NASCAR News: 2 Cup teams file antitrust lawsuit against NASCAR (7th Update)
The judge assigned to the antitrust case filed by Front Row Motorsports and 23XI Racing against NASCAR did not make a decision during a hearing Monday on the teams’ request for a preliminary injunction.
The teams want NASCAR to allow them to continue to run as chartered cars while the case proceeds. NASCAR says the teams did not sign the charter agreements so they need to compete as open teams.
A decision will likely be made before Friday.
Some things learned at hearing:
—Reddick and 23XI sponsors can leave if they run as an open team.
—NASCAR attorney said nearly half of the broadcast revenue goes to the teams as part of the new charter agreement.— Bob Pockrass (@bobpockrass) November 4, 2024
23XI/FRM’s Jeffrey Kessler speaks outside the courthouse: pic.twitter.com/bSEx720Mfv
— Adam Stern (@A_S12) November 4, 2024
October 19, 2024
NASCAR has branded the antitrust lawsuit filed by 23XI Racing and Front Row Motorsports as “meritless.”
The lawsuit, filed in North Carolina, accuses NASCAR and its CEO, Jim France, of engaging in monopolistic practices that disadvantage racing teams and unduly benefit NASCAR’s business interests. The plaintiffs, co-owned by well-known figures such as NBA legend Michael Jordan and renowned NASCAR driver Denny Hamlin, allege that NASCAR’s actions have unfairly enriched the sanctioning body at the expense of their teams.
The organization asserts that the claims brought forward by 23XI Racing and FRM lack a substantial basis, describing them as “baseless antitrust claims.”
“Plaintiffs have filed a meritless suit against NASCAR alleging baseless antitrust claims in order to obtain commercial agreements they previously rejected, and to attempt to extort more favorable contract terms,” NASCAR said in a court filing.
The lawsuit itself challenges several of NASCAR’s business practices as anti-competitive. According to the complaint, NASCAR is accused of acquiring racetracks, exclusive rights agreements, and imposing exclusivity deals, which critics suggest disrupt competitive fairness. The legal claim also challenges NASCAR’s acquisition of the Automobile Racing Club of America (ARCA) as a further means of consolidating its influence within the racing world. The central contention from 23XI Racing and FRM relates to the management and distribution of charters for teams, with both teams refusing to sign new agreements citing lack of fairness and transparency.
October 10, 2024
NASCAR will oppose the preliminary injunction sought by 23XI Racing and Front Row Motorsports to run as chartered teams while its lawsuit against the sanctioning body continues.
The filing was made at 10:29 p.m. on Wednesday night in advance of a hearing currently set for Wednesday.
The filing includes the following passage:
“Defendants are working to prepare oppositions that provide argument, applicable law, and, evidentiary support to demonstrate Defendants positions: l) Plaintiffs are seeking a mandatory injunction that is only warranted in the most extraordinary circumstances (which are not present here) since they are seeking to alter the status quo through an injunction requiring NASCAR to provide Charters for 2025 and beyond notwithstanding that the time to sign Charters for 2025 has expired; 2) Plaintiffs cannot establish irreparable harm since Plaintiffs and their counsel have confirmed that Plaintiffs’ teams will compete as open teams in 2025, which means that money damages can compensate Plaintiffs even if they were to ultimately prevail; and 3) Plaintiffs cannot establish a likelihood of success on the merits for multiple reasons, including that this is a dispute over contract terms, not an antitrust case.”
23XI Racing and Front Row Motorsports filed a preliminary injunction
23XI Racing and Front Row Motorsports filed a preliminary injunction in their antitrust case against the National Association for Stock Car Auto Racing (NASCAR) seeking to immediately enable the teams to continue racing in 2025 as chartered teams while the case moves through the legal process.
In a joint statement, 23XI Racing and Front Row Motorsports said, “The 23XI and Front Row Motorsports teams are fully committed to competing in next year’s Cup Series. Today’s procedural filing is the next step in advancing our case against NASCAR and their monopolistic practices, while protecting our drivers, race teams, and sponsors by establishing our legal right to run in 2025.”
The teams also filed a motion for expedited discovery, asking the court to give the teams’ legal counsel immediate access to documents and files from NASCAR executives Jim France, Lesa France Kennedy, Ben Kennedy, Steve O’Donnell, Steve Phelps, and Scott Prime. Key components of discovery that 23XI Racing and Front Row Motorsports are seeking include:
– Documents discussing the mandatory release provision in the 2025 charter agreement;
– Documents discussing NASCAR’s decision to end negotiating with the Team Negotiating Committee and only negotiate with individual racing teams for the 2025 charter agreement; and
– Documents discussing NASCAR’s decision to present to the teams a take-it-or-leave-it final proposal for the 2025 charter agreement.
“NASCAR’s dominant control over racing is not because of its superior skill or business acumen, but rather its history of exclusionary acts and restrictive agreements that have stifled competition through its monopoly power. We believe our expedited discovery requests of NASCAR and the France family will shed light on their anticompetitive practices and support a preliminary injunction ruling that 23XI and Front Row Motorsports have a legally protected right to race next year while our antitrust case proceeds in Court,” said Jeffrey Kessler, Winston & Strawn LLP Partner and Co-Executive Chairman, and lead counsel for 23XI Racing and Front Row Motorsports.
The expedited discovery motion also seeks documents and files surrounding NASCAR’s exclusive or restrictive contracts with independently owned racetracks that have hosted Cup Series races since 2016, NASCAR’s acquisitions of the International Speedway Corporation (ISC) and Automobile Racing Club of America (ARCA), and the charter agreement provisions that restrict teams from competing in non-NASCAR events and from using Next Gen parts and cars in non-NASCAR events. Procedural motions follow 23XI Racing and Front Row Motorsports jointly filing an antitrust lawsuit in the Western District of North Carolina on October 2, 2024, against NASCAR and its CEO Jim France. 23XI Racing and Front Row Motorsports
October 9, 2024
The antitrust lawsuit brought against NASCAR by 23XI Racing and Front Row Motorsports now has lawyers on both sides.
NASCAR (the filthy rich France Family) has hired Chris Yates of Latham & Watkins. Yates represented the Ultimate Fighting Championship in a class action lawsuit brought forth by over 1,000 fighters who claimed the MMA promotion violated antitrust laws. That case reached a $375 million settlement.
Matt Weaver of Sportnaut.com writes that Yates and Kessler have also most recently argued against each other in the Name Image and Likeness settlement that awarded NCAA athletes revenue sharing opportunities in addition to the ability to earn revenue from their respective personal brands.
October 4, 2024
While the quotes provided during a Wednesday morning press conference were informative, the interview attorney Jeffrey Kessler who is representing the two teams against NASCAR provided SiriusXM NASCAR Radio on Wednesday were much more candid.
“So this is an antitrust case. The antitrust laws are laws that regulate fair competition. One of the things the antitrust laws prohibit is somebody getting a monopoly, which means you are the only competitor through unfair anti-competitive means.
“NASCAR is the poster child for being an illegal monopoly. It is, as all your fans know, the only premier stock car racing circuit in the country, maybe in the world and it’s got that position not by being the best or by investing money or by having the best thing out there that no one compete with.
‘No, it got there by acquiring its competitors tied up the racetracks so no one else could compete with it. Going to all the teams who are independent contractors and saying you can’t go race at anybody else’s races and imposing restrictions on the cars, that the teams can’t even take their NextGen car and put it in another race.
“So all of this gives them this monopoly power. And what do they do with that power? Well, they’re not like some kind of like benign dictator monopolist. This is what they do: They go to the teams on September 6th and they say to the teams, here is our take it or leave it offer to be a charter team in NASCAR. If you do not take it in the next hour, you are out, you’ll not get a charter.
“We might even get rid of the charters. We will destroy the whole economics of your organization. So what happens, 13 of the 15 race teams could not take that pressure. They said, well, if the alternative is this bully is gonna crush me if I don’t say yes, I guess I’m saying yes. Two teams had the ability, the fortitude, the resources to say, ‘I am not gonna take this anymore.’
“Someone has gotta hold NASCAR to the same laws that apply to all other businesses. So that was 23XI and Front Row. They hired me and that’s why we filed this case.”
“So it’s the teams and the drivers that end up getting just enough economic scraps that they can barely survive and a lot of them can’t survive. In 2016, of the 19 owners (part of the first charter agreement) 11 of them don’t exist anymore because they couldn’t survive under this system. Something has got to change.
“If the teams are gonna invest in this sport, if the teams are going to make a better product for the fans, if the teams are going to survive long term, they have to be able to have a fair chance if they’re successful to get some kind of fair return for their investment. This sport does not permit that because the France family run this monopoly to stifle it. That’s what has to change.”
More from scathing quotes from Kessler at Sportsnaut.com
October 3, 2024
Co-team owner of 23XL Racing, Denny Hamlin said, “They made a very serious threat to us, so we had to react seriously,” per Jeff Gluck and Jordan Bianchi of The Athletic.
Hamlin told Kelly Crandall of RACER he believes the sanctioning body has wielded its power “in an unfair manner.”
“I didn’t realize until re-investing the money that I’ve made as a driver back into the sport to put on a show for Jim France and NASCAR, how unfair this whole system is,” Hamlin said. “I didn’t realize they would exercise the power that they did in an unfair manner, in my opinion, and we just got to a tipping point where we all said, enough is enough and let’s exercise some options.”
Attorney Jeffrey Kessler is representing 23XI and Front Row in litigation. Kessler, who has previously scored court victories which have led to the creation of NFL free agency, implementation of name, image and likeness (NIL) in collegiate athletics and equal pay for the United States women’s national soccer team, said they are seeking “significant change” from NASCAR in making a “fair system for the teams.”
“If NASCAR is willing to change, it’s got to be a significant change to make a fair system for the teams,” Kessler said. “If they’re not willing to do that kind of a deal, then they’ll take this case all the way to a jury and a judge. And that’s why I say they’ll be forced to change. It’s the same type of thing I went through with the NCAA, who had a choice to make. They could keep fighting in court and keep losing and have the new system thrust upon them. Or in that case, they finally sat down and said, we’re ready to transform the sport and we’ll be a part of it.
“That’s the type of choice that NASCAR is going to face.”
October 2, 2024
In this video, 23XI and FRM’s lawyer, Jeffrey Kessler, breaks down – in simple terms – the grounds for their antitrust lawsuit.
23XI and FRM’s lawyer, Jeffrey Kessler, breaks down – in simple terms – the grounds for their antitrust lawsuit. 💼 pic.twitter.com/p5bK7VlTog
— Dirty Mo Media (@DirtyMoMedia) October 2, 2024
October 2, 2024
Two NASCAR teams, including one owned by basketball icon Michael Jordan, accused NASCAR of being a monopoly in a joint antitrust lawsuit filed Wednesday morning in federal court.
23XI Racing, the team co-owned by Jordan and three-time Daytona 500 winner Denny Hamlin, joined with Front Row Motorsports to allege NASCAR and its CEO Jim France have used “anticompetitive and exclusionary practices” to “enrich themselves at the expense of the premier stock car racing teams.”
…
NASCAR did not offer an immediate comment as it is reviewing the filing.
The teams claim that while even the winningest organizations struggle to break even, NASCAR has unlawfully blocked the formation or growth of any other series — thus forcing competitors “to accept take-it-or-leave-it economic conditions” in order to participate. The Athletic
AND: 23XI and Front Row Motorsports issued a joint statement Wednesday morning:
“We share a passion for racing, the thrill of competition, and winning. Off the racetrack, we share a belief that change is necessary for the sport we love. Together, we brought this antitrust case so that racing can thrive and become a more competitive and fair sport in ways that will benefit teams, drivers, sponsors, and, most importantly, fans’.”
Joint statement from 23XI Racing and Front Row Motorsports. https://t.co/OJiFZh3Ljt pic.twitter.com/eIroHelz9R
— Front Row Motorsports (@Team_FRM) October 2, 2024
The lawsuit seeks details from NASCAR and France “related to their exclusionary practices and intent to insulate themselves from any competition.” [Jeffrey Kessler, a top antitrust attorney] said he would ask for a preliminary injunction that will enable the two teams to compete in 2025 under the new charter agreement while the litigation proceeds.
The teams said they will seek treble damages for anti-competitive terms that have ruled the sport since the initial 2016 charter agreement.
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NASCAR, based in Daytona Beach, Florida, had no immediate comment. Associated Press