"I am once again amazed at the effort going on to burn this house down over everyone's head but I’m a fire marshal and I'll be here in December if need be."
That was a warning, expressed on June 25 by Judge Kenneth D. Bell, to both parties involved in the 23XI Racing and Front Row Motorsports v NASCAR antitrust lawsuit over what could happen if a settlement is not reached in advance of a final judgment.
It’s now Thanksgiving weekend, with less than a week before a trial that is poised to reshape premier Stock Car racing in North America begins in earnest, and the figurative house is very much starting to ember.
Fact discovery is an ordinary part of the pre-trial process, one where both parties get to subpoena documents and communications pertinent to the claims but this particular case has shown just how much animus and frustration exists between those involved in the business of Cup Series competition.
23XI, FRM's claim
23XI Racing is co-owned by legendary sportsman Michael Jordan, alongside veteran driver Denny Hamlin and longtime Jordan confidant Curtis Polk. Their claim, which was filed on October 2, 2024 in the Western District of North Carolina, alleges that NASCAR engaged in anti-competitive practices to maintain monopsony control over premier Stock Car racing teams.
A monopsony is a market dynamic in which there is only a single buyer of a service. In this case, NASCAR is the alleged monopsonist and premier Stock Car teams are the service. 23XI and Front Row argue in their suit that NASCAR has imposed contractual restrictions -- including non-compete clauses with both the teams and tracks -- to impede competition.
Section 13 of the charter agreement includes a no-sue provision that the two teams claim is a violation of the Sherman Antitrust Act. Section 6 of the charter documents includes a non-compete clause aimed to prevent teams from competing in a rival series, although NASCAR does spell out exceptions for entities like Formula 1, IndyCar, World of Outlaws and CARS Tour.
23XI and Front Row, who have hired lead attorney Jeffrey Kessler, says the anti-competitive actions are designed to suppress how much revenue teams receive from NASCAR while also preventing another series from acquiring their services within the marketplace.
In addition, 23XI and Front Row claim that NASCAR’s acquisition of the ARCA Racing Series and merger with track-owning sister company International Speedway Corporation were all moves made to solidify that monopsonistic status.
The two teams take legal exception to the fourth-year NextGen car as well, arguing that NASCAR controls the base cost for teams through the single-source supplied nature of a platform -- with components that any only be purchased through vendors selected by the Sanctioning Body.
What led here?
The lawsuit was brought after 23XI and Front Row refused to sign the final charter agreement extension offered by NASCAR after nearly three years of often contentious negotiations between all involved.
The charter system is the document that governs the business and competition of the Cup Series between NASCAR and the teams that compete at the highest level.
A full primer of how that system works can be read below.
Much of what was said and done over the three years of negotiations has been retroactively documented as part of fact discovery. Most of the back-and-forth, naturally, came down to money and what percentage of revenue charter holding teams would receive after NASCAR completed its current broadcast rights agreement with FOX, NBC, Turner Sports, and Amazon Prime.
But the teams also wanted their charters, which can be sold at increasingly valuable rates, to become permanent assets rather than one that needed to be renegotiated every seven years. There were also quibbles over to what extent NASCAR could use a team's intellectual property and governance matters.
Ultimately, the charter agreement that 13 of the 15 organizations signed for 2025-2031 received a 62 percent increase from the previous agreement --- which NASCAR says is all new revenue from the new broadcast rights agreement. Teams also received a total of $50 million that previously went to tracks from the 2016 document to the 2025 iteration.
23XI and Front Row did not agree to those terms and sued NASCAR less than a month later.
NASCAR's defense
NASCAR’s primary defense, on its face, is that 23XI and Front Row have not in good faith brought an antitrust claim against the Sanctioning Body. Instead, the Association claims the two teams only sued as a result of not getting the charter terms they sought.
Lead attorney Christopher Yates has frequently characterized the claim as ‘negotiation through litigation.’
The Sanctioning Body says it is not in violation of antitrust law because it has not restrained competition while also increasing the enterprise value of owning teams at the highest levels since the charter system was instituted in 2016.
Lead attorney Christopher Yates has argued in court multiple times something to the effect of 'how can my clients be acting anti-competitively when they have increased payouts to teams' and 'wouldn't a monopsony suppress revenue and payouts?'
Since the advent of the charter system, the enterprise value of owning a single entry has increased from a million dollars to upwards of $50 million per the latest transactions on the open market.
That value, NASCAR has argued, is the result of senior leadership increasing the value to charter holding members over the course of two different charter agreements. That value, and the single-source supplied car and its promise of cost containment, is what led Jordan to invest with Hamlin and Polk to begin with.
Unsealed documents show Front Row Motorsports general manager asserting a conviction that Jordan believes a charter will someday be worth $200 million. NASCAR will argue, again, that 23XI and Front Row cannot claim anti-competitive behavior while also believing enterprise charter value could reach those amounts.
Another defense Yates will deploy is that 23XI and Front Row have agreed to terms they now argue as anti-competitive and illegal and have done so multiple times. Both teams have purchased charters from other organizations over the past decade and never once raised concern with NASCAR that any of the sections were illegal until the end of the negotiations period upon filing the lawsuit.
NASCAR will also likely argue that exclusivity and non-compete provisions are legal business practices in sports to ensure the ability to properly market and promote events to fans and broadcasters without generating confusion within the broader sports marketplace.
Settlement Talks
The two parties were required by the court to engage in some form of settlement mediation over the summer. That took place in New York City on August 5, 2025 with former Chief Legal Officer of the National Basketball Association Jeffrey serving as appointed mediator.
That meeting lasted roughly an hour and produced no positive momentum whatsoever.
Next, NASCAR petitioned the judge for a court mandated mediation session that would take place in the courtroom. The judge granted that motion and the two sides met, in the words of Judge Bell ‘in good faith’ over the course of two days in October without any agreement.
There, the mediation fell apart over who was responsible for all the mounted legal fees, according to a report in The Athletic even as the two sides agreed on some sort of system that would create charter permanency.
What's next?
The trial will begin on Monday with jury selection and is scheduled to run for 10 days over the next two weeks, Monday through Friday and Monday through Friday again. It will not be broadcast and only those who attend will be able to report what takes place through hand-written notes.
Both sides have a lengthy list of witnesses. 23XI and Front Row have filed 858 exhibits to be used over the course of the trial and NASCAR has listed 961. The witness list has not been made public, but it likely includes various team owners, executives and field experts.
The arguments will be heard before six jurors and a unanimous decision will need to be reached for Judge Bell to issue a remedy. In this trial, 23XI and Front Row have the burden of proof and will need to convince the jury of a ‘preponderance of the evidence,’ which basically means ‘more likely than not.’
23XI and Front Row are seeking over $300 million in damages. If they win, the jury would decide how much of that gets paid out, but those damages can also only go back four years.
Judge Bell could triple the damages, a legal remedy designed to punish egregious conduct. Bell would also determine all antitrust remedies like forcing NASCAR to sell tracks, or eliminate the single-source system of the current generation of car, eliminate exclusivity clauses or what to do with the charter system on the whole.
An underreported element to a potential 23XI and Front Row victory is that it still doesn’t guarantee they get their charters back. As per the terms of a preliminary injunction appeals decision earlier this year, both teams lost their chartered status, and their ask in damages include the loss of their charters.
While the judge could theoretically rule anything, it seems unlikely that 23XI and Front Row could ask for that monetary amount and have their lost charters returned to them. NASCAR would argue that it cannot be forced to do business with an entity it doesn’t want to.
Judge Bell has also indicated an openness to view the charter system as it is structured to be illegal. This is why the 13 non-party teams all signed written affidavits expressing the two sides to settle before producing a decision that renders their investments into this system moot.
Should NASCAR win, 23XI and Front Row would be at risk of closure without having charters and would certainly be out of the Cup Series by the end of the 2026 season. NASCAR could then sell those charters, if Judge Bell doesn't rule the system illegal, to other interested parties. NASCAR had already fielded offers from interested parties over the six charters in limbo before Judge Bell forced the Sanctioning Body to hold off until after the trial.
Regardless of who wins in federal district court, the result will almost certainly be appealed to the Fourth District of Appeals in Richmond, Virginia and the losing party in that court could even petition the United States Supreme Court.
This is to say nothing of the countersuit that NASCAR filed against 23XI and Front Row, one that accused the teams and Polk of acting anti-competitively and participating in an illegal cartel to coerce the Sanctioning Body into unfavorable charter terms.
That countersuit was dismissed at summary judgment by Judge Bell but NASCAR has also indicated a likliehood that it would appeal that decision at the Fourth Circuit as well.
In other words, the trial doesn't mark the beginning of the end, but rather the end of the beginning, unless the two sides are able to reach a settlement, which could be done at any point, even after a jury decision.
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