Federal Court issues major ruling in 23XI & FRM lawsuit against NASCAR amid ‘devastating’ concerns

The Federal Court on Wednesday delivered a verdict under which 12 NASCAR teams will have to disclose their financial records up to a limited extent. This has come after the Court asked the teams to reveal their full financial records earlier in the ongoing lawsuit between NASCAR and 23XI Racing and Front Row Motorsports.

The 12 teams in question appeared in court on Tuesday to argue against the ruling of having to disclose all their financial records to the sanctioning body. They stated that the records were sensitive information, and if they were made public, it would be catastrophic for the teams in terms of business.

Adam Ross, the attorney who represented the 12 NASCAR teams in court, stated that the verdict would fully devastate their business operations. Speaking about this, he said:

“It would be absolutely devastating to these race teams if their competitors were able to find out sponsorships on the cars, driver salaries and all revenue streams. It cannot make its way into the public realm.” (via The Athletic)

However, the sanctioning body shared the input that they would ask the body to analyze the financial information by appointing an independent body. They would examine the teams and their financial records anonymously.

Judge Bell has agreed to the terms and directed that only total revenue, total costs, and net profits will be analysed from 2014 to date. Among the 12 teams, Kaulig Racing has already submitted its financial records to NASCAR.

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23XI Racing co-owner shared a stern warning to NASCAR amid ongoing lawsuit

Denny Hamlin, 23XI Racing co-owner, sent a clear message to the sanctioning body, saying he was prepared to go all the way with the lawsuit. Speaking about it ahead of the Pocono Raceway Cup Series race last week, he said,

"I have stated publicly that I've always hoped cooler heads would prevail... I can tell you this is, it’s not on our end that needs, you know, the cooler heads. It's certainly, we've said that. I think the difference is they're saying different things on their side. So, we're prepared to go all the way."

Co-owners of 23XI Racing, Denny Hamlin and NBA Hall of Famer, Michael Jordan talk on the grid after the NASCAR Cup Series YellaWood 500 at Talladega Superspeedway on October 06, 2024 - Source: Getty

23XI Racing, co-owned by Hamlin and NBA legend Michael Jordan, and Front Row Motorsports, owned by entrepreneur Bob Jenkins, got into a legal tussle after the two teams declined to sign the charter agreement by the sanctioning body.

While 13 other teams signed it, 23XI and FRM stayed out and filed a lawsuit instead. The lawsuit was filed in October last year, and NASCAR, in turn, filed a countersuit in the Federal Court.