NASCAR, Michael Jordan Head to Court in Industry-Shaping Trial

A jury trial that could fundamentally reshape the business relationship between NASCAR and its teams—and that will feature Michael Jordan, NASCAR CEO Jim France and other major American sports figures—will begin next Monday in federal district court in Charlotte, N.C. This trial will happen unless a settlement is reached over the Thanksgiving holiday.

U.S. District Judge Kenneth D. Bell will preside over the trial, which is expected to last 10 days. The trial will tackle antitrust claims brought by 23XI Racing—co-owned by Jordan, Denny Hamlin and Curtis Polk—and Front Row Motorsports against NASCAR.

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The litigation that launched last year has been intense, with numerous filings and pretrial maneuvers. The parties have engaged in three rounds of preliminary injunction motions, one of which was reviewed by the U.S. Court of Appeals for the Fourth Circuit, regarding whether 23XI and Front Row could enjoy the benefits of charters without the drawbacks. While one motion for a preliminary injunction is ordinary before a trial, three is not. In addition, the sides have litigated NASCAR’s counterclaim against 23XI and Front Row over allegedly engineering an “illegal cartel,” and they’ve tried several attempts at mediation, none of which worked.

Both sides have also spared no expense on lawyers. The parties are represented by two of America’s top sports litigators: Winston & Strawn’s Jeffrey Kessler, who represents 23XI and Front Row, and Latham & Watkins’ Christopher Yates, who represents NASCAR.

Kessler is most known for advocating on behalf of college athletes in NCAA v. Alston, which concerned antitrust claims over education-related expenses for college athletes and culminated in a 9-0 victory for Kessler at the U.S. Supreme Court. Yates has likewise secured major wins in sports antitrust cases, including his defense of U.S. Soccer against a $500 million lawsuit brought by the North American Soccer League, which was represented by Kessler.

As 23XI and Front Row tell it, NASCAR has engaged in anti‑competitive practices to maintain monopsony control over the services of premier stock‑car racing teams. They also argue that NASCAR imposes contractual restrictions—including non-compete measures with track owners and racing teams—to impede competition. These types of restrictions allegedly suppress team earnings and erect barriers to entry for any rival to the Cup Series.

Much of the dispute centers on charters, the multiyear contracts between NASCAR and teams. Charters guarantee a starting position in NASCAR‑sanctioned races but include non‑compete language and mutual releases of claims. 23XI and Front Row argue charters give NASCAR excessive control and financial leverage, and they declined to sign them, reasoning they undermine the freedom to engage in business ordinarily enjoyed by owners.

NASCAR tells a very different story. The association insists it has become an industry leader on account of merit and sound judgment, including through smart decisions and business acumen. Stated differently, even if NASCAR is dominant, NASCAR argues it achieved that status through merit and the association should not be faulted for success.

NASCAR also points out that it allows teams to race in other stock car series and that some NASCAR Cup Series teams compete elsewhere. For instance, Team Penske competes in NASCAR and IndyCar and Rick Hendrick, who owns NASCAR team Hendrick Motorsports, entered a car in the Indy 500 last year as one of the owners, with Kyle Larson—one of NASCAR’s biggest stars—as the driver.

As detailed in its briefs filed over the last year, NASCAR will focus its defense on the depiction of its business as enhancing the sport and benefiting fans, sponsors and teams. One key metric that could corroborate NASCAR’s defense is the rise in the value of charters. Some charters have appreciated by tens of millions of dollars—roughly tenfold in recent years. To illustrate, the sale of a charter for $45 million has been at issue in litigation involving Rick Ware and Legacy Motor Club. NASCAR will maintain these data points undermine 23XI and Front Row’s underlying theory, since at least some teams are thriving financially in the current system.

NASCAR will also frame the system sought by 23XI and Front Row as an attempt to shoehorn NASCAR into a league akin to the NBA, with franchise-style ownership. The two teams depict the existing system as inadequate, arguing that longer‑term or permanent charters would be more beneficial. When Jordan owned the Charlotte Hornets, the franchise belonged to him, and he didn’t need to renegotiate ownership terms every few years. But the ability to sell charters, NASCAR has pointed out, arguably offers a more dynamic marketplace. That setup made it possible for Jordan’s 23XI to enter the sport in the early 2020s.

To reinforce that NASCAR isn’t analogous to the NBA, the association could lean on Hendrick, Joe Gibbs and other team owners to testify in support of the current system and warn NASCAR shouldn’t be reshaped into a more traditional professional‑league structure. They may highlight the sport’s growth and the increased value charters have created for owners and team members.

Of course, 23XI and Front Row will anticipate that line of testimony. They will likely argue these owners are understating the economic constraints charters impose. 23XI and Front Row might also rely on testimony by their drivers, including Bubba Wallace and Tyler Reddick, about charter-related challenges and their negative impact on careers.

NASCAR will also contend that exclusivity and non-compete aspects of charters reflect standard—and lawful—business practices American pro sports. They ensure that teams and athletes are loyal to a league, which helps the league market its product to fans and broadcasters.

Much of the testimony will involve economic arguments, data analysis and expert reflections. Antitrust is one of the most complicated areas of law, and antitrust trials can sometimes seem convoluted, esoteric and dry. The challenge for Kessler, Yates and colleagues will be to ensure jurors aren’t lost in detail and abstraction. This point was vividly illustrated last year when a federal judge vacated a multibillion-dollar jury verdict against the NFL in the Sunday Ticket antitrust litigation. The main reason: Jurors were confused by expert testimony and misled by hypotheticals.

Other parts of the NASCAR trial will seem more accessible. When Jordan testifies, he will be instantly familiar to jurors, which could make his testimony especially impactful. That is also true when he faces cross-examination and is forced to answer difficult questions, including about potential drawbacks to the trial outcome he seeks.

The trial also won’t be the last word. Whichever side loses can, and almost certainly will, appeal to the U.S. Court of Appeals for the Fourth Circuit. The Fourth Circuit might not have the last word either, as the losing party could then petition the U.S. Supreme Court. It’s not beyond the realm of possibility this sports antitrust dispute, like so many others in recent years, lasts several years.

No matter how 23XI & Front Row v. NASCAR ends, the ending will be felt on racetracks for a long time.

Penske Motorsports is owned by Roger Penske and is not associated with Penske Media Corporation, the parent company of Sportico.

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