Michael Jordan’s racing team files antitrust lawsuit against Nascar
Summary
23XI Racing is accusing the stock-car series of exploiting its power over teams to deny them a greater share of the sport’s revenue.
One of Nascar’s most high-profile teams has filed an antitrust lawsuit against the organization and its chief executive Jim France, seeking to upend the way the stock-car series operates amid a dispute over revenue-sharing.
The 23XI Racing team is co-owned by Michael Jordan, part-owned by the driver Denny Hamlin, and fields Bubba Wallace, the only Black driver in Nascar’s Cup Series. Their suit, filed Wednesday morning in federal court in North Carolina along with the Front Row Motorsports team, accuses Nascar of exploiting its power over teams.
“By blocking the formation or growth of any competing premier stock car racing series, Nascar has been able to force the teams to accept take-it-or-leave-it economic conditions in order to compete at the highest level of stock car racing in the United States," the suit argues.
Nascar didn’t immediately respond to a request for comment.
The teams are being represented by Jeffrey Kessler, the sports lawyer who helped bring free agency to the NFL and represented some of the plaintiffs whose antitrust claim against the NCAA has put the association on the brink of a deal that would end its century-old stance that college athletes are amateurs.
The suit says that the France family—who founded, run and own Nascar—have created an illegal monopsony position for themselves, where they are the dominant buyer of services in the market, making them able to gouge sellers.
They have done this, the suit alleges, through “acquisition of other racing circuits and racetracks, anticompetitive agreements that restrict the availability of racetracks that are suitable for premier stock car racing, monopoly rules regarding the exclusive use of specialized “Next Gen" cars, and non-compete restrictions that prevent premier stock car racing teams competing in the Cup Series from also participating in races outside of Nascar’s circuit."
The consequence, the teams say, is that they’re denied a fair share of the sport’s revenue, depressing drivers’ earnings and making some teams economically unfeasible to operate.
The suit says that teams started to try to band together to hammer out their next charter agreement with Nascar, but that Nascar stopped talking to the joint negotiating committee in March, and in September gave teams hours to individually agree to agreements or risk not being able to race in 2025, prompting most teams to sign.
Front Row Sports and 23XI Racing didn’t sign and want a preliminary injunction to allow them to race in 2025, as well as treble damages for the anticompetitive terms of their current agreement, which dates back to 2016.
The suit comes as the biggest and most powerful sports leagues in the country are under unprecedented scrutiny from U.S. antitrust enforcers. The Justice Department has eyed the NBA, NCAA, MLB, FIFA and U.S. Soccer, and was investigating the PGA Tour’s response to the upstart LIV Golf circuit before expanding its attention to any deal for LIV’s Saudi backers to buy a stake in the Tour.
