The next major step in the 23XI Racing and Front Row Motorsports’ lawsuit against NASCAR is a hearing for a preliminary injunction. While separate from the antitrust lawsuit itself, this injunction would be unprecedented and give the two teams a leg up in their ongoing lawsuit. Here’s what you need to know about this injunction.
On Oct. 2, 23XI Racing, co-owned by NBA legend Michael Jordan and driver Denny Hamlin, joined by Bob Jenkins Front Row Motorsports, sued NASCAR on antitrust grounds. This suit claimed that for multiple reasons, including NASCAR’s track ownership and ownership of the ARCA Menard Series, NASCAR operates a monopoly over stock car racing.
What’s Happening? A lingering storyline of the 2024 NASCAR Cup Series season is ratifying a new Charter Agreement. However, it sounded…
This suit followed the two holding out on signing the 2025 NASCAR Charter Agreement. In doing so, they risked losing their charters and the financial benefits that come with those charters. However, now that they are suing NASCAR, they hope a preliminary injunction could give them a hand in their operation next year.
When the two teams sued NASCAR, the lawsuit mentioned a planned preliminary injunction. This injunction would allow these two teams to race their four chartered entries throughout the lawsuit, with a key caveat.
This caveat would prevent NASCAR from enforcing Section 10.3 of the 2025 charter agreement. As the initial filing states on page 9:
“The 2025 Charter Agreement also includes an anticompetitive release provision that purports to require the signing team to release any legal claims it may have against NASCAR that are connected to NASCAR’s determination of whether and on what criteria to enter into a Charter Agreement.”
If NASCAR were not able to enforce this release provision, the teams could remain chartered while being able to sue NASCAR. So, if the teams don’t agree with the current Charter system, why would they want the benefits that come with it?
Despite making it clear that they will compete full-time in 2025 no matter what, both teams would benefit tremendously from racing as chartered teams in 2025.
The NASCAR Charter system was introduced prior to the 2016 season. The 36 charters allow teams one automatic entry per charter owned in all 26 NASCAR Cup Series races. Each team is limited to owning four charters and can buy or sell as they please, given approval from NASCAR.
These charters sell for millions of dollars due to the financial benefits of ownership. For example, chartered teams earn money from both entering a race and from revenue sharing with NASCAR and its tracks.
The alternative is to race as an unchartered or “open” car. This is much more costly in the long run and does not guarantee a starting spot week in and out. However, there are currently four open spots at each race.
Since holding out on the 2025 Agreement and suing NASCAR, the two teams are at risk of losing their charters. NASCAR confirmed this in an Oct. 16th filing by stating:
“The deadline for Plaintiffs to sign 2025 Charter Agreements expired weeks ago, and NASCAR has taken steps, consistent with its contractual obligations to other Charter Teams, to plan for a season with only 32 Charters.”
This statement from NASCAR makes the upcoming hearing for this Preliminary Injunction all the more important.
What’s Happening? On Wednesday, both NASCAR and 23XI Racing and Front Row Motorsports filed more responses as part of the teams’…
The laundry list of reasons why 23XI and FRM want this injunction makes NASCAR opposition rather clear. Giving the teams a modified version of the agreement changes what NASCAR felt was their best offer.
In their Oct. 23 response to the team’s request for a preliminary injunction, NASCAR outlined their reasonings as to why the two teams do not deserve this injunction.
The two key reasons are that the injunction “Disrupts the Status Quo” and that the two teams contradicted themselves by wanting to be chartered teams despite their constant public disagreement with the system. The disrupted status quo refers to those chartered teams that signed the 2025 NASCAR Charter Agreement. NASCAR would have to give these two teams different contractual terms from those of the others.
Per page 7 of NASCAR’s Oct. 16 response:
“NASCAR carries contractual obligations to the 13 teams that accepted its offers of 2025 Charters, and consistent with the terms of the 2025 Charters, NASCAR is working on reallocating funds that Plaintiffs would have received to increase prize money and other special awards for the 2025 season for the benefit of teams that timely executed 2025 Charters, as well as Open teams who can compete to win the increased prize money and other special awards.”
If the two teams get their injunction, NASCAR claims this would interrupt their plans to reallocate this money and their plans to field just 32 chartered teams in 2025.
What’s Happening? Both Plaintiffs, Front Row Motorsports and 23XI Racing, in the NASCAR antitrust lawsuit have a major question lingering as…
Beyond the previously mentioned financial losses associated with losing their charters, the fallout will affect those outside the offices of 23XI Racing and FRM.
In a drastic turn of events, the two teams could miss seeing major names and sponsors in races. These names include current drivers Bubba Wallace and Tyler Reddick of 23xi and Noah Gragson and Todd Gilliland from FRM. While this is a rare event, it has happened in the past.
So how would this happen?
While most races fill their 40-car fields, Road Courses and Superspeedway races, such as the Daytona 500, often have more than enough entries. With the opening of eight more open slots, perhaps more open cars could enter these races.
Since the opening or introduction of the Charter System, these two teams have successfully entered numerous open cars in races. While it is hard to imagine, the outcome of this hearing could result in Tyler Reddick, NASCAR’s reigning regular-season champion, or Bubba Wallace, one of NASCAR’s most-known names, not being in a major race.
Furthermore, the initial lawsuit revealed that these two teams’ third charters, purchased from Stewart-Haas Racing prior to the Agreement and lawsuit, have yet to be approved by NASCAR. Zane Smith and Riley Herbst are the rumored drivers of these two cars. If the teams do not get their injunction, Smith and Herbst, along with the seller, SHR, may be affected.
NASCAR requested an extension to the initial hearing date due to Hurricane Milton. The NASCAR headquarters in Daytona were in the path of the storm. The court accepted this and granted NASCAR Nov. 4 as the hearing date.
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