23XI Racing and Front Row Motorsports file lawsuit against Nascar

• Teams allege the series prevents fair competition in the sport
• Suit claims it costs US$18m to run a car for a Cup Series season

23XI Racing and Front Row Motorsports (FRM) have filed a lawsuit against Nascar and chief executive Jim France.

The antitrust filing argues that the stock car racing series has ‘used anti-competitive practices to prevent fair competition in the sport’.

Last month, after more than two years of negotiations, Nascar finally got its teams to agree to the charter proposal for 2025, but 23XI Racing and FRM refused to sign the contract.

Charters were introduced in the series in 2016, and a team must own one to guarantee entry to every race and, therefore, a portion of the purse.

In a joint statement, 23XI Racing and FRM said: “We share a passion for racing, the thrill of competition, and winning. Off the racetrack, we share a belief that change is necessary for the sport we love.

“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 teams allege that Nascar and the France family ‘operate without transparency’ and that their level of control unfairly benefits them.

The two teams point to the fact that Nascar and the France family own the majority of the racetracks on the Nascar schedule, the exclusivity deals imposed on Nascar-sanctioned racetracks, and the acquisition of the Automobile Racing Club of America (ARCA), the series’ only major stock car competitor.

23XI Racing and FRM also have complaints that Nascar teams are unable to compete in any other stock car racing series and that the teams are forced to buy parts from single-source suppliers chosen by Nascar.

The suit claims that it costs US$18 million per season to run a car in the Nascar Cup Series and that teams are struggling to make reasonable profits in the current climate.

In short, the teams believe that ‘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 preliminary injunction will enable both 23XI Racing and FRM to compete next season under the 2025 charter agreement while still pursuing their antitrust litigation. The teams are seeking treble damages under this lawsuit.

Denny Hamlin, part-owner of 23XI Racing, said: “It’s actually pretty simple in my opinion. When I look around, I see that the best and most competitive sports in the world understand that when teams thrive, fans benefit, and that everyone who invests in making the sport a success should share fairly in that success. With the right changes, we can certainly make that a reality in racing.”

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• Will a new charter agreement pave the way for more private equity investment in Nascar?

BlackBook says…

This is a significant development in the long-running charter agreement stalemate, as discontent now bubbles over into civil war.

While the France family will be able to exert considerable power and influence in this process, 23XI Racing can rely on the backing of National Basketball Association (NBA) icon Michael Jordan.

Co-owner of the team, Jordan’s legendary status in US sporting history means that Nascar has to take this seriously. The weight his word holds with the American public is also not good news for the series ahead of the first year of its bumper US$7.7 billion TV deal across four broadcasters.

Whatever happens, the sporting landscape in Nascar could be set to irrevocably change.