NASCAR
23XI Racing & FRM v. NASCAR Trial Underway in Federal Court
CHARLOTTE, N.C. – Temperatures were cold but tensions were high in Charlotte, North Carolina Federal Court on Monday, December 1. Plaintiffs 23XI Racing and Front Row Motorsports both convened with defendants NASCAR to formally begin an antitrust suit filed over a year ago. The day began with jury selection and opening statements from both sides’ attorneys. Following that, 23XI Racing co-owner Denny Hamlin took the stand as the first witness. The trial is being presided over by Judge Kenneth D. Bell in Courtroom 2-1.
Renowned sports attorney and plaintiffs’ counsel Jeffrey Kessler narrowed 23XI and FRM’s disputes to four pillars. The teams are arguing for: permanent charters, higher prize money payments, an additional $20 million per car each year to cover operating expenses, and a voice in the sport’s governance.
Other issues brought forth by Kessler included significant financial gains by the France family. This comes despite very shaky economic grounds for race teams. Hamlin later explained that of 19 teams that signed the original charter agreement in 2016, 11 of them are no longer in business. Kessler reiterated that document evidence will claim the France family made NASCAR leadership decisions for their own benefit and cared little for race team’s struggles. Kessler also addressed the Next Gen Car. He said that it has made racing less competitive and is rife with protections that prevent any piece of it from being used elsewhere.
Kessler also emphasized that his other client, Front Row Motorsports, had not turned a profit in 20 years of operation. “Bob [Jenkins] is an average team owner. They don’t have a chance at making a profit, the deal is not fair.”
One final point hammered home multiple times by Kessler was “witnesses don’t always tell the truth, documents don’t lie.” Through hundreds of pieces of evidence, Kessler is hoping to prove malice and intentional anticompetitive practices taken from the sanctioning body.
Kessler’s time led into NASCAR counsel John E. Stevenson’s opening remarks. Stevenson, taking the place of lead defense attorney Christopher Yates, began by outlining three things evidence will show:
- The charter system was requested by teams and made in collaboration with the league, with both parties negotiating terms.
- None of the plaintiffs’ anticompetitive conduct claims were ever brought forth until the lawsuit.
- Teams spent two-and-a-half years negotiating terms of the 2025 charter agreement, and the plaintiffs’ experts will not say the terms are below market value.
NASCAR’s arguments also stated that the lawsuit was an intended negotiation tactic by 23XI co-owner Curtis Polk. They claim evidence shows a specified playbook and timeline that included litigation, as he tried lobbying for permanent charters. NASCAR also reiterated that the teams are making more money from the media rights agreement (signed in 2023) than before. This is in addition to funding increases under the 2025 charter deal.
Stevenson went on to reference past comments made by Polk commending the charter-based business model and the France family’s leadership. In June 2023, Polk apparently said: “You got to admire what the France family and NASCAR senior management has accomplished over 75 years, particularly in the last five.”
The first day of trial ended with the start of Denny Hamlin taking the stand as the first witness. Hamlin’s testimony began with a few jokes, claiming: “[high school] gave me a diploma,” and wanting to “plead the fifth” when asked about his 2025 season. Past that, Hamlin went into the creation of 23XI Racing amidst the COVID-19 shutdown. This included pitching the business plan to Michael Jordan. Hamlin explained they bought their first charter for $4.7 million, with 40% of that coming from himself. Their subsequent charters were purchased for a respective $13.5 million and $28 million. Hamlin explained that this sudden team expansion was a more efficient use of resources. This growth also helped propel 23XI into weekly contender status.
Hamlin also went in-depth on how 23XI performs at such a high level despite only having 140 employees. He explained their technical alliance with Joe Gibbs Racing, focused on data and racecar construction, is a better business model that cuts down on 120 employees. Hamlin said his business partners challenged him to run 23XI as lean as possible, “especially personnel-wise.”
Hamlin then went into details on why he chose to build the $35 million AirSpeed campus as 23XI’s operations center. “It was a differentiator in addition to Michael Jordan for sponsors, a strategic advantage. I wanted to make the best work environment possible.” This claim was backed up by a recent Sports Business Journal report labeling 23XI Racing as a top-three sports organization to work for.
As mentioned previously by Kessler, Hamlin said it costs on average $20 million per season to field a competitive Cup car. This bare costs figure comes before any driver salary, marketing, or other financial factors. Hamlin referenced 2025’s inaugural race in Mexico City as a tremendous burden on his team, needing to have cars ready in advance and paying out significant overtime: “International racing panics me.”
Hamlin lastly reiterated that teams want a voice in the sport’s governance, as well as changes in racing schedule, cars, or rules. “Costs aren’t covered to run [NASCAR’s] show.” 23XI was a profitable venture in every year of their existence until 2024. Their first year (2021) saw the then single-car team operate on $18 million in sponsorship, but only yield $400,000 in profit. The timespan 2022-24 saw the Toyota team have $40 million in sponsorship.
Day one of the trial ended at that point, letting out just prior to 5 p.m. Monday evening. At the time of this writing, arguments remain ongoing in the Federal Courthouse and are expected to continue through next week. Both sides have already seen emotions and intensity only ratchet up behind their proceedings. In short, the gloves are now off and may be for the next two weeks. Stay tuned for updates regarding this mammoth lawsuit and its potential fallout.
Written by Peter Stratta
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Photo Credits to Peter Stratta/TSJSports
