The two teams, 23XI Racing and Front Row Motorsports, have taken legal action against NASCAR by filing a lawsuit in the Western District of North Carolina. They are challenging the charter system that NASCAR has in place, which they claim limits competition and unfairly binds teams to the series, its tracks, and its suppliers. The charter system, similar to a franchise model in other professional sports, has terms and conditions that are contractually binding, with the latest extension running through 2031.
The two teams have sought a preliminary injunction from the court to allow them to compete next season under the charter system while their antitrust case is being litigated. They have hired top antitrust attorney Jeffrey Kessler to represent them in court. Kessler has stated that the teams are willing to sign the 2025 agreements if they are released from a clause that prohibits teams from suing NASCAR. This court order would enable them to compete with the charters while the legal battle continues.
Despite the potential loss of $45 million in revenue, Front Row Motorsports owner Bob Jenkins is confident in the lawsuit’s success and is willing to forego the financial benefits for the sake of challenging what they believe to be an unfair system. Both teams have expressed their commitment to competing in the Cup Series in 2025, with or without the charters.
The lawsuit includes communications between the teams and NASCAR President Steve Phelps, with Phelps defending the charter proposal as fair and equitable to the industry. However, the teams argue that NASCAR’s dominant control over racing stems from exclusionary acts and restrictive agreements that have hindered competition.
The legal battle between the two teams and NASCAR is ongoing, with a hearing scheduled for October 16 in federal court in Charlotte. The teams are seeking expedited discovery and a preliminary injunction to allow them to race next season while the antitrust case proceeds. The requested documents include information on NASCAR’s contracts with racetracks, acquisitions of ISC and ARCA, and charter agreement provisions that restrict teams from competing in non-NASCAR events.
Overall, the lawsuit highlights the complex relationship between NASCAR and its teams, shedding light on the challenges faced by independent organizations in a competitive racing environment. The outcome of this legal battle could have significant implications for the future of the sport and the level of competition within the Cup Series.
