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12/01 12:59 CST NASCAR antitrust trial opens with huge stakes and Michael
Jordan in the courtroom
NASCAR antitrust trial opens with huge stakes and Michael Jordan in the
courtroom
By JENNA FRYER
AP Auto Racing Writer
CHARLOTTE, N.C. (AP) --- The federal antitrust trial against NASCAR opened
Monday with the star power of Michael Jordan on hand as a jury of nine was
seated to hear allegations that the stock car series is a monopolistic bully
that leaves its teams no option but to comply with rules and financing they
don't agree with.
The retired NBA Hall of Famer is the co-owner of the 23XI Racing team at the
top Cup Series level. 23XI and Front Row Motorsports sued the series last year
rather than sign extension agreements on new charters, which are franchise-type
designations that serve as the framework for the revenue stream between NASCAR
and the teams.
The stakes are huge: The charters are at the heart of NASCAR's business model
--- they guarantee a car a spot in the field each race week as well as a
percentage of the purse --- and the disputes over how they work have dominated
the series of late. A loss for the two teams could oust them from the series
while a loss for NASCAR could mean a fundamental restructuring of how the
series operates.
Six men and three women were seated for a trial expected to last two weeks
before U.S. District Judge Kenneth Bell, who asked for opening statements to be
completed later Monday. Bell ruled that 23XI co-owner and star driver Denny
Hamlin and Curtis Polk, the longtime business manager for Jordan and part of
the team's ownership group, will be sequestered after opening statements before
they testify.
Jordan's presence in the courtroom gallery near Hamlin was a factor: Among
those dismissed from serving on the jury was a man who said he can't be
impartial because "I like Mike" and another who said he had Michael Jordan
posters on his walls growing up. A juror said they were a North Carolina fan
but noted the football team at Jordan's alma mater is not "doing too well right
now" to which the retired star shook his head and laughed.
NASCAR executives in the courtroom included chairman Jim France and vice chair
Lisa France Kennedy, two scions of the family that founded NASCAR in 1948 and
still owns it.
23XI and Front Row were the only two teams out of 15 to refuse to sign
extensions on new charter agreements last fall. The teams wanted multiple
concessions, and when they didn't get them, they went to court. The case has
churned through hearings and arguments for more than a year despite calls from
other NASCAR teams to settle. Bell even helped mediate a failed two-day summit
in October.
A NASCAR victory could put 23XI, Front Row and their six combined cars out of
business. Their charters --- now being held by NASCAR --- would likely be sold.
The last charter went for $45 million, and NASCAR has indicated there is
interest from potential buyers including private equity firms.
A win for the teams would lead to monetary damages and the potential demolition
of NASCAR as it is run today. The judge has the power to unravel a monopoly,
and nothing is off the table, from ordering a sale of NASCAR to the dismantling
of the charter system.
The allegations The charter system introduced in 2016 is NASCAR's version of the franchise model used by most professional sports leagues. Being chartered guarantees that car a spot in the 40-car field for all 38 races, as well as a defined payout from the weekly purse. Even with the charters, the teams have argued that the revenue model is not viable. The teams wanted more favorable terms for the charters, including having them made permanent (they are renewable and revocable), a larger percentage of revenues and a voice in governance. 23XI and Front Row also argue NASCAR has a vice grip on all aspects of the racing series and allege a monopoly based on exclusivity clauses, ownership of most of the race tracks on the Cup Series schedule and its control of the rules and regulations. NASCAR says it has not violated antitrust law because it has done nothing to restrain trade beyond normal business practices. NASCAR has argued that payouts in the 2025 charter agreement increased and prove the series is not anticompetitive. NASCAR has also cited the option for cars to enter races as "open teams" and try to make the field in one of four nonchartered spots on qualifying speed. 23XI and Front Row raced this season as open teams, and while their combined six cars made every race, it cost the organizations millions in purse money. The pretrial discovery process revealed NASCAR made more than $100 million in 2024.
Behind-the-scenes drama The discovery phase was brutal for both sides. The antitrust allegations have exposed salacious personal communications, NASCAR's finances and a deep contempt between some of the top executives in the sport and its participants. NASCAR Commissioner Steve Phelps was among leadership who in a discussion with other NASCAR executives called Hall of Fame team owner Richard Childress a "dinosaur," an "idiot" and a "stupid redneck." The discussion also included a reference that Childress "owes his entire fortune to NASCAR" and needed "to be taken out back and flogged." Another NASCAR executive alleged that fans of the sport can't read, and multiple series leaders admonished Hall of Fame driver Tony Stewart's summer short-track series, SRX, and threatened to have it the killed because NASCAR drivers were participating. On the other side, the president of 23XI was found to have said France had to die in order to receive favorable charter terms, Hamlin admitted his dislike for the France family, one of Jordan's advisers said Hamlin wasn't a good businessman and Jordan joked that he loses more money in a casino than he pays one of his drivers. Hamlin, a three-time Daytona 500 winner who less than a month ago had the Cup Series championship slip through his fingers, warned this weekend that the gloves will be off during the trial. "Our fans have been brainwashed with (NASCAR's) talking points for decades," Hamlin wrote on social media. "Lies are over starting Monday morning. It's time for the truth. It's time for change." ___ AP auto racing: https://apnews.com/hub/auto-racing
The allegations The charter system introduced in 2016 is NASCAR's version of the franchise model used by most professional sports leagues. Being chartered guarantees that car a spot in the 40-car field for all 38 races, as well as a defined payout from the weekly purse. Even with the charters, the teams have argued that the revenue model is not viable. The teams wanted more favorable terms for the charters, including having them made permanent (they are renewable and revocable), a larger percentage of revenues and a voice in governance. 23XI and Front Row also argue NASCAR has a vice grip on all aspects of the racing series and allege a monopoly based on exclusivity clauses, ownership of most of the race tracks on the Cup Series schedule and its control of the rules and regulations. NASCAR says it has not violated antitrust law because it has done nothing to restrain trade beyond normal business practices. NASCAR has argued that payouts in the 2025 charter agreement increased and prove the series is not anticompetitive. NASCAR has also cited the option for cars to enter races as "open teams" and try to make the field in one of four nonchartered spots on qualifying speed. 23XI and Front Row raced this season as open teams, and while their combined six cars made every race, it cost the organizations millions in purse money. The pretrial discovery process revealed NASCAR made more than $100 million in 2024.
Behind-the-scenes drama The discovery phase was brutal for both sides. The antitrust allegations have exposed salacious personal communications, NASCAR's finances and a deep contempt between some of the top executives in the sport and its participants. NASCAR Commissioner Steve Phelps was among leadership who in a discussion with other NASCAR executives called Hall of Fame team owner Richard Childress a "dinosaur," an "idiot" and a "stupid redneck." The discussion also included a reference that Childress "owes his entire fortune to NASCAR" and needed "to be taken out back and flogged." Another NASCAR executive alleged that fans of the sport can't read, and multiple series leaders admonished Hall of Fame driver Tony Stewart's summer short-track series, SRX, and threatened to have it the killed because NASCAR drivers were participating. On the other side, the president of 23XI was found to have said France had to die in order to receive favorable charter terms, Hamlin admitted his dislike for the France family, one of Jordan's advisers said Hamlin wasn't a good businessman and Jordan joked that he loses more money in a casino than he pays one of his drivers. Hamlin, a three-time Daytona 500 winner who less than a month ago had the Cup Series championship slip through his fingers, warned this weekend that the gloves will be off during the trial. "Our fans have been brainwashed with (NASCAR's) talking points for decades," Hamlin wrote on social media. "Lies are over starting Monday morning. It's time for the truth. It's time for change." ___ AP auto racing: https://apnews.com/hub/auto-racing
