What to know as Michael Jordan's dispute with NASCAR heads to trial
A trial starting Monday in a Charlotte courtroom will pit NASCAR against two racing teams—including one co-owned by Basketball Hall of Famer Michael Jordan—in a case that could reshape how stock-car racing operates in the United States.
Those teams argue that NASCAR violated antitrust laws by exploiting its dominant position in stock-car racing to restrict teams’ independence and earning potential. The lawsuit could have deeper implications because it threatens to revolutionize NASCAR’s business model.
Litigation has been contentious throughout the lead-up to the trial, which is expected to last 10 days. If there isn’t a settlement, expect an appeal no matter which side wins. Here’s what you need to know about the legal battle as the trial begins.
Who is involved?
23XI Racing and Front Row Motorsports filed a lawsuit against NASCAR in federal district court in October 2024. Jordan started 23XI Racing in 2020 alongside driver Denny Hamlin, likely a future NASCAR Hall of Famer, and Curtis Polk, Jordan’s longtime business partner. Fast-food entrepreneur Bob Jenkins owns Front Row Motorsports, which began racing full time in the Cup Series, NASCAR’s top national series, in 2005. The plaintiffs are represented by Jeffrey Kessler, one of the nation’s most prominent antitrust lawyers, who litigated NCAA v. Alston on behalf of the athletes.
NASCAR was founded in 1948, after Daytona Beach, Florida, businessman Bill France Sr. gathered drivers and promoters to create a sanctioning body for stock-car racing the previous year. The France family has maintained ownership of the company since its founding. France’s son Jim and his granddaughter, Lesa France Kennedy, run NASCAR alongside Commissioner Steve Phelps and President Steve O’Donnell. NASCAR is represented by Chris Yates, an attorney who has defended sports organizations such as the Ultimate Fighting Championship and U.S. Soccer in antitrust cases.
What is at issue?
NASCAR’s governance model is at the core of the dispute. NASCAR employs a top-down approach, operating as both the organizer and governing body of stock-car racing. From that position, it dictates the rules and structure of competition, and its teams must adapt. That differs from leagues such as the NFL or NBA, in which team owners collectively determine the rules and policies, which the league office then administers and enforces.
The plaintiffs claim NASCAR maintains monopsony control over top stock-car racing teams by engaging in exclusionary and anticompetitive practices, such as imposing contractual restrictions on race teams and track owners that stifle competition and suppress their growth and earning potential. (In a monopsony, a single buyer controls the prices and terms within a market.) The plaintiff’s complaint also touches on NASCAR’s acquisition in recent years of top tracks and potential competitors; its use of noncompete terms that preclude teams from racing in outside events; and its 2022 introduction of the “Next Gen” car, which was touted as part of a cost-saving effort, though the plaintiffs claim it increases their costs and deepens their reliance on the company.
Going deeper
A key element of the dispute centers on charters: contracts that guarantee teams a starting position in and a split of prize money from Cup Series events if they agree to NASCAR’s terms and restrictions. The charter system was introduced in 2016 after a group of team executives coalesced to push for changes aimed at creating more value in their teams. NASCAR issues 36 charters for every 40-car Cup Series event, which leaves four open spots for nonchartered entries that qualify. Up to four charters are allowed per team, and teams can buy, sell or lease those charters—which is how 23XI Racing fielded its first Cup Series car in 2021 after buying one from now-defunct Germain Racing.
Front Row Motorsports and 23XI Racing have called NASCAR and the France family “monopolistic bullies” for exerting excessive control over teams. When the family gave those teams just a few hours to agree to a new charter agreement in September 2024, Front Row and 23XI refused, setting the stage for Monday’s trial.
Barak Orbach, a professor of business and law at the University of Arizona, said the plaintiffs’ case is “very sound.”
“There was one company that was potentially a competitor, and NASCAR acquired it,” Orbach said. “On top of that, it acquired the major [racetrack owner] in America. And on top of that, it entered into these agreements—the charter agreements—that basically block the teams from participating in rival championships. The lawsuit is basically challenging the legality of all of these arrangements that secure the positioning of NASCAR as the only game in town. … What NASCAR has done is they have basically secured monopoly power and started squeezing more value from their teams.”
What’s at stake?
Beyond the overt push for better contractual terms, Orbach and other antitrust experts believe the plaintiffs are angling for deeper structural changes in the way NASCAR operates.
NASCAR may defend its practices by arguing that those measures were necessary to create an efficient, competitive product. It can argue that it consolidated racetracks to better ensure their quality and safety for races or that its restrictions on teams are meant to maintain a high standard of quality. If NASCAR wins, 23XI Racing could cease operations.
Orbach said a win for the plaintiffs could lead to the end of NASCAR’s charter system and potentially more dramatic changes to the balance of power within the sport.
“I don’t think NASCAR as it is has a chance to survive after the trial,” Orbach said. “NASCAR will have to transform itself, and the most logical way to transform itself is to be somewhat similar to ordinary leagues like the NBA, where the teams have some equity in the league itself.”
Write a letter to the editor, share a story tip or update, or report an error.
