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.”
And Doug, you made a massive error looking at your point distribution post. NASCAR reset all the playoff drivers points to 2000 + playoff points and add 1000 points each round they advance. When you are eliminated you are reset back to 2000+ points earned in the entire playoffs. That very much inflates a team like HMS who still has 4 cars in the top 12.
Points earned this year for the 4 HMS drivers are 962,961,887, and 832. After the 30th race.
After the 30th race in 2021, the last year of the old car, HMS has 1222, 986, 930 and 789.
The new car has very clearly evened up the competition better. Yes, the good teams are still good. but we are getting more winners a year than weve had in quite some time.
and yes, ive seen those quotes shawn.
Maybe you should post rick’s ENTIRE quote from that article instead of cherry-picking a couple of words.
“”I think we worked really hard for two years and it got down to, you’re not going to make everybody happy. And I think it got down to, I was just tired,” Hendrick said. “Not everybody was happy. 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 number one, 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.”
and he went on to say
“I mean, it’s like, we’ve had so many meetings about this thing. I feel like the majority of teams felt like we got as much as we could, and it was time to move on.”
Certainly sounds a lot of different tone when you read the whole thing, doesn’t it?
heres some justin marks quotes.
“As far as how I feel about it, look, and I’ve expressed this to NASCAR, there are things I like and don’t like about it, some things that would be different than I wanted it to be and there are going to be some challenges for both sides in trying to get the best deal for them as possible, obviously,” Marks said.
“And, there was some consensus in the group that this is where we were going to end up, where we were going to net up and we had to make some decisions. As you can imagine, a lot of intra-team talking as we approached Friday night and sort of anticipated where everyone was at. The general consensus was (that) we’re tired. We have fought as much as we can fight and we can live with this deal. We can sign it and go on down the road.
Was NASCAR heavy-handed. Sure. Probably.
Does NASCAR push that deadline when they don’t know theyve went far enough to get all those teams to sign….absolutely not.
How would you suggest the end of these negotiations have happened? They had to end at some point.
And i really doubt 23xi and FRM kept their feelings a secret among the other teams. I bet they pushed very hard to get these teams to sign up on the lawsuit. And no others took them up.
Zig,
I guess you can analyze the quotes and feelings all you want. I think the consensus was essentially NASCAR backed them into a corner and essentially forced them to give in. All that said, I’m going to guess whatever was signed by those teams will be a moot point once the settlement is reached at warp speed to make the antitrust lawsuit disappear.
“NASCAR backed them into a corner and essentially forced them to give in”
I mean, that’s kinda negotiation as a whole, isn’t it? The teams didn’t have much leverage. There’s been a line half a dozen people long looking to buy charters.
Every time there’s a stick and ball cba up that gets messy, i hear how the rich owners are doing things like waiting it out until all the players bills from their poor financial decisions start stacking up.
“the settlement is reached at warp speed to make the antitrust lawsuit disappear”
I’m not convinced NASCAR is going to back down here, either. it’s not their first rodeo in antitrust lawsuits. It’s certainly not a surprise to them.
And I’m really not sure the other owners will back the lawsuit if they are legit trying to take a torpedo to the whole thing.
If a hypothetical end result of this is the france’s having to sell the sanction body or the tracks.
1. I’d bet they keep the tracks.
2. which ever they didnt pick could get sold to someone a lot worse than the Frances. I.e. a capital fund or the Saudis or something.
And let’s not forget. Charters are a rather anti-competitive system themselves, too. I wouldn’t be surprised if NASCAR tries to finagle their way out of them during this whole thing. Teams would really not want that to happen.
I’m going to guess whatever was signed by those teams will be a moot point once the settlement is reached at warp speed to make the antitrust lawsuit disappear.”
Well that’s a disturbing notion? One might guess the motivation to avoid discovery by NASCAR would be the prime motivation for a settlement but why not ponder what the settlement may look like as well? A good settlement with more equity or a band aid to get past the crises.
___________________________________
I do appreciate the observation regarding the error I made in using team owner points. Motivation to look further into the numbers to see if anything sticks out and if any conclusions could be reached from it.
I guess I’d start by saying even if the points portion of the analysis is muddied the win totals are not and those support my original conclusion. Wanted to redo the analysis based on points just before the playoff but those are not available or at least I could not find them. However knowing who got in is instructive.
11 of the 16 from Hendricks, Penske and Gibbs. 14 of the 16 from the top 5 teams shown in my points analysis. Since the playoffs are set first by race winners two drivers from lower achieving teams snuck in having gotten a win and wouldn’t you know it was two Gibbs cars that got the last two spots based on points.
So I’m back to the same conclusion. If the three elite team owners are winning 70% of the races, 6 teams winning 90% of the races and the playoffs are first determined by winners the point of a season before the playoffs loses a lot of it’s intrigue. It’s almost like all the rest of the teams these elite team owners compete against are obstacles to navigate before getting where they know they’ll end up.
Do fans actually like all that stage and playoff nonsense it seems awfully convoluted to me? More like smoke and mirrors, the pretense of an open competition to determine the playoff contenders but you know what team owners they’ll come from going in. Do fans disregard the elite teams domination and just view it as a driver competition? That being the case bravo to NASCAR for coming up with a system to camouflage the fact only a very small number of teams from a few owners have a chance going in.
As a fan of the NFL I can’t help but draw comparison of that sport to CUP racing. The NFL a private trade organization comprised of 32 owners with a commissioner. None of them can own more then one team nor own more then one stadium they play in. There is no owner of the NFL to snap up stadiums to capture more of the leagues revenue. The playoff system is about as basic as it gets, easy to understand who gets in and why by the vast majority of fans.
I saw some comments leading up to the playoffs from Preece fans hoping he could get a win to get in. Gotta love the optimism but given the pecking order the numbers analysis shows the odds of him capturing a win was about the same odds as being struck by lighting. On any given race day you can beat a member of one of the elite team owners but you can’t beat them all. Again comparing it to the NFL their conference structure and playoff rankings make it possible for a team with a losing record to be in the playoffs. You can argue they don’t belong there but it does keep more fans engaged and if they win a Wild Card game that alone energizes more fans.
In racing you can be a monopoly I think you just need to be structured to give the impression it’s a benevolent monopoly with the greater good of the sport in mind. If the owner has their hooks into race facilities, car and engine licensing revenue as well as control of the TV contracts are they not more of a greedy monopoly as opposed to a benevolent monopoly or at the very least give that impression?
lets look at winners than.
next gen era has had 19, 15, 17 unique winners (so far).
5,6,5 was the high score for win amount.
the old car had 12,13,15 for its last 3 years
7, 9, 10 was the high score amount.
Yes, the best teams are still the best. Without a doubt. But they are nowhere near as dominate as they used to. And there hasn’t been so many winners in recent history either.
and i would say “lighting” has struck several times in the cup series this year. suarez, cindric, dillon, burton and briscoe all would be considered lightning strikes by many. Every single one of those wins came out of nowhere.
People go on about track ownership. But the fact of the matter is the types of tracks NASCAR race at have almost 0 use outside their NASCAR weekend. The only way they survive is if they are owned in large groups and very tightly related to the sport.
Sounds like nobody happy. Time for car owners sit down with a couple multi billionaires start a new racing league. How many times do u get backed into a corner before u say effit. There is power in numbers they already have both power an numbers. There’s a rise an a fall to EVERY kingdom this kingdom needs to fall.
Frontstretch 4/17/2024
“Did You Notice?: Is NASCAR Parity with the Next Gen Really Wearing Off?”
https://frontstretch.com/2024/04/17/did-you-notice-is-nascar-parity-with-the-next-gen-really-wearing-off/
Mentioning the number of “unique” drivers is a good start in comparing pre and post introduction of the next generation car but we need to put it in context. To do that we should be adding how many of those races were won by Hendrick, Gibbs and Penske.
I separated the years prior to 2021 since other teams were winning big so the wins by the three current elite teams less meaningful.
2024-18 Separate Drivers Winning, 21* of 31 races for 68%
2023-14 Separate Drivers Winning, 22* of 36 races for 61%
2022-19 Separate Drivers Winning, 22* of 36 races for 61%
2021-15 Separate Drivers Winning, 26* of 36 races for 72%
2020-13 Separate Drivers Winning, 25* of 36 races for 69%
2019-12 Separate Drivers Winning 29* of 36 races for 81%
2018-12 Separate Drivers Winning 21* of 36 races for 58%
* Hendrick, Gibbs and Penske owner wins
If you put any store in these numbers they appear to support the article I posted previously. You can argue it may or may not be representative but in 2024 the three elite teams are improving their dominance over the previous first two years of the next generation car.
Aside from that can we say 3 or 4 more winners other the the elite teams is a major improvement in parity? An improvement for sure but given the magnitude of the change to the way cars are supplied has it been as successful as hoped?
Were I a data base wiz it would be possible to determine not just win dominance by the elite teams but finishing high race to race through the order of finish and gobbling up the lions share of the winnings. That’s not in my wheelhouse but I’d bet anything the attorney for the plaintiffs is going to have that analyzed 6 ways to Sunday and very likely will end up a strong point for their case.
Stated goals of the next generation car going in.
*Lower costs: The Next Gen car is designed to make stock car racing more affordable and accessible. NASCAR teams buy parts from single sources, and NASCAR regulates the number of cars teams can have.
*Attract new competitors: The Next Gen car is designed to attract new original equipment manufacturers (OEMs) to compete with Chevrolet, Ford, and Toyota.
*Create a more level playing field: The Next Gen car is designed to create parity, or a more level playing field, for drivers.
*Improve aerodynamics: The Next Gen car has improved aero and downforce packages.
*Increase interchangeability: The Next Gen car is factory built and largely interchangeable.
“Use new technologies: The Next Gen car introduces new technologies on the track.
*Use new materials: The Next Gen car is made from a new composite material that is more durable.
___________________________________________
So how is NASCAR doing after the better part of 3 years in accomplishing their goals?
You know what you see is it better? Does not look to me that they’ve really improved parity a whole lot based on the numbers provided and the fact a law suit is in the works.
Point one, affordability and accessibility. That implies that more cars might participate and if that’s the case these numbers of qualifiers for at least one points race in the last 8 year may be relevant.
2024-61, 2023-64, 2022-62, 2021-68, 2020-53, 2019-64, 2018-73, 2017-67.
Dropping the pandemic year that was an anomaly the numbers look fairly stable, good for CUP racing. Does not however show any real increase in accessibility.
Goal two, attracting more OEM manufacturers. Still Chevy, Ford and Toyota so no that goal has not been met.