Michael Jordan Owned Cup Series One Of Two To Federal File Antitrust Suit Against NASCAR
The owners of the NASCAR Cup Series teams 23XI Racing and Front Row Motorsports filed a federal antitrust lawsuit against NASCAR and its chairman Jim France on Wednesday.
The suit claims NASCAR’s charter system unfairly limits competition.
The team’s filed the suit after two years of negotiations between the sanctioning body and the 15 racing teams that hold charters in the NASCAR Cup Series.
“The France family and NASCAR are monopolistic bullies,” read a portion of the filing obtained by the Associthe teams said in the lawsuit, a copy of which was obtained by The Associated Press. “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.”
The charter system is a revenue sharing model between NASCAR its charter holding Cup Series teams. In early September 13 of the 15 teams signed the new charter agreement.
23XI, which is co-owned by Michael Jordan and veteran racer Denny Hamlin, was one of the two teams that did not sign the new agreement. Front Row Motorsports also did not sign the new agreement. The two teams hired well known antitrust attorney Jeffery Kessler.
For more on this story: Michael Jordan’s 23XI and a 2nd team sue NASCAR over revenue sharing model
If I can be like Mike, go get an Air Jordan NASCAR is full of a bunch of Greedy hypocrites. It was so nice to see that Stafford dropped them from their track. Let’s go back to old school. racing like the old days, no stages,no playoffs straight up racing for a full season, with real stock cars not this crap they’re driving today.
This is a raise at the poker table by 23XI and Front Row. The farther this goes without agreement the more the discovery process will unearth about the finances of NASCAR. That applies to 23XI and FR as well, but with so many teams and the movement of management personnel between the teams, unearthing the financial profiles of the top teams will yield few big surprises.
“The farther this goes without agreement the more the discovery process will unearth about the finances of NASCAR. ”
My view for the secretive, closed corporation NASCAR has been for so long that one observation goes to the heart of the most important element of this litigation.
Attorney for the plaintiff’s:
“Kessler has been involved in several landmark antitrust cases, including the creation of NFL free agency, the implementation of NIL deals in college athletics and winning equal pay for the U.S. women’s national soccer team.”
You can bet that got the attention of those in the executive suits at NASCAR.
So, i always wondered about those charters.
In the old days, i get it, guarantee your car gets in the race, for your points, your sponsors. But that was in the old days, when they used to send people home. Now for most races, they cant even get the full field. Everyone makes it in. If I’m an owner, I’m thinking, whats my benefit for paying for this? I understand why the owners are crying foul.
I’m sure this litigation will take a while, but this will be interesting to see how “Goliath” fares in this one.
Bobf,
There’s a lot more that goes into the benefits of having a charter than just guaranteeing a spot in the race. Most notably, it’s the value of the charter and what that means to the team owner. It gives their team an actual worth. In the old days when a team owner decided to retire or leave the sport, “the team” itself really had little to no value. Realistically, most used racing equipment was worth pennies on the dollar. So maybe you made some scratch if you owned your shop and sold that real estate, but realistically a team had almost no value. The charter puts a price tag on the value of owning a team. Having the ability to sell the charter puts a value price tag on your team’s worth.
I see your point Shawn. But the that leads me to think, does a successful team in the sport(aka gibbs, Penske, hendrick, ) really care about that? Payback break even point not worth it for the top tier teams? I’m thinking charter value based on a team sale, would be more of a selling point to mid pack, or bottom teams then, if thats the case. And maybe thats why 23xi and front row, have not signed. And now that the ice is broken, you can bet your bottom dollar (sorry as thats what this is about) that all the other teams are dying to see where this goes. At any point, good stuff Shawn, will be interesting for sure for anyone who follows cup.
Fun facts (Facts not guaranteed but for the most part near accurate)
Of the 36 races scheduled in 2024, 19 are on tracks owned by NASCAR including the first and the last race of the season.
The lone chassis builder licensed by NASCAR, an important revenue stream for NASCAR is Technique Inc.
There are only four engine builders for Cup cars. Hendrick Motorsports and Earnhardt-Childress for Chevy, RFK (all Ford teams) and Toyota Racing Development (all Toyota teams). That’s 13 wins in 30 races for three of the teams that build engines one third of which going to Hendrick.
TV Deals-draw your own conclusions
NASCAR-7-year, $7.7 billion dollar media deal with Fox, NBC, Amazon, and TNT.
NFL: ESPN/ABC’s contract for Monday Night Football is worth around $2.7 billion annually. That’s just Monday Night Football.
SEC (College Sports)-The new contract is worth $3 billion over 10 years, according to the New York Times, meaning the SEC will get an annual payment of $300 million
A few stats, what do you think?
These are all through 30 races. NASCAR highlight drivers, for the purpose of this chat I’m focusing on teams.
Take a look.
Rick Hendrick – 12229 Team points— 4 teams all in the top 7 —-Ave points per full time team 3057—- 10 wins
Joe Gibbs racing – 10343 Team points—- 4 teams, —– average points per full time team 2586—— 6 wins
Team Penske -9127 Team points —-.3 full time teams—- average points per full time team 3042—5 wins,
Trackhouse – 3836 Team points —–2 full time teams, —average points per full time team 1918 —— 2 wins
23xi – 3792 Team points —–2 full time teams— average points per full time team 1896—–2 wins
RFK -2849 Team points —–2 full time teams—- average points per full time team 1424—–2 wins
Richard Childress Racing -1107 Team points —-.2 full time teams—-average points per full time team 554 —-1 win
Total Points Accumulated by the 36 Full Time Teams……..55235
Total Points Accumulated by the 3 top owners teams………31699
Percent of Total Points Accumulated by the Top 3 Owners….56%
Percent of Wins Accumulated by the Top 3 Team Owners……70%
Percent of Wins Accumulated by the Top 6 Team Owners…..90%
Rick Hendrick;
“Not everybody was happy,” he said. “But in any negotiation, you’re not going to get everything you want. And so I felt it was a fair deal and we protected the charters, which was No. 1. We got the (revenue) increase. I feel a lot of things we didn’t like we got taken out. So I’m happy with where we were.”
Draw your own conclusions from my previous post and this, mine are as follows.
The whole idea about the next generation car being manufactured by one company making racing more equitable has not worked at all. The rich are still rich and the rest get the scraps.
NASCAR has a plantation mentality. The organization the governing body, a a few long time team owners the biggest plantations owners with the most acres planted, the rest making the most of the few acres they are being allowed to keep.
Of course Hendrick is going to want to close a deal as fast as possible. He’s got the engine sales, they win the most and gobble up the most money he clearly is making a profit no matter what the deal is.
NASCAR promotes driver competition but with a few teams mostly fighting amount themselves. Is that the best model going forward and is it even possible to keep the plantation system they have indefinitely?
I’m no lawyer but my guess is it didn’t take this hot shot lawyer the plaintiffs hired a whole lot of convincing to take their case. NASCAR is completely out of step with pretty much every major sport that has decided or been forced to have systems that reward those putting on the show more equitably. The teams further down the food chain that race full time need to get a bigger, more equitable share of the pot.
My thanks to both Shawn and Doug. It’s why I love this site.
Seems my view of the nascar charter system was clearly uninformed. A lot to this. I had always considered the charters just another money grab by Nascar.
So, I’m interested to see how this ends up, and learn more from the arguments from both sides. Nascar usually digs in though. We’ll see how much resolve the teams doing the suit have, or, whether this gets resolved quietly, with the “terms of the agreement undisclosed”. May take a while though.
Doug, if money was such a concern, the teams should have agreed to the cost cap NASCAR tried to come up with.
This is about more than money. It’s about control. Teams, specifically 23xi, want more control in the direction of the sport. They want the inmates to run the asylum. We all know how that went with the IndyCar split.
32 out of 36 teams agreed to this deal. It’s not that bad.
Zig,
You said: “32 out of 36 teams agreed to this deal. It’s not that bad.”
Here’s some excerpts from a recent Associated Press article on the lawsuit:
Rick Hendrick, the winningest owner in NASCAR history, has said he signed only because he was worn down by the negotiations.
One team described its signing as ‘coerced,’ and another said it was ‘under duress.’
A third team said, NASCAR ‘put a gun to our heads’ and we ‘had to sign.’ A fourth described NASCAR’s tactics as that of a ‘communist regime.’ None of these teams would permit their identities to be publicly revealed for fear of retribution from NASCAR.
That certainly doesn’t sound like anything that should be fairly described as a deal that was “Not that bad.”