2 Cup teams want to change the sport with a lawsuit against NASCAR

2 Cup teams want to change the sport with a lawsuit against NASCAR

Two Cup teams, including one co-owned by Michael Jordan, are trying to reshape NASCAR with an antitrust lawsuit against the sanctioning body and NASCAR Chairman Jim France.

Jeffrey Kessler, a sports labor and antitrust litigation specialist who represents 23XI Racing and Front Row Motorsports, said: “I have never seen a case as egregiously anti-competitive as this one.”

“Here we have a sport where one family has essentially used its power to create an absolute monopoly for the benefit of that family, rather than for the benefit of the teams, the drivers, the sponsors, the broadcasters and the fans.”

NASCAR had no comment when contacted by NBC Sports on Wednesday.

Kessler, Front Row Motorsports owner Bob Jenkins and Curtis Polk, who co-owns 23XI Racing with Jordan and Denny Hamlin, spoke to reporters Wednesday, hours after the lawsuit was filed in U.S. District Court in Charlotte, North Carolina. The plaintiffs are seeking a jury trial.

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23XI Racing and Front Row Motorsports were the only two Cup teams that did not sign a new charter agreement with NASCAR.

Jordan issued a statement on Wednesday.

“Everyone knows that I have always been a fierce competitor, and that desire to win is what drives me and the entire 23XI team every week,” Jordan explained. “I love racing and the passion of our fans, but the way NASCAR is run today is unfair to teams, drivers, sponsors and fans. Today’s action shows that I am ready to fight for a competitive marketplace where everyone wins.”

Two years ago, Polk said the “economic model of sports is really broken for teams.” He noted on Wednesday that nothing had changed.

“The French family has dictated every aspect of stock car racing in America, from the gas and tires we use, to the parts we have to buy for the race cars, to the schedule, the rules, the tracks on which we race and the fees we have to pay to race and how our races are consumed by the public,” said Polk, whose team includes drivers Bubba Wallace and Tyler Reddick.

“This control has a depressing economic impact on the profitability of teams, their corporate value and the salaries of drivers, crew and racing workshops. …The new charter is an attempt to further marginalize team voices in the sport, cede control of valuable intellectual property and create adversarial financial relationships with our riders. Their goal is to consolidate the power of the French family for their sole benefit.”

NASCAR was founded by Bill France Sr. in 1948. He led the sport until January 1972, when his son Bill France Jr. took over the reins of NASCAR.

Bill France Jr. served as Chairman and CEO until October 2003, when his son Brian France assumed the position.

Brian France resigned from that position in August 2018 following his DWI arrest and was replaced by his uncle Jim France, who continues to oversee the sport.

The lawsuit states that Front Row Motorsports, which won the 2021 Daytona 500 with Michael McDowell, “never made a profit.”

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In response to a question from NBC Sports, Polk pointed to the financial differences between NASCAR drivers and teams compared to other professional sports.

Polk said teams will receive “approximately over $400 million” in the new charter agreement, which begins next year. Polk estimated — NASCAR, a privately held organization, does not disclose its financials — that the sport “generates nearly $3 billion per year.” So teams only share about 13% of the total pot the sport generates.”

Polk estimated that the average driver salary for the 36 chartered Cup teams is $3 million per year. Polk noted that figure would represent about 3% of the money he estimates NASCAR generates per year.

NFL players who benefit from a collective bargaining agreement receive 48.8% of NFL revenue in a 17-game season. NBA players receive 51% of basketball income through the collective bargaining agreement with the league.

Kessler said NASCAR’s financial information would be available through discovery.

“That’s one of the benefits of federal antitrust litigation,” he said. “We will be able to obtain financial records. We will be able to follow the money. We will be able to see exactly how exploitative this system was and how much damage it caused to teams and drivers.”

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Changes come after Michael McDowell blew up and Josh Berry fell on his head at Daytona and Corey LaJoie fell on his head at Michigan.

As part of its prosecution of NASCAR’s monopolistic activities, the lawsuit noted that printing teams were coerced into signing the charter agreement last month.

Cup teams formed the Race Team Alliance in July 2014 to “jointly negotiate a fairer deal with NASCAR on behalf” of the teams, according to the lawsuit. This led to the original charter agreement in 2016, which was renewed in 2021. The current charter agreement expires this year. The negotiations have taken place over the last two years.

The lawsuit says NASCAR stopped negotiating with the RTA in March 2024 and that NASCAR “insisted that each team negotiate the renewal of its charter agreement separately” rather than negotiate together.

The lawsuit states that the teams received the final version of the agreement at 5:00 p.m. ET on September 6 and were told they had to sign by 6:00 p.m. ET or risk losing their charters. That deadline was pushed back to midnight, the lawsuit says.

Although all Cup teams except 23XI Racing and Front Row Motorsports signed the charter agreement last month, Kessler said that should not be taken as an indication that the deal is good.

“In every antitrust case, the victims take what they can get,” said Kessler. “…But sometimes there have to be those who have the courage, the resources and the willingness to stand up and say, ‘We’re not going to take it anymore,’ and that will benefit everyone.”

In the lawsuit, 23XI Racing and Front Row Motorsports claim:

  • “An injunction allowing them to accept and act upon the 2025 Charter Agreement until the case is resolved.
  • “Permanent injunctive relief to end NASCAR’s exclusionary practices and restore competition in the relevant market.
  • “The discovery by both NASCAR and Jim France related to their exclusionary practices and intent to isolate themselves from all competition.
  • “Triple monetary damages for the harm Plaintiffs have suffered over the past four years as a result of having to compete under the anti-competitive, below-market terms of the 2016 Charter Agreement and for harm Plaintiffs will suffer in the future “Because they were required to compete under the Charter Agreement, they are violating the anti-competitive provisions of the 2025 Charter Agreement while pursuing this case in court.”

When asked for more details Wednesday, Kessler said he “won’t give a specific endgame” but said, “These teams haven’t made this case to just make minor changes.” This isn’t about the teams currently have a D-Plus deal and settle for a D-Deal or a C-Plus deal.

“What needs to happen is a fundamental change where every successful team can get a reasonable return on their investment. Where drivers can be fairly compensated. Where teams control their intellectual property. Where investments can be made and realized, just like you see in all other sports. This is a fundamental change. So I’m not going to guess what exactly that will look like at the moment. We’ll find out.”

Both 23XI Racing and Front Row Motorsports plan to race next year, even if they don’t have charters. Both organizations are two-car teams. Everyone has an agreement to purchase a charter from Stewart-Haas Racing.

When Polk was asked if he, Jordan and Hamlin would consider quitting the sport and shutting down 23XI if they don’t get the result they want, Kessler responded.

“Our customers are in this until the end,” he said. “What that will be depends on what the courts decide and allow, but they will do their best to stay in competition for as long as possible.” We expect this to result in a legal victory or settlement that will advance this sport.”