2 Cup teams are trying to transform the sport with a lawsuit against NASCAR

Two Cup teams, including one co-owned by Michael Jordan, are trying to transform NASCAR with an antitrust lawsuit against the sanctioning body and NASCAR Chairman Jim France.

Jeffrey Kessler, a sports labor and antitrust litigation specialist representing 23XI Racing and Front Row Motorsports, said: “There has never been a case that I have found to be as blatantly anti-competitive as this one.

“Here we have a sport where one family has essentially used its power to create an absolute monopoly for the benefit of that family, rather than for the benefit of the teams, the drivers, the sponsors, the broadcasters and the fans.”

NASCAR had no comment Wednesday when contacted by NBC Sports.

Kessler, Front Row Motorsports owner Bob Jenkins and Curtis Polk, who co-owns 23XI Racing with Jordan and Denny Hamlin, spoke to reporters Wednesday a few hours after the lawsuit was filed in U.S. District Court in Charlotte, North Carolina. The plaintiffs ask for a jury trial.

23XI Racing, co-owned by Michael Jordan, files lawsuit against NASCAR by Front Row Motorsports

23XI Racing and Front Row Motorsports were the only two Cup teams not to sign a new charter agreement with NASCAR.

Jordan released a statement on Wednesday.

“Everyone knows that I have always been a fierce competitor, and that drive to win is what drives me and the entire 23XI team on the track every week,” said Jordan. “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 that I am willing to fight for a competitive market where everyone wins.”

Two years ago, Polk said the “economic model of sports is really broken for teams.” He noted Wednesday that nothing has changed.

“The French family has dictated every aspect of stock car racing in America, from the gas and tires we use, to the parts we have to buy for the race cars, to the schedule, the rules, the tracks we race on, the fees we race and how our races are consumed by the public,” said Polk, whose team employs drivers Bubba Wallace and Tyler Reddick.

“This audit has had a depressing economic impact on the teams’ profitability, their enterprise value and the salaries of drivers, crew and race shops. … The new charter is an attempt to further marginalize team voices in the sport, relinquish control of valuable intellectual property and create an adversarial financial relationship with our drivers. The goal is to consolidate the power of the French family solely for their own benefit.”

NASCAR was founded in 1948 by Bill France Sr.. He led the sport until January 1972, when his son, Bill France Jr., took over the reins of NASCAR.

Bill France Jr. was chairman and CEO until October 2003, when his son, Brian France, assumed the role.

Brian France stepped down from that position in August 2018 following his DWI arrest and was replaced by his uncle, Jim France, who still oversees the sport.

The lawsuit alleges that Front Row Motorsports, which won the 2021 Daytona 500 with Michael McDowell, “has never generated any profits.”

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In response to a question from NBC Sports, Polk noted the differences in finances for NASCAR drivers and teams compared to other professional sports.

Polk said teams will receive “approximately more than $400 million” in the new charter agreement, which takes effect next year. Polk estimated — NASCAR, a private organization, does not release financial figures — that the sport “generates nearly $3 billion a year. So the teams only share about 13% of the total pot that the sport generates.”

Polk estimated that the average salary for drivers of the 36 chartered Cup teams is $3 million per year. Polk noted that this amount would be about 3% of the money he believes NASCAR generates annually.

NFL players, who have the benefit of a collective bargaining agreement, receive 48.8% of NFL revenue in a 17-game season. NBA players receive 51% of basketball-related revenue through the collective bargaining agreement with the league.

Kessler said NASCAR’s financial information would be available through discovery.

“That’s one of the benefits of federal antitrust litigation,” he said. “We will be able to obtain financial data. We’ll be able to track the money. We will be able to see exactly how exploitative this system has been and how many injuries it has caused to the teams and drivers.”

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As part of the allegations of NASCAR’s monopolistic operations, the lawsuit noted that pressure groups had been exerted to sign the charter agreement last month.

Cup teams formed the Race Team Alliance in July 2014 to “jointly negotiate a fairer deal with NASCAR on behalf of the teams,” according to the lawsuit. This led to the original charter agreement in 2016, which was extended in 2021. The current charter agreement expires this year. Negotiations have taken place over the past two years.

According to the lawsuit, NASCAR ceased negotiations with the RTA in March 2024 and NASCAR “insisted that each team negotiate the renewal of its Charter Agreement individually” rather than bargaining collectively.

The lawsuit states that teams received the final version of the agreement on September 6 at 5:00 PM ET and were told they must sign by 6:00 PM ET or risk losing their charters. That deadline, the lawsuit states, was pushed back to midnight.

Although all Cup teams except 23XI Racing and Front Row Motorsports signed the charter agreement last month, Kessler said that should not be taken as an indication that the deal is good.

“In every antitrust case, the victims take what they can get,” Kessler said. “…But sometimes it takes people who have the courage, the resources and the willingness to stand up and say, ‘We’re not going to take it anymore,’ and that will benefit them all.”

In the lawsuit, 23XI Racing and Front Row Motorsports seek to:

• “A preliminary injunction that will allow them to accept the 2025 Charter Agreement and operate until the matter is resolved.

• “Permanent injunctive relief to end NASCAR’s exclusionary practices and restore competition to the relevant market.

• “The discovery of both NASCAR and Jim France related to their exclusionary practices and intent to isolate themselves from any competition.

• “Trebled monetary damages for the damages Plaintiffs have suffered over the past four years as a result of having to compete under the anticompetitive, below-market terms of the 2016 Charter Agreement and for the damages Plaintiffs will suffer in the future as a result of having to compete under the anticompetitive terms of the 2025 Charter Agreement while they litigate this matter through litigation.”

When asked for further details on Wednesday, Kessler said he “didn’t want to formulate a specific endgame” but said: “These teams did not bring this case to make only modest changes. The point is not that the teams currently have a D-plus deal and will settle for a D deal or a C-plus deal.

“What needs to happen is a fundamental change that will allow any successful team to realize a fair return on its investment. Where drivers can be fairly compensated. Where the teams manage their intellectual property. Where investments can be made and realized, just like you see in all other sports. That is a fundamental change. So I’m not going to guess what exactly that will look like. We will find out.”

Both 23XI Racing and Front Row Motorsports plan to race next year even if they don’t have a charter. Both organizations are two-car teams. They all have an agreement to purchase a charter from Stewart-Haas Racing.

When Polk was asked if he, Jordan and Hamlin would consider leaving the sport and closing 23XI if they don’t get the results they are looking for, Kessler responded.

“Our customers are in this until the end,” he says. “What that will be depends on what the courts decide and allow, but they are going to do their best to stay competitive for as long as possible. We expect this to end in a legal victory or a settlement that moves this sport forward.”