“The France family and NASCAR are monopolistic bullies. And bullies will continue to impose their will to hurt others until their targets stand up and refuse to be victims. That moment has arrived.”
That punchy language appears in the 24th paragraph of this antitrust lawsuit that has — for the moment — completely overshadowed the 2024 playoffs. It was filed in the U.S. District Court for the Western District of North Carolina on Wednesday morning. 23XI Racing and Front Row Motorsports, the only two teams who refused to sign the new Charter Agreement, are suing NASCAR and CEO Jim France, focusing on the sanctioning body’s monopolization of the sport. The France family has run NASCAR since its founding in 1948 and has never ceded control of it.
The two teams have brought in attorney Jeffrey L. Kessler, a prominent sports lawyer who has won several antitrust lawsuits, notably in ‘McNeil v. The NFL’ where he helped to establish unrestricted free agency in the sport. His credentials precede him and show just how serious these teams are as they take NASCAR to court. Danielle T. Williams, Jeanifer Parsigian, Michael Toomey, and Matthew DalSanto were also listed as counsel. Winston & Strawn LLP is the law firm representing the race teams.
How did we get here?
The NASCAR charter system was introduced in 2016 and was later extended another four years in 2020. Now, with the prospect of a new deal looming, there was extensive back-and-forth between the teams and the sport’s leadership. On September 6, those negotiations came to an abrupt end when NASCAR sent what the lawsuit describes as a “take-it-or-leave-it” version of the 2025 agreement, giving teams until midnight to sign it or risk losing their charters. 13 of the 15 teams agreed but as we all know by now, two did not.
After 23XI Racing Tyler Reddick won the regular season title at Darlington, NASCAR executives were not there to present the trophy. "You know, certainly, pretty disappointed to not see anyone from NASCAR present Tyler his trophy," said 23XI co-owner Denny Hamlin then. "That was a little disappointing.” They did acknowledge Reddick's accomplishment the following weekend at the Atlanta driver's meeting.
Allegations against NASCAR
The main point of the 43 page filing centers around NASCAR’s monopolization of the sport and their aggressive tactics in maintaining complete control. The lawsuit alleges that the France family “operates NASCAR like a closed-door shop, wheeling and dealing its monopoly in smoke-filled back rooms.”
It cites NASCAR’s “anti-competitive restrictions” within the Charter Agreement, which — among other things — prevents teams from competing elsewhere unless authorized by NASCAR. It talks about these practices in length, but this is perhaps the most important line about it: “Because the owners of the 2016 NASCAR Charter Agreements were independent contractors — not the members of a joint venture operating a sports league — they were the most likely to form a computing circuit to NASCAR. By prohibiting them from competition in any other stock car races during the existence of the 2016 Charter Agreement, NASCAR further created a barrier to competitive entry which preserved its monopoly position and helps to do so through this day.” Therefore, NASCAR holds all the cards because the teams have no other option.
Consolidating power
The lawsuit further goes into detail regarding the many methods by which NASCAR maintains complete control over the stock car racing world. It even cites the early days of the sport and Bill France Sr.’s audacious union-busting tactics, but also provides more recent examples. It also brings up NASCAR’s $2 billion purchase of International Speedway Corp. (ISC) and its 12 race tracks, as well as acquiring ARCA — the only other national-level stock car racing league in the country. It goes on to claim that NASCAR “forces exclusive terms on race tracks as a condition of hosting a Cup Series race.”
It cites the introduction of the Next Gen car as another way NASCAR maintained an iron grip on the sport, calling it an “exclusionary requirement which locks premier stock car racing teams even further into NASCAR.” The conclusion being that the sanctioning body now has even more control as teams no longer build their own car, reliant on the standardized parts and chassis provided by NASCAR and its chosen vendors.
Speaking on the charter talks, it states that NASCAR tried to isolate owners with individual discussions and resisted nearly all efforts by the race teams to negotiate better terms. It goes on to say that the threat of eliminating charters altogether was “frightening to most of the race teams,” noting how economically devastating it would be to try to compete without one. And this is just scratching the surface as the lawsuit spends the majority of its pages explaining why it believes NASCAR to be an unlawful monopoly.
The legal basis for the case
Its main argument centers around the Sherman Antitrust Act of 1890, which in essence ensures the rule of free competition among those engaged in commerce while also prohibiting unfair monopolies.
The lawsuit claims NASCAR violated Section 1 of the Sherman act, relating to “contract, combination, or conspiracy by Defendant in unreasonable restraint of competition.” It also accused NASCAR of being in violation of Section 2 of the Sherman Act, which relates to monopolization.
What the teams want
The lawsuit intends for the courts to find NASCAR in violation of the aforementioned Sherman Act while also requesting that 23XI and FRM’s preliminary injunction be granted, which would allow them to continue to compete as chartered teams in 2025 while still proceeding with the lawsuit and “without being subject to any claimed release of antitrust claims.” Essentially, they want to keep racing as chartered teams without having to agree to all of the terms set forth by the sanctioning body as they argue its legality. Also of note, but they will seek damages from the sanctioning body.
The lawsuit ends with a demand for a jury trial. NASCAR has not yet publicly responded.
