23XI and Front Row Forced NASCAR to Make Charters Permanent

23XI Racing and Front Row Motorsports filed a federal antitrust lawsuit against NASCAR in October 2024 after refusing to sign a revised charter agreement that both teams called a “take-it-or-leave-it” offer issued under duress. The complaint alleged NASCAR violated the Sherman Antitrust Act by using its monopoly control over premier stock car racing to force unfair and anticompetitive terms on teams who had no alternative market to compete in.

The case, 23XI Racing and Front Row Motorsports v. NASCAR, was filed in the U.S. District Court for the Western District of North Carolina before Judge Kenneth D. Bell. It went to trial on December 1, 2025. Nine days in, on December 11, 2025, the parties settled. NASCAR agreed to make charters permanent, a concession it had refused to grant for years. The case was dismissed following the settlement. Both teams signed new charter agreements.

23XI Racing NASCAR Lawsuit Timeline and Updates

2016 — NASCAR Introduces the Charter System

NASCAR launched its charter system in 2016, creating a franchise-style structure for the Cup Series. Under the system, 36 teams hold charters that guarantee them a starting spot in every Cup Series race and a defined share of purse money distributed by NASCAR. Teams without charters, called open teams, must qualify on time and speed and receive smaller payouts.

The charter system brought stability. It also locked teams into a dependent relationship with NASCAR as the sole sanctioning body for premier stock car racing in America. Unlike franchises in the NFL, NBA, or MLB, NASCAR charters were not permanent. They expired at the end of each charter agreement period, giving NASCAR ongoing leverage over teams at renegotiation time.

2018 — Next Gen Program Tightens NASCAR’s Control

NASCAR introduced its Next Gen program in 2018, which standardized key components of Cup Series vehicles. Teams were required to purchase specified parts from NASCAR-designated, single-source suppliers. NASCAR retained ownership of the standardized components. The program also barred any vehicle containing Next Gen parts from competing in non-NASCAR events, eliminating teams’ ability to repurpose equipment for other racing series.

The Next Gen rules compounded teams’ dependence. Teams now relied on NASCAR-controlled suppliers at NASCAR-set prices. They could not take their cars elsewhere. They had one customer for their racing services: NASCAR.

Early 2024 — Charter Negotiations Begin

The existing charter agreement was set to expire at the end of the 2024 season, coinciding with the expiration of NASCAR’s previous media rights deal. In early 2024, NASCAR began negotiations with its 15 chartered team organizations on a new agreement covering the 2025 through 2031 seasons. Teams entered negotiations seeking permanent charters, improved revenue sharing, and relaxed restrictions on competing in other series.

Heather Gibbs, chief operating officer of Joe Gibbs Racing, wrote a letter to NASCAR Chairman Jim France in May 2024 urging him to make charters permanent for the sake of teams’ long-term viability and family businesses. The request went unmet. NASCAR made incremental adjustments over the following months but refused the core demands.

September 6, 2024 — NASCAR Issues Final Charter Terms with Six-Hour Deadline

On September 6, 2024, one day before the start of the NASCAR Cup Series playoffs, NASCAR presented teams with its final 112-page charter agreement and gave them until midnight to sign. Teams had approximately six hours to review and accept or reject the contract.

The offer reduced the share of revenues distributed to teams compared to prior arrangements and expanded restrictions on participation in competing or alternative racing events. Thirteen of the fifteen chartered team organizations signed, describing it as a coercive situation with no viable alternative. Only 23XI Racing and Front Row Motorsports refused.

Trial testimony from Michael Jordan later described the signing deadline as a deliberate pressure tactic. Jordan testified that attorneys advised him he would have a strong antitrust case if NASCAR proceeded as it did, and that he felt he was one of the few team owners with the financial backing to challenge the series. Internal NASCAR text messages surfaced during litigation, including an alleged message from NASCAR President Steve O’Donnell internally describing a draft of the charter agreement as “F— the teams.”

October 2, 2024 — Lawsuit Filed

23XI Racing and Front Row Motorsports filed their federal antitrust complaint on October 2, 2024. The teams retained Jeffrey Kessler of Winston & Strawn as lead counsel. Kessler had previously won major antitrust cases against the NFL and the NCAA, giving the teams an experienced advocate in sports antitrust litigation.

The complaint named NASCAR and NASCAR Chairman and CEO Jim France as defendants. It alleged violations of the Sherman Antitrust Act, specifically that NASCAR used its monopoly power over premier stock car racing to maintain that monopoly through anticompetitive charter terms. The teams argued the charter structure prevented them from earning a fair return on investments running to tens of millions of dollars per season, that single-source supplier arrangements for Next Gen parts amounted to monopoly pricing, and that noncompete provisions blocked teams from exploring other racing opportunities.

The two teams simultaneously announced plans to file for a preliminary injunction to race as chartered teams during the 2025 season while litigation proceeded. Jordan publicly quoted the film Moneyball, conveying through co-owner Denny Hamlin that the first one through the wall gets bloody but something important was worth fighting for.

October 9, 2024 — Teams File for Preliminary Injunction

23XI and Front Row filed their preliminary injunction motion, seeking court recognition as chartered teams for 2025 and requesting expedited access to internal NASCAR documents and executive files. NASCAR responded by announcing it would proceed with only 32 charters for 2025, down from the usual 36, effectively threatening to redistribute the teams’ spots.

November 4, 2024 — Injunction Hearing Before Judge Whitney

U.S. District Judge Frank D. Whitney held a hearing on the preliminary injunction request on November 4, 2024. Michael Jordan and Denny Hamlin attended alongside NASCAR Chairman Jim France and veteran NASCAR executive Mike Helton. Jeffrey Kessler argued for the teams; Chris Yates argued for NASCAR.

A point of sharp dispute was a clause in the 2025 Charter Agreement that would have prohibited any team that signed it from suing NASCAR for any reason. That clause would have forced teams to choose between keeping their charters and maintaining their legal rights. During the hearing, explosive internal text messages came to light. Jordan was shown to have called other team owners derogatory names for signing NASCAR’s agreement. The disclosed texts added to the atmosphere of open institutional conflict.

November 8, 2024 — First Injunction Denied

Judge Frank D. Whitney denied the preliminary injunction request on November 8, 2024, the day before NASCAR’s championship weekend. The court found the teams had not clearly established they would suffer irreparable harm sufficient to justify the injunction. Without charters, the teams faced the prospect of competing as open teams in 2025 with reduced revenue and no guaranteed race entries.

Jenkins, Front Row’s owner, had previously told the Associated Press that the two teams stood to lose a combined $45 million in revenue if forced to compete as open teams. He said he was willing to absorb that loss because he believed the antitrust case was winnable.

November to December 2024 — NASCAR Removes Anti-Lawsuit Clause and Teams Win Second Injunction

NASCAR removed the clause prohibiting chartered teams from suing it, clearing the way for teams to pursue the lawsuit while competing under charter status. The case was reassigned to Judge Kenneth D. Bell. 23XI and Front Row refiled their injunction motion before Bell.

Judge Bell granted the preliminary injunction in December 2024. The ruling permitted both teams to race as chartered entries in the 2025 Cup Series season and required NASCAR to approve each team’s purchase of an additional charter from Stewart-Haas Racing, which was dissolving from four cars to one. Bell wrote that the public interest strongly favored the injunction, giving fans the full roster of teams and allowing the antitrust claims to be heard.

Early 2025 — Fourth Circuit Appeals Court Overturns Injunction

NASCAR appealed the Bell injunction to the U.S. Court of Appeals for the Fourth Circuit. In a decision issued in early 2025, the Fourth Circuit overturned the preliminary injunction, ruling in NASCAR’s favor. The teams were no longer operating as chartered teams by court order. However, NASCAR did not redistribute their charters, and the field size ensured both teams could qualify for each race week as open teams. Neither team missed a race.

The case continued toward trial. A December 2025 trial date was set before Judge Bell.

December 1, 2025 — Trial Opens in Charlotte

The antitrust trial opened on December 1, 2025, at the Charles R. Jonas Federal Building in Charlotte, North Carolina, before Judge Kenneth D. Bell. Michael Jordan was present on the first day. Jury selection proceeded and opening statements were delivered. Judge Bell admonished both sides for confrontational conduct in their opening remarks, warning them to lower the temperature.

The trial featured testimony from multiple NASCAR executives, including NASCAR President Steve O’Donnell and Executive Vice President Scott Prime, both of whom had been central to the charter negotiations. Testimony from NASCAR’s side covered the economics of the charter system and NASCAR’s justification for its approach to the 2025 agreement.

December 5, 2025 — Michael Jordan Testifies

Michael Jordan took the stand on approximately the fifth day of trial. He testified that he felt he was one of the few team owners with the financial standing and independence to challenge NASCAR’s practices. Jordan described the charter negotiation process as fundamentally unfair, with no meaningful opportunity to negotiate terms. He testified that NASCAR’s revenue structure prevented teams from sharing in the sport’s growth during profitable periods, unlike every other major professional sports league.

Jordan’s testimony also addressed the internal text messages. He acknowledged the language he had used about other team owners who signed NASCAR’s agreement, framing it as frustration at a system that left teams without real choice.

December 9 to 10, 2025 — NASCAR Chairman Jim France Testifies

NASCAR Chairman and CEO Jim France took the stand as NASCAR presented its defense. France’s testimony covered the business rationale behind the charter structure and NASCAR’s position on revenue sharing. The trial entered its second week with NASCAR still in the midst of its defense presentation when the settlement came.

December 11, 2025 — Settlement Reached on Day Nine

On the ninth day of trial, Judge Bell set aside a motions hearing for an unscheduled one-hour sidebar. Jeffrey Kessler emerged from a conference room to inform the court clerk that the parties were ready. Kessler then led Jordan, Hamlin, and Jenkins to a separate room for final talks. Within hours, the settlement was announced.

Kessler told Judge Bell the parties had reached a resolution “in a way that will benefit the industry going forward.” NASCAR President Steve O’Donnell was photographed shaking hands with Michael Jordan outside the courthouse, moments after the two had been adversaries in active litigation.

The settlement’s key terms included: evergreen charters for all 15 Cup Series chartered team organizations, meaning charters would no longer expire at the end of a set agreement term; team representation in NASCAR governance; and a greater percentage of various NASCAR revenue streams directed to teams. Financial terms of the settlement were not publicly disclosed. Both 23XI Racing and Front Row Motorsports signed new charter agreements as part of the resolution.

February 2026 — Case Dismissed

Following the settlement, the case was formally dismissed. 23XI Racing and Front Row Motorsports were operating as fully chartered teams under a new agreement that included the structural concessions they had sued to obtain.

What the Teams Alleged

The Sherman Antitrust Act prohibits monopolization and attempts to monopolize any part of trade or commerce. Section 2 of the Act targets monopoly maintenance, where a company uses its dominant market position to exclude competition or impose unfair terms on those who depend on it.

The complaint argued NASCAR holds monopoly power over premier stock car racing in the United States. There is no competing series that offers comparable prestige, television exposure, sponsorship value, or revenue. A team that wants to race at the highest level of American stock car racing has one option: NASCAR. That single-buyer dynamic is what antitrust lawyers call a monopsony, the mirror image of a monopoly where a single buyer controls the market for a product or service.

The teams argued NASCAR exploited that position in three ways. First, the charter agreement gave NASCAR the ability to revoke charters, threatening teams with exclusion if they refused terms. Second, the Next Gen rules locked teams into single-source suppliers at prices set by NASCAR-designated vendors with no competitive alternatives. Third, the noncompete provisions prevented teams from competing in other series during the off-season or in non-conflict weeks, eliminating any safety valve.

Trial testimony drove the financial stakes home. Witnesses described teams that had exited NASCAR over decades due to the economics. Evidence showed that $18 million per season was the baseline cost to field a competitive car, before driver salary. Teams argued the charter agreement’s revenue allocation left them unable to earn a return on that investment as the sport grew more valuable during NASCAR’s new media rights cycle.

Why the Settlement Matters

Evergreen charters are the central concession and they change the structural power relationship in NASCAR permanently. Under the old system, every charter expired. Expiration gave NASCAR maximum leverage at each renegotiation. A team owner who invested tens of millions in infrastructure, drivers, and sponsors knew that NASCAR could decline to renew the charter at the end of the agreement period. That threat, whether ever exercised or not, conditioned every negotiation.

Permanent charters remove that threat. A team with an evergreen charter owns a durable asset. It can plan long-term, attract investment, secure financing against the charter’s value, and negotiate from a position of security rather than precarity. The settlement also gave teams a voice in governance, a structural change that previous league disputes in other sports took decades to achieve.

The Duane Morris law firm analysis of the settlement noted that the case underscores that exclusivity, noncompete, and single-source supply provisions in professional sports agreements may raise antitrust concerns when imposed by a dominant sanctioning body. The firm identified the use of “take-it-or-leave-it” contracting with short deadlines and threats of competitive exclusion as legally significant conduct.

What This Lawsuit Teaches Consumers

The 23XI Racing case is a sports antitrust case, not a consumer protection case. But the dynamics it exposed apply broadly to how closed systems extract value from those trapped inside them.

NASCAR’s charter structure is not unique in sports. Every major league uses some version of controlled access to maintain its position. The NFL, NBA, and MLB all have franchise systems that limit entry and set revenue terms. What made NASCAR vulnerable was the combination: expiring charters, single-source parts suppliers, noncompete clauses, and a midnight deadline for a 112-page contract. That combination made it hard to argue the system was fair even to observers without a stake in racing.

Michael Jordan’s decision to sue mattered for a specific reason. Most team owners in most sports lack the financial independence to resist a sanctioning body’s terms when the alternative is exclusion. Jordan had the resources to absorb short-term losses and the legal budget to hire Jeffrey Kessler. The settlement’s benefits went to all 15 charter-holding teams, not just the two that sued. The teams that signed NASCAR’s agreement in September 2024 under duress got permanent charters too, as a result of Jordan and Jenkins refusing to do the same.

That pattern appears repeatedly in institutional antitrust enforcement: the party willing to absorb the cost of litigation extracts a benefit that flows to everyone who was not willing or able to fight. The first one through the wall gets bloody. Everyone behind them walks through.

Sports antitrust cases with comparable dynamics include the Market America RICO suit, which challenged how a dominant network used contractual control to suppress competition. The coercive contracting dynamics here echo the Blue Cross Blue Shield antitrust case, which resulted in a $2.67 billion settlement over anticompetitive market allocation. The Sherman Act issues at the heart of this case also paralleled litigation covered in the JUUL pod price-fixing case, where market control over a distribution channel formed the basis of antitrust claims. And the way text messages became central courtroom evidence tracks what occurred in the Candace Owens defamation cases, where private communications became the most damaging exhibits at trial.