CHARLOTTE, N.C. (AP) — Michael Jordan stood on the steps outside a federal courthouse and acknowledged he was willing to settle an antitrust suit against NASCAR. The judge hearing the case months ago admonished both sides to come to a resolution. The biggest names in NASCAR — Roger Penske, Rick Hendrick, Joe Gibbs and Richard Childress — have called for a settlement.
The likelihood of finding some sort of peace agreement seems slim, though. Just last week, the attorney representing the two teams suing NASCAR said he was looking forward to a December trial.
Advertisement
What the non-suing teams have realized is that the entire NASCAR ecosystem is at stake. The suit filed by Jordan-owned 23XI Racing and Front Row Motorsports has the potential to significantly impact every team. For the first time, they have gone on record calling for both a settlement and the protection of the charter system that is at the heart of NASCAR’s business model and the focal point of the court fight.
U.S. District Judge Kenneth Bell warned of the dangers of going to trial.
“Until the jury comes back and we start talking — and only if they find for the plaintiffs, and we start talking about equitable remedies — nobody knows what ’26 is going to look like,” Bell cautioned at the last hearing. “Sponsors don’t know, drivers don’t know, broadcasters don’t know. Because if plaintiffs prevail, NASCAR is going to look very different. And that’s a lot of uncertainty for everybody.
“If plaintiffs don’t prevail, everybody’s got certainty: You ain’t racing with a charter. Nothing about their business is going to change. But nobody knows that until sometime mid-December.”
Advertisement
The charter system
The charter system is NASCAR’s version of a franchise model. A charter guarantees owners spots in the field, a base amount of revenue each year, and according to NASCAR, has created more than $1.5 billion in equity value for its teams since 2016.
A year ago, 13 of the 15 teams re-signed when they believed two-plus years of negotiations would not lead to a better deal. 23XI, co-owned by Jordan and three-time Daytona 500 winner Denny Hamlin, and Front Row Motorsports, owned by entrepreneur Bob Jenkins, went to court instead.
For months, the other 13 teams have privately complained that the lawsuit is creating uncertainty over the future of NASCAR. One session before a mediator earlier this year was not productive, and NASCAR this week is expected to file a motion in hopes of having a judge other than Bell hear both sides and advise on a resolution.
Advertisement
The latest motions
NASCAR last Friday asked Bell for summary judgement in its favor and an Oct. 21 hearing is scheduled.
The filing in the U.S. District Court in Charlotte included statements from several NASCAR team owners and executives supporting the charter system and urging resolution.
Among the statements was one from Gibbs, who owns the team that Hamlin drives for and has a technical alliance with 23XI Racing. He made it clear he has told both sides he does not want to be a witness in court “and I think it’s important for this to be resolved before any real damage is done to the sport.”
Advertisement
The teams have always wanted the charters — which are currently being sold on the open market for roughly $45 million — to become permanent. They currently have expiration dates and are tied to NASCAR’s broadcast package.
“I have repeatedly expressed my strong desire for the charter system to become permanent in nature, and I continue to hold out hope that will one day be the case,” Gibbs wrote. “Doing so would, in my view, solidify the financial health and well-being of the Cup teams and the sport as a whole.”
Penske wrote he signed the deal “because I felt that NASCAR was not going to move any further on their document and it was time for our team to go forward.”
From Childress: “Without charters, the team ownership model is unsustainable.”
Advertisement
And from Hendrick: “Without this framework in place, I question the long-term viability of the teams. More than anything, I hope the matter is resolved in a way that does not put the sport at risk.”
What happens next?
Although Jordan said after the last hearing in August he was open to settlement, the attorney representing 23XI and Front Row indicated his clients are prepared to go to trial. Jeffrey Kessler said there is a willingness for settlement talks, but argued the owner declarations only support the antitrust case.
“My clients are not, and never have been, seeking to eliminate the charter system,” Kessler said. “They have supported charters because teams cannot survive without them. The declarations from team owners and executives acknowledge this same economic reality. … NASCAR’S new motion changes nothing and we look forward to presenting our case at trial on December 1.”
Advertisement
NASCAR has indicated there is a path toward resolution before trial, though it is unwilling to renegotiate the charter agreements. NASCAR has also not revealed what common ground it is willing to reach with 23XI and Front Row.
23XI and Front Row have said they remain committed to meaningful change — perhaps that is permanent charters, or maybe it is by forcing NASCAR, a private company owned by the Florida-based France family, to divest itself from controlling essentially every aspect of the nation’s top motorsports series.
But going to trial is a dangerous proposition. If the teams lose, 23XI and Front Row could simply cease to exist in NASCAR. 23XI has already told its employees they will be taken care of through the 2026 season. It isn’t financially viable for the organizations to compete without charters no matter how much money Jordan has.
For NASCAR, the stakes are so much higher for everyone from the France family to the 13 teams that aren’t suing. A loss could lead to a dramatic overhaul of NASCAR’s very structure, starting with the charter system teams say they want. Bell could order the France family to sell the series or the race tracks they own.
This lawsuit has already taken a toll on the industry and the time for resolution is dwindling.
___
AP auto racing: https://apnews.com/hub/auto-racing
Read the full article here
