Why Michael Jordan’s 23XI Racing team is suing NASCAR

Yesterday, NASCAR and Michael Jordan began a heavyweight showdown in court that may shape motorsports in America for years to come. But why? 

NASCAR is the premier motorsport organization in the United States of America, and arguably the largest motorsport on the planet outside of Formula 1, but its dominance is being challenged, and not by a rival motorsport, but by one of the most influential athletes in the world, Michael Jordan. 

Jordan is a co-owner of 23XI Racing, a race team that competes in the NASCAR Cup series with drivers Darrell (Bubba) Wallace Jr. and Tyler Reddick. The team is co-owned by three-time Daytona 500 champion and 60-time race winner Denny Hamlin. Since 2024, while the team raced in the Cup Series, they have been preparing to battle NASCAR in court this week for acting as a monopoly.

According to previous reporting by FOX Sports motorsports insider Bob Pockrass, they argue that since NASCAR owns the series and the majority of the tracks while also requiring the teams to purchase parts and pieces for their cars from a NASCAR-approved supplier, as well as prohibiting teams and tracks from participating in other racing (primarily stock-car racing) series without NASCAR’s approval, that they violate antitrust law by controlling the market where premier stock-car racing teams can compete. 

All of this comes after a contentious argument in 2024 over the sport’s charter system. The charter system is a revenue-sharing model that is similar to a franchise in other professional sports.  

According to AP News reporter Jenna Fryer, although charters can be sold and leased, the charters have contractually binding terms, expiration dates and can be revoked by NASCAR. The teams fought with NASCAR throughout 2024, negotiating the latest agreement, with teams wanting full-time charters while NASCAR didn’t, alongside other stipulations. Ultimately, NASCAR gave teams an ultimatum to sign the last agreement by September 6, 2024 or risk losing their charter. 

While several teams disagreed with NASCAR’s ultimatum, the majority of the teams signed the agreement. The only two who did not were 23XI Racing and Front Row Motorsports, owned by Bob Jenkins. Pockrass reported that these teams viewed the new 2025 charter agreement as unfair when it comes to revenue distribution to the teams in combination with the restrictions. 

NASCAR co-defendant Jim France, the CEO who is part of NASCAR’s founding family, claims it has done nothing wrong and the teams’ dissatisfaction stems over a business dispute during negotiations for what is known as the franchise-like “charter system.” 

According to Jeff Gluck and Jordan Bianchi at The Athletic, the judge in the case, Kenneth D. Bell, has already ruled NASCAR has a monopoly over its market, which is defined as “premier” stock car racing. Now, in a trial that is expected to last more than two weeks, a six-person jury will decide whether NASCAR abused that power in a way that violated antitrust laws. 

Now there are a multitude of scenarios that can play out as this trial continues. Gluck and Bianchi noted that if the teams lose this case, they will likely go out of business as they will be operating as unchartered teams, which would significantly decrease how much money they can make. Charter teams get revenue guarantees, as well as assured starting spots in races, which open teams do not. The article notes that in a declaration, 23XI co-owner Curtis Polk estimated the organization would lose $24 million in revenue if the team’s cars did not have charters. 

If NASCAR loses, the sport of stock car racing and motor racing in the United States could fundamentally change. Bianchi and Gluck went on to write that Bell has already telegraphed that in order to provide a remedy for an antitrust violation, he could force NASCAR to sell its racetracks or dismantle the existing charter system.  

Currently, the trial is on its second day of arguments.