CHARLOTTE, N.C. — 23XI Racing co-owners Michael Jordan and Denny Hamlin kicked off NASCAR Championship Week by facing the sanctioning body in federal court.
23XI, which along with Front Row Motorsports is suing NASCAR and its CEO Jim France for antitrust violations, faced NASCAR in court for the first time during Monday's preliminary injunction hearing.
On the fifth floor of the federal courthouse in Charlotte, team attorney Jeffrey Kessler sparred with NASCAR attorney Chris Yates in a lively and sometimes contentious hearing. At issue is a clause in NASCAR's 2025 charter agreement with the team that does not allow for lawsuits. 23XI and FRM asked Judge Frank Whitney to waive that clause and allow them to sign a contract that would allow them to continue racing as a charter or non-charter “open” team.
“We literally cannot practice our profession at all unless we sign this release,” Kessler said.
23XI Racing co-owners Michael Jordan, Denny Hamlin and Curtis Polk, as well as Front Row Motorsports' Bob Jenkins and Jerry Freese, entered federal court today for an injunction hearing. pic.twitter.com/hXNJaecFFW
— Jordan Bianchi (@Jordan_Bianchi) November 4, 2024
The team hopes Whitney will waive this clause and reinstate the original charter offer that NASCAR proposed on Sept. 6 and was signed by 13 owners. Kessler said DocuSign originally had a Nov. 5 deadline, but NASCAR rescinded that deadline.
Yates said NASCAR will no longer sign a charter agreement with the team after the team publicly disparaged the organization.
“They're calling us name after name that undermines the brand and goodwill of NASCAR,” Yates said. “NASCAR only wants to enter into charter agreements with teams who want to work together to grow our sport.”
Yates added that the teams made a “frontal assault on the charter system,” including that apart from the 26 Cup Series venues, there are 128 other tracks available in the United States where stock cars can race. He argued that NASCAR is not a monopoly for several reasons. .
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He also noted that, keeping in mind that Jordan was once the owner of the Charlotte Hornets, owners are not interested in doing anything else with their business besides running a NASCAR team, such as “buying another NBA team.” He also said that people can choose to do so. But Kessler said the suggestion that 23XI and FRM suddenly change their business model and potentially turn it into yet another racing series is like asking a football player to become a baseball player.
Jordan spent much of Yates' argument leaning forward eagerly from his seat in the front row of the courtroom, sometimes grinning, sometimes clutching his chin.
Michael Jordan said after the hearing: pic.twitter.com/2L4MQFmsxj
— Jeff Gluck (@jeff_gluck) November 4, 2024
Yates said race teams would receive about half of all TV revenue under the 2025 charter agreement, and the worst-performing charter teams would receive a 50% increase in pay than under their current contract.
He said NASCAR is contractually obligated to notify teams of funding for next season by November 1st, so NASCAR will reduce the number of charters to 32 and re-offer the existing four total charters of 23XI and FRM. He said he has no plans to do so. Charters guarantee participation in each Cup Series race and provide a higher share of race prize money. Yates argued that the teams are asking the judge to force NASCAR into a seven- to 14-year contract by rewriting the contract “with the terms they want.”
“They're trying to force NASCAR into a charter relationship that they don't want,” he said.
Kessler denied this, saying the teams only hope the judge waives the time clause in the case, adding, “We hope it doesn't take 14 years.”
Yates also said that many team owners, like Roger Penske, Rick Hendrick and Pro Football Hall of Fame coach Joe Gibbs, were forced to sign new contracts on September 6th. The team said that the team's claim that it had done so was false. I was pushed around. He also said that Hendrick and owner Justin Marks said they were satisfied with the terms of the new charterparty.
At one point, Kessler loudly claimed that Yates was “fabricating facts” and “misrepresenting” the team's case to mislead the judge. Kessler rephrased the team's requirements “in a way that[Yates]could understand.”
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Yates responded: “We disagree with almost all of his arguments.”
Kessler also revealed that 23XI's driver contract with Tyler Reddick allows the driver to leave as a free agent if 23XI does not have a charter in place with a team sponsor.
Reddick will be one of four drivers competing for the NASCAR Cup Series championship on Sunday at Phoenix Raceway. Prior to the hearing, Whitney told those in the room that he had not seen the courtroom this crowded in “years” and added, “There were two law firms right in front of me. “I feel like it's full,” he added.
Mr. Whitney was initially skeptical of Mr. Kessler's claims and more open to Mr. Yates's claims, but Mr. Kessler's rebuttals made the two sides even.
The judge praised both lawyers' “extraordinary” and “very good arguments” and said he would issue a written decision by Friday.
Afterwards, both sides seemed satisfied. NASCAR had no comment, but France turned and winked at senior advisor Mike Helton, who was in the row behind him.
Jordan then told reporters outside the courtroom that Kessler “did an incredible job today.”
“I put all my cards on the table,” Jordan said. “I think we did a good job with that. But we're looking forward to winning the championship this weekend.”
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(Photo: Sean Gardner/Getty Images)
