A three-judge federal appeals court has overturned a key ruling in the NASCAR antitrust case, dealing a significant blow to the race teams seeking to retain their status for this season.

Front Row Motorsports and 23XI Racing, the team co-owned by Michael Jordan and three-time Daytona 500 winner Denny Hamlin, had won a preliminary injunction from a U.S. District Court in December that allowed them to race as “charter” teams in 2025 without being subjected to a clause that prevented them from suing NASCAR.

But the U.S. Court of Appeals overturned that Thursday, ruling the lower court “abused its discretion” with the preliminary injunction, clearing the way for NASCAR to strip three charters from each of the two race teams. The charters are valued in the tens of millions of dollars.

Charters are franchise-like licenses that allow race teams to have guaranteed entries into NASCAR Cup Series races and earn the accompanying higher payouts. Without charters, 23XI and Front Row would have to race as “open” teams and risk failing to qualify for a race; open teams also get drastically less money from each race than charter teams.

“We are disappointed by today’s ruling by the Fourth Circuit Court of Appeals and are reviewing the decision to determine our next steps,” Jeffrey Kessler, attorney for 23XI and Front Row, said in a statement. “This ruling is based on a very narrow consideration of whether a release of claims in the charter agreements is anti-competitive and does not impact our chances of winning at trial scheduled for December 1. We remain confident in our case and committed to racing for the entirety of this season as we continue our fight to create a fair and just economic system for stock car racing that is free of anticompetitive, monopolistic conduct.”

The ruling follows a hearing last month in which the three judges expressed considerable skepticism over the grounds on which the preliminary injunction was granted, saying there was no similar precedent in more than 125 years of the Sherman Antitrust Act.

At issue was a release clause in NASCAR’s 2025 charter agreements the teams claimed would prevent them from bringing antitrust action against NASCAR if they signed it. The lower court agreed with the teams that the clause was a monopolistic practice and allowed them to sign a version of the charter agreement that removed the release clause while the lawsuit was pending this season.

But the appeals court disagreed, ruling there were no previous cases that said requiring a release constituted an antitrust violation.

“Because we have found no support for the proposition that a business entity or person violates the antitrust laws by requiring a prospective participant to give a release for past conduct as a condition for doing business, we cannot conclude that the plaintiffs made a clear showing that they were likely to succeed on the merits of that theory,” the court said. “And without satisfaction of the likelihood-of-success element, the plaintiffs were not entitled to a preliminary injunction.”

During the May hearing, judges had warned the teams their claim came across as “having your cake and eating it, too.” That’s because the teams were suing over monopolistic practices while also asking the court to force NASCAR to allow them to participate.

“If you don’t want the contract, you don’t enter into it and you sue,” Judge Paul Niemeyer said at the time. “Or if you want the contract, you enter into it, and you’ve given up past releases.”

It is not yet clear what will happen next in the immediate aftermath of Thursday’s ruling. If NASCAR chooses to follow through by stripping the charters, the teams would lose approximately a combined quarter billion dollars in charter values in addition to the lower race winnings they will now receive.

The teams can still appeal this ruling, so it would not go into effect immediately.

How devastating could this be to the teams?

Any team losing a charter is impactful considering the additional millions in lost revenue associated with owning a charter. Now, compound that by three — the number of charters each owned by 23XI Racing and Front Row Motorsports — and the magnitude of Thursday’s ruling really is driven home. Both teams stand to lose a considerable amount of money, potentially to such a degree that it raises questions about how each team will be able to effectively operate going forward.

Yes, both ownership groups have the financial means to withstand the short-term hit as their federal lawsuit against NASCAR plays out in the courts (the trial is set to begin Dec. 1). And the teams could still appeal and win, which would make all this null and void. As it stands, though, this appears to be a body blow that could stunt their respective competitiveness over the remainder of the 2025 season.

From a bigger perspective as it relates to the ongoing lawsuit, should the teams appeal and lose, one has to wonder if Thursday’s ruling influences 23XI and Front Row to reconsider pursuing their joint federal lawsuit. Or perhaps it emboldens them even more to continue forward, even in spite of the financial impact. — Jordan Bianchi, motorsports writer

(Photo: Meg Oliphant / Getty Images)

CHARLOTTE, N.C. (AP) — A three-judge federal appellate panel ruled Thursday in favor of NASCAR in the antitrust lawsuit filed by two teams, one owned by Michael Jordan, and vacated an injunction that required 23XI and Front Row be recognized as chartered teams as their case snakes through the legal system.

Both race teams sued NASCAR late last year after refusing to sign new agreements on charter renewals. The charter system is similar to franchises in other sports, but the charters are revocable by NASCAR and have expiration dates. 23XI, which is owned by Jordan and three-time Daytona 500 winner Denny Hamlin, allied with Front Row in suing NASCAR after 13 other organizations signed the renewals last September and those two organization refused.

“We are disappointed by today’s ruling by the Fourth Circuit Court of Appeals and are reviewing the decision to determine our next steps,” said Jeffery Kessler, attorney for 23XI and Front Row. “This ruling is based on a very narrow consideration of whether a release of claims in the charter agreements is anti-competitive and does not impact our chances of winning at trial scheduled for Dec. 1.

“We remain confident in our case and committed to racing for the entirety of this season as we continue our fight to create a fair and just economic system for stock car racing that is free of anticompetitive, monopolistic conduct.”

The two teams sued and asked for a temporary injunction that would recognize them as chartered teams for this season. The antitrust case isn’t scheduled to be heard until December.

The teams said they needed the injunction because the current charter agreement prohibits them from suing NASCAR. 23XI also argued it would be harmed because Tyler Reddick’s contract would have made him a free agent if the team could not guarantee him a charter-protected car.

The original judge ruled that NASCAR’s charter agreement likely violated antitrust law in granting the injunction. But when they heard arguments last month, the three judges at the the U.S. Court of Appeals for the Fourth Circuit in Richmond, Virginia, indicated they were skeptical of that decision.

The judges said in Thursday’s ruling they were not aware of any case that supports the lower court’s theory of antitrust law, so they vacated the injunction.

“In short, because we have found no support for the proposition that a business entity or person violates the antitrust laws by requiring a prospective participant to give a release for past conduct as a condition for doing business, we cannot conclude that the plaintiffs made a clear showing that they were likely to succeed on the merits of that theory,” the court said. “And without satisfaction of the likelihood-of-success element, the plaintiffs were not entitled to a preliminary injunction.”

The teams have 14 days to appeal to the full court. The injunction also has no bearings on the merits of the case, and the earliest NASCAR can treat the teams as unchartered — a charter guarantees their organizations a starting spot each week and prize money — is one week after the deadline to appeal, provided there is no pending appeal.

NASCAR has not said what it would do with the six charters held by the two organizations if they are returned to the sanctioning body. There are only 36 chartered cars for a 40-car field. If the teams do not appeal, the six entries would have to compete as “open” cars — which means they’d have to qualify on speed each week to make the race and they would receive a fraction of the money.

It’s not clear what would happen to Reddick’s contract. He goes to Michigan this weekend ranked sixth in the Cup Series standings. Both organizations are still seeking a win this season — Hamlin’s three victories are with Joe Gibbs Racing, the team he drives for.

Reddick is last year’s regular-season champion and competed for the Cup title last November.

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AP auto racing: https://apnews.com/hub/auto-racing

Jenna Fryer, The Associated Press

With Ryan Blaney’s victory last week at Nashville, Team Penske became the first team to land all drivers – including their partner team Wood Brothers Racing – into the 2024 NASCAR Cup Series Playoffs.

But it’s Hendrick Motorsports that remains atop the championship standings heading into Sunday’s Firekeepers Casino 400 at Michigan International Speedway (2 p.m. ET on Amazon Prime, MRN, SiriusXM NASCAR Radio) – and one of the former series champs in the four-driver Hendrick lineup is hoping to finally secure his place in the upcoming Playoffs with a win.

Chase Elliott, the 2020 NASAR Cup Series champion, had a tremendously good start to his career on the two-mile Michigan high-banks scoring runner-up finishes in the first three races he ran there (2016-18). And surprisingly considering that start, the driver of the No. 9 Hendrick Motorsports Chevrolet has never won at the track. He finds himself, however, primed for a trophy-hoist this weekend.

Elliott is the highest ranked driver without a victory this season – fifth in the championship standings with top-10 finishes in half the races (seven). At Michigan International Speedway, he earned an amazing 10 top-10 finishes in his first 11 starts. But he hasn’t had any in the three races afterward – his worst showing 36th in 2023 was a result of being collected in a crash only 34 laps into the race.

Mention Michigan to Elliott and his face lights up. It’s absolutely a track where he feels legitimately optimistic to score that first victory of 2025. He is the only driver to finish among the top-20 in all 14 races this season and has the third best average finish (11.5) in the series.

“It’s always good to go to Michigan and have a good run,” Elliott said. “It’s certainly changed a lot over the years, just with how the cars have changed. But the race track itself is the most consistent place I’ve ever seen for a racetrack that has those hard winters.”

Elliott’s teammate, the driver of the No. 24 Hendrick Motorsports Chevrolet, William Byron remains atop the championship standings, extending his lead over teammate Kyle Larson to 48 points. Hendrick Motorsports is the only team to have at least one of their four cars finish in the top-five in all 14 races this year.

Larson is tied with Team Penske’s Joey Logano for most wins (three) at Michigan among active drivers, but his last was in 2017.

The last four Michigan races have been won by different drivers – three of them in Fords (Chris Buescher, Kevin Harvick and Blaney). The exception is defending race winner, 23XI Racing’s Tyler Reddick in a Toyota. He too is looking for his first victory of the year, after claiming the 2024 regular season title.

To that point, the intensity is certainly picking up now that the regular season is more than half-way over. Richard Childress Racing’s Kyle Busch – the 2011 Michigan winner – sits on the Playoff cutoff line in 16th place with five drivers within 13 points of him heading into the weekend.

Interesting to note, no Michigan native has ever won at his “home track.” RFK Racing owner/driver Brad Keselowski has three runner-up finishes. Legacy Motor Club’s Erik Jones, who earned his second top-10 of the season last week, has claimed top-10 finishes at Michigan in two of the last three races.

Spire Motorsports’ Carson Hocevar is coming off his second runner-up finish this year – tying a career best. He led three laps and finished 10th in his Michigan NASCAR Cup Series debut last year.

The top-32 drivers in the standings have qualified for the inaugural “In-Season Challenge” program and the next three races – at Michigan, Mexico City and Pocono – will seed the brackets. The first of five races for the In-Season Challenge is June 28 at Atlanta’s newly renamed, EchoPark Speedway.

Practice followed by Busch Light Pole Qualifying gets underway at 9:30 a.m. ET on Saturday (Amazon Prime, MRN, SiriusXM NASCAR Radio).

A three-judge federal appellate panel ruled Thursday in favor of NASCAR in the antitrust lawsuit filed by two teams, one owned by Michael Jordan, and vacated an injunction that required 23XI Racing and Front Row Motorsports to be recognized as chartered teams as their case snakes through the legal system.

Both race teams sued NASCAR late last year after refusing to sign new agreements on charter renewals. The charter system is similar to franchises in other sports, but the charters are revocable by NASCAR and have expiration dates. 23XI, which is owned by Jordan and three-time Daytona 500 winner Denny Hamlin, allied with Front Row in suing NASCAR after 13 other organizations signed the renewals last September and those two organization refused.

“We are disappointed by today’s ruling by the Fourth Circuit Court of Appeals and are reviewing the decision to determine our next steps,” said Jeffery Kessler, attorney for 23XI and Front Row. “This ruling is based on a very narrow consideration of whether a release of claims in the charter agreements is anti-competitive and does not impact our chances of winning at trial scheduled for Dec. 1.

“We remain confident in our case and committed to racing for the entirety of this season as we continue our fight to create a fair and just economic system for stock car racing that is free of anticompetitive, monopolistic conduct.”

The two teams sued and asked for a temporary injunction that would recognize them as chartered teams for this season. The antitrust case isn’t scheduled to be heard until December.

The teams said they needed the injunction because the current charter agreement prohibits them from suing NASCAR. 23XI also argued it would be harmed because Tyler Reddick’s contract would have made him a free agent if the team could not guarantee him a charter-protected car.

The original judge ruled that NASCAR’s charter agreement likely violated antitrust law in granting the injunction. But when they heard arguments last month, the three judges at the the U.S. Court of Appeals for the Fourth Circuit in Richmond, Virginia, indicated they were skeptical of that decision.

The judges said in Thursday’s ruling they were not aware of any case that supports the lower court’s theory of antitrust law, so they vacated the injunction.

“In short, because we have found no support for the proposition that a business entity or person violates the antitrust laws by requiring a prospective participant to give a release for past conduct as a condition for doing business, we cannot conclude that the plaintiffs made a clear showing that they were likely to succeed on the merits of that theory,” the court said. “And without satisfaction of the likelihood-of-success element, the plaintiffs were not entitled to a preliminary injunction.”

The teams have 14 days to appeal to the full court. The injunction also has no bearings on the merits of the case, and the earliest NASCAR can treat the teams as unchartered — a charter guarantees their organizations a starting spot each week and prize money — is one week after the deadline to appeal, provided there is no pending appeal.

NASCAR has not said what it would do with the six charters held by the two organizations if they are returned to the sanctioning body. There are only 36 chartered cars for a 40-car field. If the teams do not appeal, the six entries would have to compete as “open” cars — which means they’d have to qualify on speed each week to make the race and they would receive a fraction of the money.

It’s not clear what would happen to Reddick’s contract. He goes to Michigan this weekend ranked sixth in the Cup Series standings. Both organizations are still seeking a win this season — Hamlin’s three victories are with Joe Gibbs Racing, the team he drives for.

Reddick is last year’s regular-season champion and competed for the Cup title last November.

Darrell “Bubba” Wallace is one of the most recognized names in NASCAR. Here’s what you need to know.

A three-judge panel from the Fourth Circuit Court of Appeals unanimously vacated a preliminary injection order Thursday that had allowed 23XI Racing and Front Row Motorsports to compete as chartered teams — and receive the financial benefits as a chartered team.

“We are disappointed by today’s ruling by the Fourth Circuit Court of Appeals and are reviewing the decision to determine our next steps,” said Jeffrey Kessler, attorney for 23XI Racing and Front Row Motorsports. “This ruling is based on a very narrow consideration of whether a release of claims in the charter agreements is anti-competitive and does not impact our chances of winning at trial scheduled for December 1.

“We remain confident in our case and committed to racing for the entirety of this season as we continue our fight to create a fair and just economic system for stock car racing that is free of anticompetitive, monopolistic conduct.”

The 2-mile oval in Brooklyn, Michigan, returns to June for its annual event weekend.

There will be no impact to the teams this weekend at Michigan International Speedway. 23XI Racing, co-owned by Michael Jordan and Denny Hamlin, and Front Row Motorsports, owned by Bob Jenkins, may file a petition for rehearing before the entire Fourth Circuit Court of Appeals within 14 calendar days. That would be June 19.

Thursday’s decision by the three judges does not go into effect until seven days after the expiration of time period for 23XI Racing and Front Row Motorsports to file a petition for rehearing. That would be June 26.

This matter is only a part of the lawsuit 23XI Racing and Front Row Motorsports filed against NASCAR last year. The case is still scheduled to go to trial in December.

The teams sought the injunction last year, stating that a clause in the charter agreement prohibited teams from suing NASCAR. The teams stated that if they did not run as chartered teams they faced the possiblity of losing sponsors and drivers.

A U.S. District Court Judge Kenneth D. Bell granted the preliminary injunction on Dec. 18, stating in his opinion that “NASCAR fans (and members of the public who may become fans) have an interest in watching all the teams compete with their best drivers and most competitive teams.”

The three-judge federal appellate panel gave an indication that Thursday’s decision was likely during a May 9 hearing. One of the judges stated in the hearing: “If you don’t want the contract, you don’t enter into it and you sue. Of if you want the contract, you enter into it and you’ve given up past releases. But … you can’t have your cake and eat it too.”

The NASCAR Cup Series heads to one of its fastest tracks this weekend with a trip to Michigan International Speedway.

The panel stated its opinion Thursday.

“In entering a preliminary injunction in this case, the district court held that the plaintiffs were likely to succeed on the merits of their antitrust action against the National Association for Stock Car Auto Racing, LLC (NASCAR), and its CEO, James France, because NASCAR, as an alleged monopolist, required the plaintiffs, as a condition of doing business with them, to enter into a release for past conduct.

“Because that theory of antitrust law is not supported by any case of which we are aware, we conclude that it was not a likely basis for success on the merits and vacate the injunction.”

The three-judge panel also stated in its opinion:

“While the plaintiffs’ complaint (by 23XI Racing and Front Row Motorsports) alleged years of conduct and contract provisions that they claimed were anticompetitive, thus attacking NASCAR’s entire business model, they requested at the same time that the district court order that they “be permitted to participate in NASCAR Cup Series events under the terms of the 2025 Charter Agreement (with the exception of the Release).” The plaintiffs therefore requested to participate in the very business that they sought to dismantle. The district court accommodated the plaintiffs’ request, explaining that, while the plaintiffs alleged broader monopolistic conduct, it was relying on only one basis to grant the preliminary injunction.

“It stated, “Plaintiffs have a likelihood of success on their allegation that the Release is unlawful. The Court emphasizes that it does not reach and expresses no opinion as to Plaintiffs’ likelihood of success on their other Sherman Act claims . . . .”

23XI Racing has three Cup teams with drivers Tyler Reddick, Bubba Wallace and Riley Herbst. Corey Heim is a development driver for the team and has run select races for the organization.

Front Row Motorsports has three Cup teams with drivers Todd Gilliland, Zane Smith and Noah Gragson.

The U.S. Court of Appeals for the Fourth Circuit in North Carolina ruled against the preliminary injunction granting 23XI Racing and Front Row Motorsports (FRM) the right to operate as chartered entities on Thursday morning, leaving the organizations on uncertain footing heading into NASCAR’s summer stretch.

After electing not to sign new Cup Series charter agreements for 2025 in September, 23XI and FRM filed a lawsuit in federal court in Charlotte on Oct. 2, 2024, claiming that its actions over the process violated antitrust laws. The teams requested a preliminary injunction with the district court to allow them to participant under the terms of the Charter Agreement for 2025, excising the release forbidding them to sue the sanctioning body. It initially failed but was ultimately approved by Judge Kenneth D. Bell in December.

Judges Paul V. Neimeyer, Steven Agee and Stephanie D. Thacker presided over the appeal. In the opinion accompanying Thursday’s ruling, Niemeyer said the injunction granted had no legal basis.

“In short, because we have found no support for the proposition that a business entity or person violates the antitrust laws by requiring a prospective participant to give a release for past conduct as a condition for doing business, we cannot conclude that the plaintiffs made a clear showing that they were likely to succeed on the merits of that theory,” Niemeyer wrote. “And without satisfaction of the likelihood-of-success element, the plaintiffs were not entitled to a preliminary injunction.”

In the time since the Judge Bell’s decision, both companies have operated as chartered teams, fielding three full-time cars apiece after acquiring an additional charter each from the now-defunct Stewart-Haas Racing. NASCAR filed its appeal brief on Feb. 12, FRM and 23XI filed their response on March 14 and the appeal was heard on May 9 by a three-judge panel in Richmond, Va.

With Thursday’s ruling, the teams could now lose both their pre-existing four charters and the two they acquired from SHR, requiring them to race as open teams through the remainder of the court process. FRM and 23XI will get 14 days to petition for a rehearing, with the mandate enforcing the judgment coming seven days after that deadline passes. If that were all to pass, FRM and 23XI could be forced to operate as open entries in three weeks, starting with the race weekend at Atlanta’s EchoPark Speedway.

It’s unlikely that losing the charters would keep any of the teams’ six entrants from making the Cup Series field for any races moving forward in 2025, given that most races outside of the Daytona 500 fail to see more than 40 entrants. But the decision would be a substantial financial blow to both programs, costing them the larger share of purse and point fund money offered to chartered teams.

Bubba Wallace, Tyler Reddick and Riley Herbst currently compete for 23XI, while FRM fields Noah Gragson, Todd Gilliland and Zane Smith. Herbst and Smith both arrived with team expansions after the addition of third charters from SHR. It’s uncertain what would happen with those charters moving forward, though NASCAR could presumably take over their ownership.

“We are disappointed by today’s ruling by the Fourth Circuit Court of Appeals and are reviewing the decision to determine our next steps,” attorney Jeffrey Kessler said in a statement on behalf of 23XI and FRM. “This ruling is based on a very narrow consideration of whether a release of claims in the charter agreements is anti-competitive and does not impact our chances of winning at trial scheduled for December 1.

“We remain confident in our case and committed to racing for the entirety of this season as we continue our fight to create a fair and just economic system for stock car racing that is free of anticompetitive, monopolistic conduct.”