Two NASCAR teams, including one owned by Michael Jordan, have filed a federal antitrust lawsuit against the stock car series and chairman Jim France. The lawsuit alleges that the new charter system restricts competition by unfairly binding teams to the series, its tracks, and its suppliers.
The lawsuit was filed in the Western District of North Carolina in Charlotte by 23XI Racing and Front Row Motorsports after two years of negotiations between NASCAR and the 15 charter-holding organizations in the Cup Series.
The teams claim that NASCAR and the France family are monopolistic bullies and are seeking details related to their exclusionary practices and intent to insulate themselves from competition.
What is a Charter?
The charter system, introduced in 2016, includes revenue sharing and guarantees 36 entries in every Cup Series race. The lawsuit states that only eight of the original 19 team owners granted charters in 2016 remain in the sport.
Teams argue that the revenue sharing is unfair and demand a larger share of the pot. The original charters were set to expire at the end of 2024.
What Do the Teams Want?
During negotiations, the teams asked for more revenue, a voice in governance and rule-making, and a cut from deals NASCAR earns off the names, images, and likenesses of participants. They also wanted the charters to be permanent, a request that NASCAR refused.
What Does the Lawsuit Claim?
The lawsuit alleges that NASCAR violated the Sherman Antitrust Act by preventing any stock car racing team from competing on the circuit without accepting the anticompetitive terms it imposes. Teams describe feeling coerced and under duress to sign the charter agreement.
How Did It Get Here?
NASCAR, founded in 1948, operated under year-to-year contracts until 2016, providing no long-term viability to teams. The lawsuit argues that the previous model made sustainability nearly impossible for racing teams, leading to financial vulnerability and the closure of successful organizations.
The lawsuit seeks to challenge the current charter system and create a more competitive and fair environment for teams, drivers, sponsors, and fans in NASCAR.
