI Racing nor Front Row Motorsports has suffered any harm by racing as “open” entries.
NASCAR also indicated in its 34-page response filed late Monday that it has buyers interested in the six charters that have been set aside as a federal judge decides if the two teams can have them back for the remaining 11 races of this season. NASCAR is prepared to immediately begin the process of allocating the charters elsewhere.
These latest arguments are part of the ongoing federal antitrust lawsuit filed by 23XI and Front Row against NASCAR in a fight over charters, which are essentially franchise tags. 23XI, owned by basketball Hall of Famer Michael Jordan and three-time Daytona 500 winner Denny Hamlin, and Front Row, owned by entrepreneur Bob Jenkins, were the only two organizations out of 15 not to sign extensions on new charter agreements.
All the teams were fighting to have the charters made permanent during more than two years of extension negotiations, but NASCAR refused and its final offer was a seven-year extension with an additional seven-year option beyond that. 23XI and Front Row won a temporary injunction to be recognized as chartered as the case heads toward a Dec. 1 trial date.
The injunction was eventually overturned and appealed by the teams. U.S. District Judge Kenneth Bell will hear arguments Aug. 28 on the matter. 23XI and Front Row as “open” teams do not receive the same financial percentages as chartered teams.
NASCAR asked in the filing that 23XI and Front Row return all money they were paid when they were recognized as chartered teams this season. NASCAR said the money would be redistributed to the 30 current chartered teams.
A rulebook change in July after the chartered status was stripped from the two organizations ensured that the six cars aren't in danger of not qualifying for a race; starting spots are guaranteed to the 36 chartered cars in every 40-car field.
“Mr. Jordan has said he wants to use the litigation to grant him a permanent Charter that no other team has,” NASCAR alleged.
23XI and Front Row have maintained they will continue to race even if they must do so as open teams. NASCAR has argued that when the two organizations did not sign the extensions they lost all rights to charters and the sanctioning body should be free to move them.
“Plaintiffs’ theoretical inability to obtain Charters post-trial also does not justify NASCAR from selling or transferring Charters, because Plaintiffs do not have Charters now because of their own strategic choice," NASCAR said in its filing. "Plaintiffs had multiple opportunities to acquire 2025 Charters, and they squandered them.”
NASCAR also argued that a court cannot order the private company into a partnership with teams it is not interested in doing business with. Another argument by NASCAR is that 23XI and Front Row have not been harmed by not being chartered because their drivers have not left the team and the rule change protects them from missing races; Tyler Reddick of 23XI has clauses in his contract that he can leave if his car is not chartered.
Additionally, NASCAR said it pays teams a higher percentage than even Formula 1 does and that its payout structure to teams proves it is not a monopoly because it was increased first by 28% in the 2016 charter agreement, and then by 62% in the 2025 agreement.
“NASCAR pays Teams more than even Formula 1 as a percentage of profit," NASCAR said. “Plaintiffs ignore the pay raises the Teams received. Instead, they focus on a text during negotiations for the 2025 Charter that said an internal version of the May 2024 draft contained ‘zero wins’ for Teams.
"Plaintiffs ignore that the actual May 2024 draft proposed to Teams carried forward the biggest win for the Teams — a massive pay increase — that was set out in the December 2023 draft. It also gave Charter holders an opportunity to obtain any improved extension terms NASCAR offered to third parties and increased Teams’ ability to receive investor funding, among other benefits.”
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AP auto racing: https://apnews.com/hub/auto-racing
Jenna Fryer, The Associated Press
