Michael Jordan’s 23XI Racing and a 2nd team sue NASCAR
Teams Claim NASCAR’s Charter System Limits Competition
CHARLOTTE, N.C. — Two NASCAR teams — one of them owned by Michael Jordan — filed a federal antitrust lawsuit against the stock car series and chairman Jim France on Wednesday, claiming the new charter system limits competition by unfairly binding teams to the series, its tracks and its suppliers.
23XI Racing and Front Row Motorsports filed suit in the Western District of North Carolina in Charlotte after two years of contentious negotiations between the privately owned National Association for Stock Car Auto Racing and the 15 charter-holding organizations in the series’ top Cup Series.
What is a charter?
The charter system introduced in 2016 included revenue sharing and other elements of the business for the top motorsports series in the United States while guaranteeing 36 entries in every lucrative Cup Series race. Of the 19 team owners who were originally granted charters in 2016, the lawsuit says, only eight remain in the sport.
What do the teams want?
During negotiations, the teams asked for more revenue, a voice in governance and rule-making, and a cut from deals NASCAR earns off the names, images and likenesses of the participants.
What does the lawsuit claim?
The suit argues NASCAR violated the Sherman Antitrust Act by preventing any stock car racing team from competing on the circuit “without accepting the anticompetitive terms” it imposes.
How did it get here?
NASCAR was founded in 1948 by the late Bill France Sr., and has since been run first by his son, Bill Jr., then his grandson, Brian France, and now France Sr.’s second son, Jim.
NASCAR’s Response
A NASCAR spokesman said the series does not comment on pending litigation.
Conclusion
The lawsuit filed by 23XI Racing and Front Row Motorsports aims to bring an end to what they consider an unfair and anticompetitive charter system that limits the ability of teams to compete and succeed. The teams are seeking damages and a more equitable distribution of revenue in the series.
FAQs
Q: What is the charter system in NASCAR?
A: The charter system is a revenue sharing model introduced in 2016 that guarantees 36 entries in every lucrative Cup Series race.
Q: Why did the teams refuse to sign the charter agreement?
A: The teams claimed that the agreement was unfair and anticompetitive, and that it would limit their ability to compete and succeed in the series.
Q: What is the outcome of the lawsuit?
A: The outcome of the lawsuit is uncertain, but the teams are seeking damages and a more equitable distribution of revenue in the series.
Q: Will this affect the racing season?
A: It is unclear at this time how the lawsuit will affect the upcoming racing season. The teams will continue to race until the lawsuit is resolved or a settlement is reached.
