Michael Jordan’s 23XI and NASCAR have the first preliminary hearing on an antitrust case

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

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

On the fifth floor of the federal courthouse in Charlotte, the team’s attorney, Jeffrey Kessler, spoke with NASCAR attorney Chris Yates in a testy, sometimes contentious hearing. At stake is a clause in NASCAR’s 2025 charter agreement with teams that does not allow them to take 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 as non-charter “open” teams.

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

23XI Racing co-owners Michael Jordan, Denny Hamlin and Curtis Polk, and Bob Jenkins and Jerry Freeze of Front Row Motorsports walk into a federal courthouse for today’s 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 that NASCAR put on the table on September 6, when 13 owners signed it. The DocuSign originally had a deadline of Nov. 5, Kessler said, but NASCAR has now rescinded it.

Yates said NASCAR will no longer enter into a charter agreement with the teams after they publicly discredited NASCAR.

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

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

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

Jordan spent much of Yates’ arguments leaning forward attentively from his seat in the courtroom’s front row, sometimes with a grin and sometimes holding his chin.

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

— Jeff Gluck (@jeff_gluck) November 4, 2024

Yates said that under the 2025 charter agreement, racing teams would receive about half of all TV revenue and the worst-performing charter team would receive a 50 percent increase in payouts over the current agreement.

He said NASCAR was contractually obligated to notify teams by Nov. 1 of the amount of money for next season. Therefore, 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 to every Cup Series race, along with a greater share of race winnings. Yates claimed the teams asked the judge to force NASCAR into a seven- to 14-year deal by rewriting the contract “on terms of their preference.”

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

Kessler denied that, saying the teams only wanted the judge to waive the clause for the duration of this case, adding, “Hopefully it doesn’t last 14 years.”

Yates also said the teams’ claim that many owners were forced to sign the new agreement on September 6 was incorrect because team owners like Roger Penske, Rick Hendrick and Pro Football Hall of Fame coach Joe Gibbs are not the type of people who pushed around. He also quoted Hendrick and owner Justin Marks as saying they were satisfied with the terms of the new charter agreement.

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

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Yates responded: “We disagree on virtually everything he has argued.”

Kessler also revealed that 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. Before the hearing, Whitney told attendees he hadn’t seen his courtroom this full “in a number of years,” adding, “I feel like I have two full law firms in front of me as well.”

Whitney initially seemed skeptical of Kessler’s claims, while more open to Yates’ arguments, but Kessler’s rebuttals left the two sides on equal footing.

The judge praised both lawyers for their “extraordinary” and “very excellent arguments” and said he would issue a written ruling on Friday.

Both parties seemed satisfied afterwards. Although NASCAR made no comment, France turned and winked at senior advisor Mike Helton in the row behind him.

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

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

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(Photo: Sean Gardner/Getty Images)