This update expands on the initial complaint outlined in the Sports Litigation Alert article “Analyzing Michael Jordan’s 23XI Racing Antitrust Lawsuit Against NASCAR,” published on December 13, 2024, by Gigi Wood.[1]
Founded by NBA legend Michael Jordan, NASCAR driver Denny Hamlin, and their business partner Curtis Polk, 23XI Racing (“23XI”) filed an amended complaint against NASCAR in February.[2] 23XI debuted in the 2021 NASCAR Cup Series with driver Bubba Wallace (No. 23), marking a historic win at Talladega where he became only the second-ever Black driver to win a NASCAR Cup Series race. The team later expanded, adding a second car, which is currently driven by Tyler Reddick (No. 45). Front Row Motorsports (“FRM”), the other plaintiff in this case, is a Tennessee-based team owned by Bob Jenkins, and fields Michael McDowell (No. 34) and Todd Gilliland (No. 38) in the Cup Series.
This case concerns NASCAR’s alleged monopolistic practices, primarily its control over the Charter system, which guarantees entry for select teams into prestigious NASCAR events. Plaintiffs claim that NASCAR’s actions stifle market competition. In a significant twist, NASCAR has countersued the two Plaintiff racing teams, accusing them of orchestrating anti-competitive conduct to force more favorable contract terms.
Amended Complaint
The amended complaint expands the initial allegations, claiming that NASCAR, under the control of the France family, has unlawfully monopolized the premier stock car racing market.
23XI and FRM allege that NASCAR’s Charter system restricts competition by providing select teams with guaranteed entry into races, thus allowing them to dominate the market and stifle opportunities for other teams.
Plaintiffs argue that this lack of competition results in unjust financial arrangements that prevent teams from negotiating better terms. This, in turn, limits their ability to reinvest in their businesses and maintain a competitive edge. The complaint frames NASCAR’s actions and the France family as “monopolistic bullies,” suppressing teams that dare to challenge the established system.[3]
Plaintiffs argue that NASCAR leveraged its dominance to force racing teams into a restrictive 2025 Charter Agreement, since they had no other viable option for competing in premier stock car racing in the U.S. Plaintiffs stated that teams, unwilling to reveal their identities for fear of retaliation from NASCAR, alleged they felt “coerced” and “under duress,” with NASCAR’s tactics being as extreme as “putting a gun to their heads.” One team even compared NASCAR’s actions to a “communist regime.”[4]
The 2025 Charter Agreement also expands the non-compete clause, barring teams from racing in any series not sanctioned by NASCAR. It includes a mandatory anticompetitive release provision, requiring teams to waive legal claims against NASCAR. [5] Plaintiffs are the only two teams that refused to sign. Now, they are seeking a preliminary injunction to operate under the 2025 Charter without waiving antitrust claims, permanent injunctive relief to end NASCAR’s exclusionary practices, and trebled monetary damages for harm caused by the 2016 and 2025 Charter Agreements.
NASCAR’s Counterclaims
In response to the lawsuit, NASCAR filed a counterclaim accusing 23XI and FRM of engaging in a “per se illegal cartel” under Section 1 of the Sherman Act.[6] NASCAR asserts that these teams have colluded to coerce and extort the organization into renegotiating the Charter agreements by leveraging collective bargaining tactics to demand better contract terms.
NASCAR criticized Plaintiffs for acting in bad faith, pointing out that they were backed by Jeffrey Kessler, Esq., a lawyer with a history of suing sports leagues.[7] NASCAR argued that this was not the first-time Plaintiffs had tried to push their own agenda on the broader racing community. NASCAR contends it is particularly ironic that, in their effort to dismantle the Charter system, 23XI and FRM have sought to manipulate antitrust laws for their own benefit. NASCAR’s language describes Plaintiffs as “trying to blow up the Charter system” and attempting to “weaponize the antitrust laws” to achieve their goals.[8] NASCAR stressed that it is an “undisputed reality” that Plaintiffs, led by Polk, intentionally violated antitrust laws by coordinating anticompetitive actions.[9]
Attorney Jeffrey Kessler, representing Plaintiffs, called NASCAR’s counterclaim a “meritless distraction” designed to deflect from NASCAR’s monopolistic conduct.[10] NASCAR attorney Chris Yates warned that if Plaintiffs prevail, the Charter system could be dismantled. Yates further accused the Race Team Alliance (“RTA”) of operating like a “cartel” during the Charter negotiations.[11] RTA is an organization formed by a group of NASCAR teams to collectively address and negotiate issues related to the sport.[12] A subgroup of the RTA, the Team Negotiation Committee, led by Curtis Polk and others, conducted the preliminary Charter negotiations.
23XI and Polk are accused of leading a collusive effort to pressure NASCAR into agreeing to more favorable financial terms for teams, using threats like boycotts of NASCAR events, negative media campaigns, and coordinating group actions to manipulate NASCAR’s media rights negotiations.[13] Instead of relying on competition among teams for sponsorships, Polk pushed for increased revenue from NASCAR’s media rights. He actively participated in negotiations on behalf of the RTA. This anti-competitive strategy allegedly had a negative impact on the negotiations.
The Charter’s exclusivity provisions, which have benefited both parties for over nine years, may be at risk if the court agrees with Plaintiffs’ claims. The NASCAR Charter system provides significant benefits, including guaranteed entry into every Cup Series race.[14] The Charter also guarantees millions of dollars in payments to teams, even if they do not win races, through various funding sources such as the Race Purse, Year-End Point Fund, Historical Owner’s Plan, and Fixed Owner’s Plan. It allocates 25% of media rights revenue to teams, increasing to 40% by 2024, and reserves 36 of 40 race spots for Charter teams, thus reducing competition and making it harder for non-Charter teams to qualify.
As a result, the Charter has become an extremely valuable asset for team owners. NASCAR issued the original Charter for free, but the value has increased significantly. For instance, Spire Motorsports publicly purchased a Charter for $40 million. Taking away the Charter also removes the “goodwill provision prohibiting a Charter holder from competing in a stock car racing product that would be dilutive to the NASCAR Cup Series.”[15] NASCAR does not want the Charter eliminated or their exclusivities removed.
The Preliminary Injunction and Appeal
Back in December 2024, U.S. District Judge Kenneth D. Bell granted a limited preliminary injunction allowing 23XI and FRM to compete as chartered teams in Cup Series races without being subjected to the anti-competitive release provision. The court justified this to maintain the status quo and found Plaintiffs likely to succeed on their Section 2 claim.[16] Yet, the litigation has taken another turn as NASCAR has appealed.[17]
NASCAR contends that the district court misapplied federal antitrust law, arguing that Plaintiffs’ harm is merely dissatisfaction with NASCAR’s terms, which does not constitute an antitrust injury.[18] NASCAR argues that the district court “conjured from thin air a categorical ban” on release clauses covering antitrust claims, a decision without precedent in other appellate courts.[19] NASCAR also argues that the injunction disrupts the status quo – it does not preserve it – by forcing it to offer the benefits of a contract that was rejected by the Plaintiffs and later withdrawn by NASCAR.
The appeal asserts that the injunction interferes with NASCAR’s ability to freely negotiate with other teams and has impacted preparations for the 2025 Cup Series season. NASCAR’s defense notes that the Charter system was voluntarily established at the request of the teams in 2014.[20] NASCAR’s decision to withdraw its offers after 23XI and FRM rejected the 2025 terms is not an anti-competitive act. Instead, NASCAR maintains it was acting within its rights as a private entity to withdraw offers when terms were not accepted.[21]
However, the district court has now compelled NASCAR to do business with Plaintiffs under terms they are actively contesting as anti-competitive in the litigation. Plaintiffs’ complaint challenges several Charter provisions beyond the release clause, including restrictions on teams competing in other leagues and NASCAR’s use of Charter teams’ intellectual property rights. Despite this, Plaintiffs have received preliminary injunctive relief that binds them to those very provisions.[22]
With the trial scheduled for December 1, 2025 and the appeal set for oral arguments on May 9, 2025, the ongoing legal battle over NASCAR’s Charter system promises to complicate matters further, with both sides contending that their positions will ultimately reshape the sport’s competitive landscape.
Katelyn Kohler is a third-year law student at Suffolk University in Boston, specializing in Sports & Entertainment, Intellectual Property, and Labor & Employment Law. She holds dual degrees from Ithaca College in Business Administration: Sports Management and Legal Studies.
[1] See Gigi Wood, Analyzing Michael Jordan’s 23XI Racing Antitrust Lawsuit Against NASCAR, sports litigation alert (Dec. 13, 2024), https://sportslitigationalert.com/analyzing-michael-jordans-23xi-racing-antitrust-lawsuit-against-nascar/.
[2] See Amended Complaint, 2311 Racing LLC d/b/a 23XI Racing v. National Ass’n for Stock Car Auto Racing, LLC, No. 3:24-cv-886-KDB-SCR, at 1 (W.D.N.C. Feb. 3, 2025), ECF No. 107.
[3] See id. at 10 (“The France family and NASCAR are monopolistic bullies. And bullies will continue to impose their will to hurt others until their targets stand up and refuse to be victims. That moment has now arrived.”).
[4] See id. at 8-9 (quoting teams who allege coercion from NASCAR).
[5] See id. at 9 (describing NASCAR’s monopsony power outlined in 2025 Charter).
[6] See NASCAR’s Counterclaims Against 2311 Racing LLC d/b/a 23XI Racing, Front Row Motorsports, Inc., and Curtis Polk, & Defs.’ Answer to Am. Compl. and Defenses,NASCAR Event Management, LLC v. 2311 Racing LLC d/b/a 23XI Racing, No. 3:24-cv-886-KDB-SCR, at 25 (W.D.N.C. Mar. 5, 2025) (“Counterclaim Defendants engaged in active threats and coercive behavior in order to maintain their per se illegal cartel.”).
[7] See id. at 4 (“Aided by counsel who has a history of suing various sports leagues and claiming that they engage in anticompetitive conduct…”).
[8] See id. at 4-5.
[9] See id. at 5.
[10] See Jordan Bianchi & Jeff Gluck, NASCAR Sues Michael Jordan’s Team, Front Row Motorsports, Calls Them “An Illegal Cartel”, The Athletic, Mar. 5, 2025, updated Mar. 6, 2025, https://www.nytimes.com/athletic/6177331/2025/03/05/nascar-michael-jordan-lawsuit-illegal-scheme/?redirected=1.
[11] See id. (quoting both opposing attorneys’ views on the conflict).
[12] See Race Team Alliance, https://www.raceteamalliance.com (last visited Mar. 11, 2025).
[13] See NASCAR’s Counterclaims, supra note 6, at 5 (asserting allegations against Polk).
[14] See id. at 13-15 (describing origins and benefits of Charter System).
[15] See id. supra note 6, at 5.
[16] See Opening Br. of Appellants Nat’l Ass’n for Stock Car Auto Racing, LLC & James France,2311 Racing LLC v. Nat’l Ass’n for Stock Car Auto Racing, LLC, No. 24-2245, 2025 WL 02/12/2025, at 22 (4th Cir. Feb. 12, 2025) (describing procedural posture of appeal).
[17] See id. at 2.
[18] See id. at 52.
[19] See id. at 3-4.
[20] See id. at 10; see also id. at 39 (arguing Michael Jordan voluntarily chose to invest in two NASCAR Charters and so “[h]is alleged ‘lock in’ results from his own voluntary choices, not from NASCAR’s monopsony power.”).
[21] See id. at 32 (asserting plaintiffs rejected the 2025 Charter before NASCAR withdrew its offers, creating no contract, and are now unfairly reaping benefits from a Charter whose terms expired in 2024).
[22] See Opening Br. of Appellants, supra note 16,at 5.
