Legal battle between Michael Jordan and NASCAR may disrupt motorsports industry

CHARLOTTE, N.C. The dispute between Michael Jordans 23XI Racing and NASCAR is set to reach federal court Monday, in a case that could reshape American motorsports. The lawsuit, filed alongside Front Row Motorsports, raises antitrust allegations that have exposed internal communications, financial details, and tensions among top NASCAR executives and team owners.

Denny Hamlin, co-owner of 23XI Racing and three-time Daytona 500 winner, highlighted the stakes ahead of the two-week trial in the Western District of North Carolina. "Fans have been fed NASCARs narrative for decades," he posted on social media. "Starting Monday, the truth comes out. Change is coming."

NASCAR Commissioner Steve Phelps confirmed that efforts were made to settle the case before the trial began. The lawsuit involves 23XI Racingco-owned by Jordan, Hamlin, and Jordans longtime manager Curtis Polkand Front Row Motorsports, owned by Bob Jenkins, the 2021 Daytona 500 winner. Both teams declined to sign the 2024 charter agreement renewals, making them the only teams of 15 to do so.

The charter system, introduced in 2016, functions like a franchise model, guaranteeing teams a spot in all 38 races and a set payout. 23XI and Front Row argued that the new agreements failed to address revenue concerns, permanent charter status, and a say in governance. They contend NASCAR wields excessive control through exclusivity clauses, track ownership, and rulemaking, leading them to file an antitrust lawsuit.

The teams are seeking substantial compensation from NASCAR for legal expenses and losses incurred while operating as non-chartered open teams. Despite qualifying for races, 23XI and Front Row claim the financial model remains unworkable.

Pretrial discovery revealed NASCAR earned over $100 million in 2024. The process also exposed controversial communications from NASCAR executives, including disparaging remarks about Hall of Fame owners and threats to competing racing series. In return, 23XIs leadership made statements about the France family, highlighting the personal intensity of the conflict.

NASCAR has called on prominent team owners Rick Hendrick and Roger Penske to testify, though both have sought to limit or avoid deposition. Declarations from other team owners demonstrated broad support for the charter system, even as some acknowledged that 2025 agreements did not meet all demands.

The court is deciding whether Curtis Polk and Denny Hamlin may remain in the courtroom before their testimony. Michael Jordan has been granted full access during the trial. Representatives for 23XI and Front Row said Jordan and Jenkins will lead their case publicly.

The lawsuit could be resolved through settlement at any point, but if it goes to a jury verdict, the jury will determine damages, which Judge Kenneth Bell can adjust or triple, along with potential remedies to address any monopoly findings. Possible outcomes for NASCAR include selling the sport or tracks, dismantling the charter system, or issuing permanent charters. If NASCAR prevails, 23XI and Front Row may not continue beyond 2026, with charters likely sold to other interested buyers, including private equity firms. The last charter sale reportedly reached $45 million.

Source: AP Auto Racing

Author: Sophia Brooks