Michael Jordan’s 23XI, NASCAR have first preliminary hearing regarding antitrust lawsuit

CHARLOTTE, N.C. — 23XI Racing co-owners Michael Jordan and Denny Hamlin started off NASCAR championship week by facing the sanctioning body in federal court.

23XI, which along with Front Row Motorsports is suing NASCAR and its CEO Jim France for antitrust violations, had its first in-person courtroom showdown with NASCAR during a Monday hearing over a preliminary injunction request.

On the fifth floor of the federal courthouse in Charlotte, the teams’ attorney, Jeffrey Kessler, sparred with NASCAR attorney Chris Yates in a spirited, sometimes contentious hearing. At stake is a clause in NASCAR’s 2025 charter agreement with teams that does not permit them to bring legal action; 23XI and FRM asked Judge Frank Whitney to waive that clause and allow them to sign the agreements so they can continue racing, either as charter teams or non-charter “open” teams.

“We literally cannot practice our profession at all without signing this release,” Kessler said.

23XI Racing co-owners Michael Jordan, Denny Hamlin and Curtis Polk, and Front Row Motorsports’ Bob Jenkins and Jerry Freeze walk into a federal courthouse for today’s injunction hearing. pic.twitter.com/hXNJaecFFW

— Jordan Bianchi (@Jordan_Bianchi) November 4, 2024

The teams hope Whitney will both waive the clause and reinstate the original charter offer NASCAR had on the table Sept. 6, when 13 owners signed it. The DocuSign originally had a deadline of Nov. 5, Kessler said, but NASCAR has now withdrawn it.

Yates said NASCAR no longer wants to enter into a charter agreement with the teams after they have disparaged NASCAR publicly.

“They have been calling NASCAR a series of names that undermine NASCAR’s brand and goodwill,” Yates said. “NASCAR only wants to enter into charter agreements with teams who want to work collectively to grow the sport.”

Yates added the teams have made a “frontal assault on the charter system” and argued NASCAR is not a monopoly for several reasons, including the availability of 128 other tracks on which stock cars could race in the United States aside from the 26 Cup Series venues.

He also said the owners could choose to do something else with their business aside from running a NASCAR team, such as “buying another NBA team,” a nod to Jordan’s former ownership of the Charlotte Hornets. But Kessler said the suggestion 23XI and FRM could suddenly change their business model, even to another racing series, would be like asking a football player to become a baseball player.

Jordan spent much of Yates’ arguments leaning forward intently from his seat in the front row of the courtroom, sometimes with a smirk and other times holding his chin.

Michael Jordan after the hearing: pic.twitter.com/2L4MQFmsxj

— Jeff Gluck (@jeff_gluck) November 4, 2024

Yates said under the 2025 charter agreement, race teams will receive approximately half of all TV revenues and said the worst-performing charter team would get a 50 percent increase in payouts from the current agreement.

He said NASCAR was contractually obligated to inform teams of the purse money for next season by Nov. 1, which is why NASCAR has reduced the number to 32 charters with no plans to re-offer 23XI and FRM their existing four combined charters. Charters offer guaranteed entry into each Cup Series race, along with a higher share of the race winnings. Yates claimed the teams were asking the judge to force NASCAR into a seven-to-14-year agreement by rewriting the contract “on their preferred terms.”

“They’re trying to force NASCAR into an unwanted charter relationship,” he said.

Kessler denied that and said the teams only wanted the judge to waive the clause for the length of this case, adding: “Hopefully it doesn’t take 14 years.”

Yates also said the teams’ contention that many owners were coerced into signing the new agreement on Sept. 6 was false, because team owners like Roger Penske, Rick Hendrick and Pro Football Hall of Fame coach Joe Gibbs are not the type of people who get pushed around. He also quoted Hendrick and owner Justin Marks as saying they were pleased with the terms of the new charter agreement.

At one point, Kessler loudly said Yates was “manufacturing facts” and “misrepresenting” the teams’ case to mislead the judge. Kessler rephrased the terms of what the teams were asking for “so even (Yates) can understand it.”

Responded Yates: “We disagree on pretty much everything he’s argued.”

Kessler also revealed 23XI’s driver contract with Tyler Reddick would allow the driver to leave as a free agent if 23XI did not have a charter for him, along with the team’s sponsors.

Reddick is one of four drivers competing for the NASCAR Cup Series championship on Sunday at Phoenix Raceway. Prior to the hearing, Whitney told those in the room he hadn’t seen his courtroom so full “in several years” and added, “I feel like I have two full law firms in front of me, too.”

Whitney initially appeared skeptical of Kessler’s claims while being more open to Yates’ arguments, but the rebuttals from Kessler left the two sides on even ground.

The judge praised both attorneys for their “extraordinary” and “very excellent arguments” and said he would give a written decision by Friday.

Both sides appeared pleased afterward. Though NASCAR did not comment, France turned around and winked at senior advisor Mike Helton in the row behind him.

And Jordan, addressing reporters outside the courtroom, said Kessler “did an unbelievable job today.”

“I put all my cards on the table,” Jordan said. “I think we did a good job of that. But I’m looking forward to winning the championship this weekend.”

Required reading

(Photo: Sean Gardner / Getty Images)