In the latest development surrounding the ongoing legal saga between 23XI Racing, Front Row Motorsports and NASCAR, the sanctioning body has decided to file its own countersuit against the teams.
NASCAR's explanation of why it filed this new lawsuit states that 23XI/FRM "not only participated in the collusive conduct, but on information and belief, orchestrated it," and that they were the ones who violated the Sherman Antitrust Act (not NASCAR).
They claim 23XI and FRM worked to "threaten, coerce, and extort NASCAR into meeting their demands" after refusing to agree to the terms of the new agreement. NASCAR also questions how the Charter system can continue after the original lawsuit is finished. "By claiming the Charters are illegal agreements, Plaintiffs have opened Pandora’s box ... If the Charters are deemed to be anticompetitive, then either Charters will go away entirely or the cross exclusivities that benefitted both parties will be eliminated."
And while the original lawsuit states that NASCAR violated antitrust laws, NASCAR claims the same of the teams in this new countersuit. "This is not the first time that 23XI and FRM have sought to impose their viewpoints, and those of their counsel, on the racing teams writ large. And it is truly ironic that in trying to blowup the Charter system, 23XI and FRM have sought to weaponize the antitrust laws to achieve their goals."
An illegal conspiracy to pressure NASCAR
Specifically, NASCAR takes aim at 23XI co-owner (and Michael Jordan's longtime agent/business partner) Curtis Polk, saying he himself took part in anticompetitive behavior. They use aggressive language, claiming that he was determined to change the economic landscape of the sport in a way that benefitted the teams financially and harmed NASCAR. Among his alleged actions, NASCAR says Polk tried to organize a boycott of NASCAR events, engaged in negative media campaigns, and even tried to directly interfere with NASCAR's multibillion-dollar negotiations with TV partners ahead of its latest media rights deal.
They also say Polk threatened and coerced other teams to "not break ranks" as discussions were ongoing and failed to "accurately convey" NASCAR's position to the other teams. Polk, who headed the Teams Negotiating Committee, was at the forefront of these negotiations. NASCAR claims they were forced to "negotiate with the teams individually because it appeared that the TNC and Polk were not providing all of NASCAR’s offers to all teams/team owners."
Throughout the 30-page document, NASCAR spends a lot of time discussing the history of the sport and the France family, writing it in a fashion to combat the narrative that they are an illegal monopoly. They also fixate on the financial burden they take on in running the sport and operating events, continuously touching on how they have increased the amount of money the teams are earning in the new Charter agreement. The document pushed back against the idea that teams have never generated a profit by citing how both 23XI and FRM have expanded their operations ahead of the 2025 season.
According to NASCAR, the end goal for these teams was to achieve permanent Charters, aiming to get more money out of the sanctioning body by using methods that ultimately violate antitrust laws. They cite Dale Earnhardt Jr., who has openly expressed a desire to run a Cup team in the past. The sanctioning body says he was told by the Race Team Alliance that the new Charter agreement was a 'losing proposition' and 'broken,' thus deterring him. NASCAR says this was a false representation and part of the anticompetitive schemes cited throughout the document.
"NASCAR was harmed as a result of the collusive, threatening and damaging behavior of Counterclaim Defendants," read the filing. "These activities resulted in reputational and brand damage at a time when NASCAR was attempting to renew its most important revenue stream, its media rights."
The end of the Charter system?
NASCAR states that it was the teams who wanted a Charter system back in 2016 and that it provides little benefit to the sanctioning body, talking about its financial benefits and how the entire system could now end up being scrapped. In the filing, it reads: "Although NASCAR recognizes the value the Charter model has brought to Charter teams and is certainly willing to continue with the model on the terms mutually agreed to, NASCAR now finds itself in the ironic position of having to defend a model that NASCAR never asked for in the first place and which it would be content not to have."
A major sticking point with NASCAR is the fact that a December preliminary injunction allowed 23XI and FRM to compete with charters despite not agreeing to the 2025 Charter Agreement ... at least for the duration of the lawsuit. NASCAR points out how teams are free to compete as 'open' teams if they do not wish to agree to the terms of the Charter Agreement (which would mean taking a major financial hit and not being locked into races with larger fields like the Daytona 500).
According to NASCAR, the sanctioning body made many concessions after 'arm's length' negotiations, including increased payouts as examples of why they believe the new agreement to be fair. They hit back at the accusation that NASCAR gave teams sufficient time, stating that negotiations date back to 2022. But per previous filings from the teams, NASCAR issued them the final agreement on September 5th and demanded they sign by midnight that day.
In its conclusion, NASCAR officially accuses 23XI and FRM of engaging in a "conspiracy and agreement in unreasonable restraint of interstate trade and commerce" through the aforementioned mentioned tactics, thus violating the Sherman Antitrust Act. Again naming Polk directly, they say he "knowingly and actively orchestrated and participated in this illegal conspiracy, while working as a member of the TNC on behalf of the RTA and aiding 23XI’s and Front Row’s participation in the scheme."
23XI and FRM call counterclaim a "meritless distraction"
From team attorney Jeffrey Kessler: "Today’s counterclaim by NASCAR is a meritless distraction and a desperate attempt to shift attention away from its own unlawful, monopolistic actions.
"NASCAR agreed to the joint negotiations that they now attack. When those joint negotiations failed, they used individual negotiations to impose their charter terms, which most of the teams decided they had no choice but to accept.
"My clients' lawsuit has always been about transforming NASCAR into a more competitive and fair sport for the benefit of drivers, fans, sponsors and teams because of their love of the sport. Every major sport goes through a transition to competition when antitrust claims are asserted, and that moment has come for NASCAR.
"Today's baseless filing changes nothing. We are confident in the strength of our case and look forward to presenting it at trial."
