NASCAR Lawsuit: 23XI-FRM filings signal push for summary judgment on crucial ‘market definition’ fight

The latest documents in the highly publicized antitrust litigation between 23XI Racing, Front Row Motorsports (FRM), and NASCAR signalled that the teams were planning to file a motion for summary judgment that would focus on the market definition. The parties consider it to be the main point of contention in the case.

23XI and FRM claim that the proper market for antitrust purposes is "premier stock car racing," thus describing NASCAR as a single seller of that particular market and asserting that they have been damaged by NASCAR's control over the charters and the participation. By contrast, NASCAR argues that the market is far wider, including other racing series and motorsport opportunities, and claims that the mere fact of investing in one segment (such as Cup Series charters) cannot be sufficient to define the antitrust market or to demonstrate the existence of harm without first taking into account the available alternatives.

Bob Pockrass reported:

"23XI/FRM filing indicates they'll file motion for summary judgment on market definition. The teams define the market as "premier stock car racing" ...NASCAR says market is broader, that you can't invest in something and then claim that's the market and you've been harmed. (1/2)"

Bob Pockrass

@bobpockrass

23XI/FRM filing indicates they'll file motion for summary judgment on market definition. The teams define the market as "premier stock car racing" ...NASCAR says market is broader, that you can't invest in something and then claim that's the market and you've been harmed. (1/2)

He further added:

"In past NASCAR lawsuits where tracks have sued NASCAR, rulings indicated that the market included at least other racing series. How the judge rules on market definition (or if he leaves it up to a jury) could impact how each side feels about settling/going to trial. (2/2)"

Bob Pockrass

@bobpockrass

In past NASCAR lawsuits where tracks have sued NASCAR, rulings indicated that the market included at least other racing series. How the judge rules on market definition (or if he leaves it up to a jury) could impact how each side feels about settling/going to trial. (2/2)

The dispute over what the market comprises has far-reaching effects on the lawsuit. If the judge supports the clubs' understanding of the market as more limited, the automobile racing organization will probably get into deep trouble with the anti-monopoly laws, thereby being unable to issue bail or agree to the settlements. On the other hand, if the wider definition of the market is accepted, NASCAR would be a company with such a strong position that it would be able to give a safe and successful defense of its business practices.

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Michael Jordan reportedly warned NASCAR teams that they will “regret not supporting” 23XI

Amid internal tensions, Michael Jordan has criticized other team owners, including Joe Gibbs, for siding with NASCAR and signing the new charter agreement. In text messages presented in federal court, he warned that teams who failed to support 23XI and FRM “will regret” their decision, reinforcing his commitment to push for changes even at great cost.

"Teams are going to regret not supporting us," Michael Jordan is said to have written. (via The Athletic)

The lawsuit, brought by 23XI Racing and Front Row Motorsports, alleges that NASCAR’s charter system and business practices have suppressed competition and unfairly reduced revenues for teams in the Cup Series. The teams specifically object to restrictive rules on acquiring or selling charters, which they claim are monopolistic and harm the ability of new or smaller teams to compete on equal terms.

A federal judge previously believed that NASCAR’s charter agreement provision, which restricts teams from taking legal action, was illegal. That ruling allows 23XI and FRM to continue operating as chartered teams while the court case proceeds.