Federal Judge Denies Motion to Recognize Michael Jordan’s NASCAR Teams as Chartered Organization
Judge Rules Against 23XI Racing and Front Row Motorsports in Antitrust Lawsuit
A federal judge has denied a motion by two NASCAR teams, including one owned by NBA Hall of Famer Michael Jordan, to be recognized as chartered teams as they proceed in an antitrust lawsuit against the stock car series and chairman Jim France.
Motion Denied
The motion was signed by federal judge Frank Whitney of the United States District Court of Western North Carolina in Charlotte at the exact same time NASCAR executives were giving their annual “State of the Sport” address at Phoenix Raceway.
NASCAR President’s Comments
NASCAR President Steve Phelps opened the address by noting that series officials have not discussed negotiations over charters in the more than two-year process and would not start now.
Charter Extension
Phelps said, “I know people are frustrated about that. We are not going to negotiate in the media about charters, ever. And we are very happy that 32 of the 36 charters were extended because those were race teams that where the deal that was put on the table for them, the primary big win for the race teams was money.”
Court Decision
The court decision came down just hours before Cup cars hit the track for the first practice session of championship weekend. Tyler Reddick, who drives for the Jordan-owned 23XI Racing, is one of four drivers who is in Sunday’s winner-take-all finale at Phoenix.
Timing of the Ruling
When the ruling came out and NASCAR was informed as executives sat on the stage at Phoenix Raceway, NASCAR chief operating officer Steve O’Donnell quipped: “You can’t make it up, for the timing” as he and Phelps declined comment on the injunction.
Appeal Possible
Jeffrey Kessler, the top antitrust lawyer in the country, indicated after Monday’s hearing in Charlotte that the plaintiffs can immediately appeal the ruling.
Background
At issue is that both 23XI and Front Row Motorsports refused to sign a take-it-or-leave-it charter agreement presented to teams by NASCAR in September, just 48 hours before the playoffs began. The offers came after more than two years of negotiations between NASCAR and its teams, and 13 of 15 organizations signed the deal.
Judge’s Ruling
In his ruling, the judge found that Kessler failed to demonstrate that 23XI and Front Row “will face irreparable harm through several avenues.” Kessler had argued the plaintiffs asserted they will “risk” losing sponsors while competing as open teams because the sponsors “could abandon (them) if they… do not qualify for all of their races.”
Conclusion
The judge’s ruling means that 23XI Racing and Front Row Motorsports will not be recognized as chartered teams, and will have to operate as open teams without the protections and benefits that come with being a chartered team. The teams have the option to appeal the ruling, but for now, they will have to operate under the current rules.
FAQs
Q: What is the significance of the charter agreement?
A: The charter agreement is a revenue-sharing agreement between NASCAR and its teams, which determines how teams are funded and how revenue is distributed.
Q: Why did 23XI and Front Row Motorsports refuse to sign the charter agreement?
A: The teams refused to sign the agreement because they felt it was unfair and did not provide them with a fair share of revenue.
Q: What are the implications of the judge’s ruling?
A: The judge’s ruling means that 23XI Racing and Front Row Motorsports will not be recognized as chartered teams, and will have to operate as open teams without the protections and benefits that come with being a chartered team.
Q: Can the teams appeal the ruling?
A: Yes, the teams have the option to appeal the ruling.
