NASCAR is facing a federal antitrust lawsuit from two of its teams, with one co-owned by basketball legend Michael Jordan. The lawsuit alleges that NASCAR’s new charter system restricts competition unfairly by binding teams to the series, its tracks, and suppliers. 23XI Racing and Front Row Motorsports filed the suit in North Carolina after two years of negotiations with NASCAR and its 15 charter-holding organizations in the Cup Series.
The lawsuit accuses NASCAR and chairman Jim France of monopolistic behaviour, claiming they are imposing their will on teams. NASCAR had offered a revenue-sharing model, which most teams signed under pressure. However, Jordan’s 23XI Racing and Front Row Motorsports refused to sign and have now taken legal action with the help of antitrust attorney Jeffrey Kessler.
The teams are seeking damages for anti-competitive terms since the charter agreement’s inception in 2016. Jordan, expressing his competitive spirit, stated the need for a fairer system benefiting teams, drivers, sponsors, and fans. NASCAR, headquartered in Daytona Beach, Florida, has not responded to the lawsuit publicly.
The charter system, introduced in 2016, aimed to ensure 36 entries in every Cup Series race while providing revenue sharing. However, teams argue that the system has left them without a path to profitability. Negotiations between teams and NASCAR have involved demands for increased revenue, governance input, and a share of deals involving participants’ rights.
The lawsuit alleges that NASCAR’s tactics coerced teams into signing the agreement, threatening to revoke charters and the charter system itself if teams did not comply. The departure of teams like Furniture Row Motorsports, unable to turn a profit despite winning the 2017 championship, underscores the teams’ struggle for sustainability.
The legal action represents a significant challenge to NASCAR’s long-standing business practices. Teams claim that NASCAR’s historical operations left them in financial vulnerability, competing for sponsorships and lacking stable revenues. The lawsuit raises critical questions about the fairness of NASCAR’s operations and the need for a more equitable system benefiting all stakeholders in the sport.