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Michael Jordan’s 23XI Racing Scores a Legal Victory Against NASCAR: A New Era of Competition?

Arthur Ling by Arthur Ling
December 19, 2024
in Motorsports
Reading Time: 4 mins read
0
Michael Jordan’s 23XI Racing Scores a Legal Victory Against NASCAR: A New Era of Competition?

Oct 27, 2024; Homestead, Florida, USA; 23XI team owner Michael Jordan watches during the Straight Talk Wireless 400 at Homestead-Miami Speedway. Mandatory Credit: Jasen Vinlove-Imagn Images

In a groundbreaking legal battle that could reshape the future of NASCAR, Michael Jordan and Denny Hamlin’s 23XI Racing team, along with Front Row Motorsports (FRM), secured a major win in their ongoing lawsuit against the sport’s governing body. A court ruling granting a preliminary injunction allows both teams to compete as chartered entities in 2025 while continuing their fight against what they describe as NASCAR’s “monopolistic practices.”


Why the Preliminary Injunction Matters

For 23XI and FRM, the stakes couldn’t have been higher. Charter status guarantees entry into every race, including lucrative events like the Daytona 500, and secures vital sponsorships. Without it, the teams risked losing star drivers like Tyler Reddick and Noah Gragson, as well as major sponsors like Monster Energy and Love’s Travel Stops. These losses would have spelled disaster for their operations.

The court’s decision ensures the teams retain charter status while the lawsuit proceeds. This ruling also forces NASCAR to approve the teams’ purchases of additional charters from the now-defunct Stewart-Haas Racing (SHR), clearing the way for 23XI and FRM to expand their operations to three cars each in the 2025 season.


The Lawsuit: Taking on NASCAR’s Monopoly

The legal battle began on October 3, when 23XI and FRM accused NASCAR of anti-competitive practices. Central to their claims are allegations that NASCAR holds a monopoly in premier stock car racing by controlling team participation, limiting parts sourcing to NASCAR-approved vendors, and barring teams from competing in other stock car series.

Judge Kenneth Bell’s ruling didn’t resolve the antitrust claims but acknowledged the broader market realities. He stated:

“NASCAR possesses monopoly/monopsony power in the relevant market, which is the market for premier stock car racing teams in the United States.”

Bell further explained that NASCAR’s Cup Series holds a 100% market share in premier stock car racing, making it the sole gatekeeper for which teams can compete at the sport’s highest level. This admission strengthens the plaintiffs’ arguments as the lawsuit moves forward.


Stewart-Haas Racing Charters Finally Approved

A critical aspect of the ruling involves the Stewart-Haas Racing charters. Both 23XI and FRM had agreements in place to purchase charters from SHR, but NASCAR withheld approval, reportedly using the transfers as leverage to force the teams to drop the lawsuit.

With the injunction, NASCAR is now compelled to approve these transactions, allowing 23XI to field Tyler Reddick, Bubba Wallace, and Riley Herbst in 2025. FRM, meanwhile, plans to race Todd Gilliland, Noah Gragson, and potentially Zane Smith. However, NASCAR could appeal this decision, and if the teams ultimately lose the lawsuit, the charter purchases might be revisited.


What’s at Stake for NASCAR?

This legal battle has far-reaching implications for the future of NASCAR. If 23XI and FRM succeed, it could lead to significant changes in how NASCAR operates, potentially opening the door to more competition and reducing the sanctioning body’s control over teams. For now, the ruling is a temporary victory, but it signals that the courts are taking the allegations of monopolistic behavior seriously.


Attorney Jeffrey Kessler’s Reaction

Jeffrey Kessler, representing 23XI and FRM, expressed optimism about the preliminary injunction:

“The court’s ruling allows 23XI and Front Row Motorsports to race existing cars as chartered teams in next year’s Cup Series. The decision also requires NASCAR to approve both teams’ purchases of a third charter from Stewart-Haas Racing and allow these cars to also race as chartered teams in the 2025 season.”

Kessler reiterated his confidence in the case’s merits, emphasizing the importance of fostering a more competitive and fair environment in stock car racing.


What’s Next?

While 23XI and FRM celebrate this legal milestone, the fight is far from over. NASCAR retains the option to appeal the ruling, and the broader antitrust claims remain unresolved. However, for now, the teams have secured their immediate futures, ensuring stability for their drivers, sponsors, and operations.

This ruling also reignites debate over NASCAR’s business practices and could mark the beginning of a new era in the sport. As the legal drama unfolds, all eyes will remain on the courtroom—and the racetrack.


Key Takeaways

  • Preliminary Injunction Granted: 23XI Racing and FRM will compete as chartered teams in 2025.
  • Charters Approved: NASCAR must allow the purchase of Stewart-Haas Racing’s charters, enabling team expansion.
  • Antitrust Claims Pending: The court acknowledged NASCAR’s monopoly but hasn’t ruled on the core lawsuit.
  • Future at Stake: If successful, the lawsuit could dramatically alter NASCAR’s operational structure.
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