In a significant move, Michael Jordan’s 23XI Racing, alongside Front Row Motorsports, has filed an antitrust lawsuit against NASCAR and its CEO, Jim France. The legal action claims NASCAR has been engaging in anticompetitive behavior that stifles fair competition and prevents racing teams from operating profitably. The lawsuit centers on NASCAR’s monopolistic control over key aspects of the sport, including racetrack ownership and supplier selection, which the teams argue limits their ability to grow and thrive.
“Together, we brought this antitrust case so that racing can thrive and become a more competitive and fair sport in ways that will benefit teams, drivers, sponsors, and, most importantly, fans,” the two racing teams said in a joint statement announcing the lawsuit.
23XI Racing, founded by NBA icon Michael Jordan, driver Denny Hamlin, and business partner Curtis Polk in 2020, has quickly established itself in NASCAR. Meanwhile, Front Row Motorsports, owned by Bob Jenkins, has been competing in NASCAR for nearly two decades. Both teams contend that NASCAR’s business practices are unfairly benefiting the organization at the expense of the sport’s growth and the financial well-being of its participants.
The lawsuit outlines several key grievances, chief among them NASCAR’s control over premier racetracks, which limits the teams’ access to compete elsewhere, and its policy of requiring teams to purchase parts from specific suppliers. This, the teams claim, creates a scenario where profitability becomes nearly impossible. The legal action highlights the significant financial strain this has placed on teams, with some, like Front Row Motorsports, struggling to turn a profit despite years of involvement in the sport.
Bob Jenkins, the owner of Front Row Motorsports, expressed his frustration, stating, “We need a more competitive and fair system where teams, drivers, and sponsors can be rewarded for our collective investment by building long-term enterprise value, just like every other successful professional sports league.”
The lawsuit comes at a time when NASCAR has been benefiting from a massive media rights deal. Last November, the company signed a seven-year agreement with major networks like Fox, NBC, and streaming services such as Amazon, valued at $7.7 billion. The lawsuit contrasts this financial windfall with the challenges faced by teams, many of which are struggling to stay afloat.
What sets NASCAR apart from other professional sports leagues is its ownership model. Unlike leagues such as the NFL or NBA, where teams have significant say in the operations, NASCAR is privately owned and controlled by the France family. The lawsuit criticizes this structure, calling it a monopoly that has gone unchecked for too long. “No other major professional sport in North America is run by a single family that enriches themselves through these kinds of unchecked monopolistic practices,” the lawsuit asserts.
The financial challenges facing NASCAR teams are further underscored by the lawsuit’s claim that many original charter owners have exited the sport due to financial difficulties. The filing notes that out of the 19 teams initially granted charters in 2016, only eight remain active today. Even well-established teams like Hendrick Motorsports, led by NASCAR legend Jeff Gordon, have reportedly struggled to achieve profitability in recent years, despite their considerable success on the track.
Michael Jordan, the first Black majority owner of a full-time NASCAR team, has been vocal about the need for change in the sport. “Today’s action shows I’m willing to fight for a competitive market where everyone wins,” Jordan said in a statement. “Everyone knows that I have always been a fierce competitor, and that will to win is what drives me and the entire 23XI team each and every week out on the track. 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.”
Jordan’s racing team has already seen success this year, winning its first regular-season championship in just its fourth year. However, the lawsuit points out that success on the track does not necessarily translate to financial stability for racing teams under NASCAR’s current business model.
The teams have enlisted the help of renowned sports attorney Jeffrey Kessler, co-executive chairman of Winston & Strawn, to lead their legal challenge. Kessler has a history of representing high-profile clients in antitrust cases and is expected to file a preliminary injunction to ensure that 23XI Racing and Front Row Motorsports can continue competing in the upcoming season while the lawsuit moves forward.
As of yet, NASCAR has not issued a formal response to the lawsuit. The legal proceedings are expected to draw significant attention within the racing community and could have far-reaching implications for the future of NASCAR and its relationship with the teams, drivers, and sponsors that make the sport possible.
