What is the NASCAR antitrust lawsuit all about? 23XI and FRM challenge the billion-dollar system

Last October, two NASCAR Cup Series teams, 23XI Racing and Front Row Motorsports (FRM), filed a high-stakes antitrust lawsuit against the sanctioning body and its chairman, Jim France. 23XI is co-owned by NBA legend Michael Jordan, NASCAR driver Denny Hamlin, and businessman Curtis Polk.

Together with FRM, it launched a bold challenge to NASCAR’s power structure and billion-dollar business model. Notably, as per Forbes, NASCAR is valued at approximately $3.5 billion. The teams accused NASCAR of monopolistic practices that hurt race teams both financially and competitively.

The central issue of the lawsuit is control. The teams argue that NASCAR dominates every aspect of the sport; it owns the series, many of the tracks, and forces teams to buy parts from NASCAR-approved suppliers. On top of that, NASCAR prevents teams from joining other racing series without its approval. According to the complaint, this level of control limits fair competition and violates federal antitrust law.

However, another part of the legal fight is the new charter agreement, which NASCAR handed out in late September last year. The original charter contract, which was introduced in 2016, guarantees teams a spot in each race and a share of race revenues. 23XI and FRM were the only two teams that refused to sign the updated contract and claimed that the deal offers unfair revenue distribution and comes with restrictive terms, including clauses that allegedly block teams from suing NASCAR.

What is the latest development in the lawsuit?

The lawsuit saw a major turn this week. On Thursday (June 5), a US Court of Appeals overturned a prior ruling that had temporarily given the 23XI and FRM charters for the 2025 season. The teams asked for an injunction and said they needed legal protection to keep their charters because the new agreement banned lawsuits against NASCAR. Last December, the injunction was granted by a judge, who ruled that the ban might break antitrust laws.

The teams' attorney, Jeffrey Kessler, did not make it clear if they would reappeal the decision in their latest statement.

"We are disappointed by today's ruling by the Fourth Circuit Court of Appeals and are reviewing the decision to determine our next steps. This ruling is based on a very narrow consideration of whether a release of claims in the charter agreements is anti-competitive and does not impact our chances of winning at trial scheduled for Dec. 1," read the statement (via Associated Press).

Even though the ruling does not directly affect the lawsuit, the new decision could allow NASCAR to revoke the two teams' three charters each, which could cost them tens of millions of dollars. Without the charters, they would become "open" teams and would not have guaranteed spots in the Cup Series races and earn significantly less prize money.

Meanwhile, the trial for the lawsuit is scheduled for December.