Explaining the 23XI/Front Row Motorsports Lawsuit Against Big NASCAR
The France family—most notably chairman Jim France, 79, and his executive-vice chair, niece Lesa France Kennedy, 63—has been running the sport that they largely own, NASCAR, as a “personal fee stub and piggy bank,” said Jeffery Kessler, lead attorney for an antitrust suit against NASCAR filed by two of the sport’s teams, 23XI Racing and Front Row Motorsports.
The suit seeks to break the monopoly hold that NASCAR has over big-time stock car racing, Kessler said. Big NASCAR, let’s call it.
Attorney Kessler is a heavyweight in this arena, if he does say so himself. As co-executive chairman of the law firm Winston & Strawn, he is “one of the world’s leading antitrust, sports law, and trial lawyers,” his personal biography states. He played a major role in suits that resulted in permission for college athletes to be paid, and he is credited with paving the way for the NFL’s unrestricted free agent policy, largely resulting from a 1992 lawsuit he filed. “He has served as lead counsel in some of the most complex antitrust, sports, and intellectual property litigations in the country.”
And this will prove to be complex. The suit against NASCAR is being filed on behalf of two NASCAR Cup teams, 23XI Racing, which fields Toyota cars for drivers Bubba Wallace and Tyler Reddick, and Front Row Motorsports, which backs Ford drivers David Gilliland and Michael McDowell. None of the other major multi-car teams have signed on.
The 23XI team is co-owned by NBA legend Michael Jordan and NASCAR driver Denny Hamlin, whose personal ride is with the Toyota team of Joe Gibbs Racing. Front Row is backed by Bob Jenkins, who made his fortune in fast food restaurants. Both teams intend to expand to three cars.
In a joint statement issued by both teams, they explained their motivation to go to court: “NASCAR and the France family operate without transparency, have stifled competition, and control the sport of stock car racing in ways that unfairly benefit them at the expense of team owners, drivers, sponsors, partners, and fans, through the following anti-competitive practices:
- Buying a majority of the premier racetracks that are exclusive to NASCAR races;
- Imposing exclusivity deals on NASCAR-sanctioned racetracks;
- Acquiring Automobile Racing Club of America (ARCA), the only notable stock car racing series competitor;
- Preventing teams from participating in any other stock car races, while also retaining ownership over Next Gen parts and cars; and
- Forcing teams to buy their parts from single-source suppliers chosen by NASCAR.
“No other major professional sport in North America is run by a single family that enriches themselves through these kinds of unchecked monopolistic practices.”
“There has never been a case that I have found that is as egregiously anti-competitive as this one,” Kessler said. “Here we have a sport where one family has basically used its power to create an absolute monopoly for the benefit of that family as opposed to being for the benefit of the teams, the drivers, the sponsors, the broadcasters and the fans.”
There are some obvious soft spots in the arguments. No one in the industry would consider the ARCA series to be a “notable competitor” to NASCAR, for example. Nor does NASCAR own its participating cars.
Front Row and 23XI were the only two teams to decline to sign a new charter arrangement that runs from the 2025 season to 2031. The charter system allows teams to field one car per charter, in return for a guaranteed starting spot and a share of a preferred purse. That’s especially valuable in the search for backing—attorney Kessler said in his press conference that it costs $18 million a year to field a competitive car for a season in NASCAR Cup—as charter teams can assure sponsors that they will be in every race, and consequently on every TV broadcast.
Charter prices fluctuate but have been about $30 million this year. IndyCar recently announced that it will pursue a system similar to the NASCAR charter arrangement.
Unless the suit prevails, both 23XI and Front Row are expected to buy a charter from Stewart-Haas Racing, which is leaving NASCAR at the end of 2024. Included in the teams’ statement: “In the coming days, we will file a preliminary injunction to enable our teams to race in the next calendar year under the 2025 charter agreement, while continuing to pursue our antitrust litigation. The filing will seek discovery from both NASCAR and Jim France related to their exclusionary practices and intent to insulate themselves from any competition. 23XI Racing and Front Row Motorsports will seek treble damages for the anti-competitive terms that teams have been subject to under the 2016 charter agreement.”
Hamlin, Jordan, and Jenkins were all quoted in the joint statement. Said Hamlin: “It’s actually pretty simple in my opinion. When I look around, I see that the best and most competitive sports in the world understand that when teams thrive, fans benefit, and that everyone who invests in making the sport a success should share fairly in that success. With the right changes, we can certainly make that a reality in racing.”
Said Jordan: “Everyone knows that I have always been a fierce competitor, and that will to win is what drives me and the entire 23XI team each and every week out on the track. I love the sport of 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 I’m willing to fight for a competitive market where everyone wins.”
And Jenkins: “I have been part of this racing community for 20 years and couldn’t be more proud of the Front Row Motorsports team and our success. But the time has come for change. We need a more competitive and fair system where teams, drivers, and sponsors can be rewarded for our collective investment by building long-term enterprise value, just like every other successful professional sports league.”
As of this writing, neither NASCAR nor the court has issued a statement regarding the lawsuit. It is unlikely the suit will affect the rest of the 2024 Cup season, which has six more races to go.
Look NASCAR is a privately owned coperation that puts on a racing series. It is not a public company and they can do as they please.
The reason NASCAR has done so well and lasted so long is due to strong benevolent dictatorship of Bill SR and Bill Jr. With the loss of Bill Jr NASCAR has struggled as others who due not understand the sport have tried to move from their base and failed. Like going to LA. That will never work and how many times do you need to fail. NASCAR will never out pace the NFL or MLB but they can do well with what they have been doing.
What they are proposing here will drive up cost even more and make ownership even more limited. The series is losing fans and sponsors so they need to get back to the basics. High cost have killed most series over the years and even crippled F1.
In racing money is the root of all evil. If you go back when cars were more simple and drives worked real jobs and raced for fun not the money in the past. That is when racing thrived.
You had drivers like Dale Sr who raced because he loved it and would have driven for a hot dog and a coke if that is all it paid. Those are the drivers we need not the ones chasing fame and money.
I agree. If you don’t like Nascar then start your own series and build it up to what Nascar is. No one is forcing these teams to race in Nascar. They chose to build a team and enter this series knowing that France owned and controlled the whole show. Invest your money somewhere else and stop crying. Maybe Nascar does need to change but let the “free” market decide that. Ultimately the fans will vote with their money and that will decide what happens to Nascar. I agree it needs to get back to Nascar’s roots when it was a “stock car” race with different engines and designs so it was more like the real cars.
NASCAR owns a majority of the premier tracks in the country. Try to start a new series and see how well the France family’s “free market” accommodates your need for race sites.
On a seemingly unrelated but perhaps not story. Renault has announced it will cease building F-1 engines even though development of the next (2026) was well under way. This led to speculation that Alpine would sold. Andretti Global name was first on everyones lips as a potential buyer. While Micheal Andretti has stepped down from his ownership role and Zak Brown has just resigned. Luca De Meo announced that Alpine is definitely not for sale. Mercedes will apparently supply Alpine with engines which is fortunate since Aston Martin is switching to Honda. That is just a short recap of the most recent events. Whats this got to do with Nascar? F-1 now has three races here in the states all in popular tourist locations providing a variety of other activities. And, while I don’t care, its puling in the celebrities which does increase interest. These races are now weekend prime time. F-1s revenue jumped up a notable 45% in the first quarter of this year. So while Renault has pulled the plug on its F-1 engine program, Ford has teamed up with Red Bull, Audi even more so with Sauber and and… so Nascar may have much bigger problems than just two teams filing an antitrust lawsuit.
F1 and NASCAR really don’t compete. Two different demographics.
NASCAR needs to get someone with the Bill France JR thinking and power and let them run the company.
This chase fabricated racing in stages and playoff is a joke.
I have thought what if Dale SR had lived. He would have made a great replacement for Bill Jr. He knew racing, he understood the fans, he held power over the other drivers when he spoke.
He is the one that could have avoided the last 25 years of mistakes.
The future of racing will depend on keeping costs down. This is how teams will survive. Make it cheaper. Also keep it competitive but let the teams have some areas to work.
Limit testing but let them work at the track.
Great point! Dale Sr. would have made a fantastic replacement for Bill Jr. He is probably rolling over in his grave with the current stage racing, competition cautions and chase format.
Demographics change. Nascar was once a primarily ‘southern sport’ then increased television coverage changed that. There was that period where seemingly everyone had to a driver number stuck on their rear window like family stick figures. Peoples interest have waxed and waned and not only because of what has changed in Nascar. Peoples tastes can often be as fickle as fashion. Todays big thing forgotten tomorrow. You can watch the pickle ball finals on any given weekend. Who’d have thunk it? So there is that ‘if you build it people will come.’ factor. And our world is more connected than ever before. Earnhardt was one of, if not the most, outspoken critic of the Hans device in Nascar. He said regarding it – ” Tie kerosene rags around your ankles so ants don’t eat your candy ass.” Is that the kind of thinking that would have avoided “the last 25 years of mistakes”?
The only thing Earnhardt was wrong on was safety.
But in the end he still made it safer.
Most else he understood the game. Good driver, evil drivers, nice drivers.
He created the NASCAR t shit and die cast market. He was one of the first yo start making shirts and helped the die cast take off.
He understood it was not pure racing they would keep it interesting. It was a show. Did he get breaks, yes because he filled the seats.
NASCAR is still a southern and Midwest series.
Earnhardt also helped Jeff Gordon as he knew he was a good driver and it gave him someone to play off if. He may put Jeff in the wall but they were in business together.
NASCAR needs to get back to the basics. Fill the stands they have and try to draw sponsors back.
Like it or not, NASCAR is a monopoly, as more sports have been born or grown the competition for fans and their money is strong, think UFC, Pickleball, Poker Tour, Supercross, F1 etc. During the boom years 90’s to 2008 NASCAR drivers made record amounts of $ sponsors paid millions to be on cars, track signs etc. but as these other sports were born or grew NASCAR didn’t keep up, they’ve tried to make lots of changes but the reality is NASCAR makes Billions with TV deals, Track ownership, Title Sponsor deals etc., while most teams struggle to break even and drivers make peanuts compared to stick and ball athletes despite the risks that come with racing. Why do you think Tony Stewart and Chip Ganassi left NASCAR? Cuz they were losing their A$$ES, if Jim and Lesa were smart they’d be wise to make a settlement and resturcture NASCAR to share some of the Billions they make with the teams, while I don’t have first hand knowlege of what the teams get with a charter I know it’s a small amount compared to what NASCAR is raking in, this lawyer that MJ and Front Row have is no dummy, he’s gonna win and he’ll get treble damages, in the long run financially stronger teams and better paid drivers will grow the sport, look at the poularity of F1 once Bernie was gone, it’s flourished and the racing sucks compared to NASCAR there’s very little passing and what 4 or 5 cars that can win on any Sunday.
NASCAR lost me a long time ago. I don’t find the cars interesting but the drivers are. This will be curious to see where it goes and how long it takes.
Nascar Need’s to be reined in a bit, when a driver like Kyle Larson has to have a special exemption to continue his championship season ( which he had already qualified for), so he could participate in the Indy 500, something is wrong. Everyone wanted to see him try both races. He brings fans to both venues! All drivers should be able to race wherever/whenever, but that’s not what France and Company want. The Frances have bought out many great race venues and dictated which tracks will be built and where. They have also lied as to where they would be building race tracks after they put some out of service. A more realistic payout from all the TV royalties needs to be developed, and not just for their pockets.