Antitrust and sports lawyer Jeffrey Kessler believes a lawsuit filed by 23XI Racing and Front Row Motorsports will be like other moments in professional sports that have brought change.
The joint antitrust lawsuit was filed Wednesday morning in the Western District of North Carolina against NASCAR and CEO Jim France. It alleges that through anti-competitive practices NASCAR and the France family operate without transparency, have stifled the competition, and control the sport in an unfair way that is at the expense of the race teams, drivers, sponsors, partners and fans.
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“This is reminiscent for me of many sports that have gone through a transformative model,” said Kessler, who was hired by the race teams at the beginning of the year to advise them on their negotiations with NASCAR. “(It’s) sort of a moment when the legal style basically confronts them and says, either you’re going to voluntarily change or you’re going to be changed and you can either get on the bus or get run over by the bus. No one wanted this litigation but NASCAR didn’t really give these teams any choice — you either submit to the bully or you fight. They’re going to fight.
“We think at the end of the day, NASCAR’s going to have to change because that’s what the legal system is going to require.”
There will be no settling for crumbs, Kesseler said. It’s also not about changing the deal by only a slight amount.
“If NASCAR is willing to change, it’s got to be a significant change to make a fair system for the teams,” he said. “If they’re not willing to do that kind of a deal, then they’ll take this case all the way to a jury and a judge, and that’s why I say they’ll be forced to change. It’s the same type of thing I went through with the NCAA, who had a choice to make. They could keep fighting in court and keep losing and have the new system thrust upon them or in that case, they finally sat down and said, we’re ready to transform the sport and we’ll be a part of it.
“That’s the type of choice that NASCAR is going to face.”
There have been two years of negotiations — which at times turned tense and standoffish — between NASCAR and the teams over the 2025 Charter Agreement. On Sept. 6, NASCAR sent a final offer with a deadline for teams to sign. 23XI Racing and Front Row Motorsports were the two holdouts of the 15 teams.
Bob Jenkins has fielded his Cup Series operation since 2005. But while saying he enjoys the sport and is passionate about racing, “at some point, it’s got to make financial sense. Every year of either losing money or trying to barely break even, after a while just wears on you.”
The teams came up with four key issues for their negotiations. In addition to making the charters permanent, the teams want a larger share of the revenue, a cut on business deals that use drivers or team likenesses, and involvement in governance issues. Jenkins said all of the team owners initially locked arms on moving forward together to accomplish a new charter agreement.
“NASCAR set out on this journey to basically divide and conquer, and they were largely successful,” Jenkins said. “I hate to say that but they were largely successful. Dusted off the 50-year-old playbook and said, ‘I’ll be dang, this thing still works, we can still intimidate the teams into signing a deal.’ September 6, that’s exactly what happened.”
According to Jenkins, and as outlined in the lawsuit, the teams received an email at 5pm that gave them one hour to review a 112-page document and sign or their charters would be pulled. After pushback from the teams, the deadline was extended to midnight.
“In my opinion, so many of the owners had long-term agreements with sponsors and OEMs, crew chiefs and drivers, they felt compelled to have to sign it because they couldn’t put the tens of millions of dollars at risk that would cost them if they didn’t sign it,” Jenkins said. “So, I think if you talk to those owners individually, that’s going to be the story you hear from almost all of them. But I just felt like it was time to stand up for this; I know that Curtis [Polk], Michael [Jordan], and Denny [Hamlin] all feel the same way, and we said, you know what, we’re going to fight this fight. We’re going to do what’s right and we want to fix this sport and get it healthy.”
Jenkins said 23XI Racing and Front Row Motorsports jointly filed the lawsuit because they are aligned in their goals and passion for NASCAR, and are committed and determined to carry the effort through.
Hamlin has been a Cup Series driver for Joe Gibbs Racing since 2005. Alongside friend and NBA great Michael Jordan, he founded 23XI Racing in 2021.
“I didn’t realize until re-investing the money that I’ve made as a driver back into the sport to put on a show for Jim France and NASCAR, how unfair this whole system is,” Hamlin said. “I didn’t realize they would exercise the power that they did in an unfair manner, in my opinion, and we just got to a tipping point where we all said, enough is enough and let’s exercise some options.”
Polk, who is also a co-owner of 23XI Racing, acknowledged the hope was bargaining a fair deal with NASCAR and not being forced into signing something they weren’t comfortable with. When that time came, the advice of Kessler was sought as to what rights and steps the teams could take, which resulted in the lawsuit.
NASCAR and Speedway Motorsports control the racetracks on the schedule, which doesn’t leave room for a competing series. NASCAR also owns the Next Gen car and parts must be purchased from the suppliers NASCAR selected at the prices NASCAR negotiated. The teams cannot take the car and race anywhere else.
“We knew we had no leverage in this whole process,” Polk said. “We’d meet with (NASCAR) about the things we thought would be better for the sport, not just for the teams but for the drivers, the fans, and for NASCAR and the France family to try and grow the sport. … We built this team for the sole purpose of running at the NASCAR Cup level. There’s nothing else I can do with these assets. I’m in a situation where I basically invested tens and tens of millions of dollars in a system where one person, basically, has the right to tell me I’m not going to get anything more and I can take it or leave it on September 6, and I knew that didn’t sound right and that’s why I went to Jeffrey and that’s why we’re where we are today.”