What's next for Michael Jordan’s 23XI and FRM after losing court ruling against NASCAR?

Michael Jordan's 23XI Racing and Front Row Motorsports could face an uncertain future in NASCAR following the U.S. Court of Appeals' decision to vacate the preliminary injunction on Thursday (June 5). The teams' operations in NASCAR could be at risk of ceasing, as they would carry a financial burden if the injunction is overturned on June 26.

If the revocation takes effect, 23XI, co-owned by six-time NBA champion Michael Jordan and Joe Gibbs Racing driver Denny Hamlin, and FRM would lose their charter privileges and run as open teams. This means their financial incentive from NASCAR would be impacted, while sponsors could renegotiate their agreements.

The teams are given 14 days to request a rehearing on the case, meaning they can fight for the injunction until June 19. After seven days, if the three-judge appeals panels do not reconsider keeping the injunction, the plaintiffs would have to become open teams.

How would this fall from grace for 23XI and FRM happen? Let's explore.

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Risk of DNQs

NASCAR only allows a maximum of 40 cars on the field, though the sanctioning body can stretch it to 41 under its new rule introduced earlier this year. Without a charter that guarantees entry to all races, Michael Jordan's 23XI Racing and Bob Jenkins' Front Row Motorsports would be subject to DNQ (did not qualify) if over 40 cars attempted to make the entry list.

Not making the race should compromise the teams' playoff hopes as they won't be allowed to try and score points. Drivers dreaming of winning a championship might reconsider their contracts, especially since they signed to run a full-time ride.

Tyler Reddick sporting Michael Jordan's brand at Texas Motor Speedway in 2025 - Source: Imagn

Another downside of not qualifying for a race would be losing airtime on the broadcast. Without an entry, the cars would be sidelined from the races, meaning the sponsor paint schemes and decals wouldn't be promoted on the racetrack. Losing a sponsorship deal would take a toll, considering many teams fund their on- and off-track operations through their respective brand partners.

Some of 23XI Racing's sponsors include Michael Jordan's Jordan Brand, Monster Energy, and McDonald's. Meanwhile, FRM's sponsor list includes Love's Travel Stops, Rush Truck Centers, and TitleMax, among others.

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Lose financial incentives

Chartered teams are subject to guaranteed payouts significantly higher than open teams. NASCAR doesn't disclose the exact amount, but teams not getting the full financial incentive would likely deplete their resources faster than those that do.

The financial incentives come from various sources, including NASCAR's $7.7-billion media rights deal from 2025-2031. This program ensures stability in team operations, promoting long-term partnership with the series.

It is too early to tell what 23XI Racing and Front Row Motorsports plan to do in case the revocation of the injunction takes effect. While 23XI can receive funding from co-owner Michael Jordan, who made a fortune in the Jordan Brand, the approach doesn't sound feasible over the course of a season.

Noah Gragson driving the #4 Front Row Motorsports Ford - Source: Imagn

While 23XI and FRM's season could be on the line this month, they are slated to face NASCAR in a trial in December 2025. The trial aims to settle the dispute over the charter agreement, which the plaintiffs claim is anti-competitive.