23XI Racing & FRM v. NASCAR was a case in which 23XI Racing and Front Row Motorsports allege antitrust violations by NASCAR. The plaintiffs are the two NASCAR Cup Series teams that refused to sign NASCAR's new charter agreement that began in the 2025 NASCAR Cup Series season.
The trial began on December 1, 2025. The teams also sought a change in NASCAR's business practices, claiming they are monopolistic. Another separate but key part of the two teams' legal battle with NASCAR was over an injunction request for them to compete as chartered entries during the 2025 season before the December trial was held. Kenneth D. Bell, a judge of the United States District Court for the Western District of North Carolina (the state where the NASCAR industry is based), has heard many of the arguments in the case. The case ended up settling.
Background Negotiations for NASCAR's new charter agreement to begin at the start of the 2025 season started in 2022. After two years of negotiations, NASCAR issued a "take it or leave it" offer for the teams, represented by the Race Team Alliance, to sign by September 6, two days before the first race of the 2024 playoffs at Atlanta Motor Speedway. Teams felt "threatened and coerced" to sign the new agreement by the deadline, according to people who spoke on the condition of anonymity to The Associated Press. One of the biggest reasons the teams did not sign on to the new agreement was because charters would not be made permanent. NASCAR Chairman and CEO Jim France was especially against the charter system being made permanent.
Pre–trial
On October 2, 2024, it was announced that 23XI Racing, along with Front Row Motorsports, filed an antitrust lawsuit against NASCAR over the terms of the updated charter agreement, as well as anti-competitive practices committed by the France family. 23XI and Front Row were represented by sports attorney Jeffrey L. Kessler.
On December 18, both teams were granted a motion of preliminary injunction, allowing them to race as chartered entries in 2025 while continuing their legal battle with NASCAR. The injunction also allowed the transfer of two Stewart–Haas Racing charters to both teams (23XI and Front Row each purchased 1 charter from SHR after the team closed down; the third SHR charter to be transferred went to Trackhouse Racing).
However, on June 5, 2025, the U.S. Court of Appeals for the 4th Circuit overturned the preliminary injunction ruling. After the teams' request for a rehearing on the injunction was denied, 23XI and Front Row had to begin competing as open teams starting at the race at Dover Motor Speedway in July. As a result, the six cars from the two teams, the No. 4 of Noah Gragson, No. 23 of Bubba Wallace, No. 34 of Todd Gilliland, No. 35 of Riley Herbst, No. 38 of Zane Smith and No. 45 of Tyler Reddick, would not have guaranteed entry in any remaining races if over 40 cars would attempt to qualify for a race and would also receive significantly less purse money in each race.
On August 25, NASCAR filed a legal notice of its agreement to issue one of the charters to a redacted entity. Also at that time, Reddick gave the team a breach of contract notice as a result of the lawsuit. On August 28, another hearing for an injunction to have both teams gain their chartered status back for the remainder of the 2025 season was held, and it included the revealing of text messages from NASCAR executives as well as 23XI team executives had against the other side. After the hearing, Kessler and 23XI owners Michael Jordan and Denny Hamlin spoke with the media. Jordan stated that "If I have to fight this to the end for the betterment of the sport, I will do it." On September 3, the courts denied the 23XI/FRM motion for preliminary injunction.
On October 7, NASCAR asked the court to order a settlement conference. On October 8, Judge Bell ordered both parties to participate in a settlement conference on October 21 with mediator Jeffrey Mishkin. On October 21, both parties met for a settlement conference. No agreement was reached, but both sides met again for further discussions on October 22. As part of the lawsuit process, the 2025 charter agreement became public on October 29. On December 1, 2025, the jury was selected and included six men and three women. Although there were some minor hiccups during jury selection due to their fandom for either side.
Trial
Day 1 On December 1, the trial started. After the jury was selected, Hamlin took the stand as the first witness and told the jury that he and other NASCAR team owners are "essentially just professional fundraisers" due to NASCAR's business model. 23XI had to generate $45 million in sponsorship revenue just to make a minor profit, but they were the exception, Hamlin testified. "The difficult part is coming up with tens of millions just to break even," Hamlin said. "Your costs (as an owner) aren't covered to put on (NASCAR's) show." He further emphasized that without Jordan's ability to pull in major sponsors and close deals, his team would not be profitable. "If I couldn't be successful with Michael as a partner, I was never going to make this work," he stated.
Kessler explained why NASCAR and its controlling France family fit the definition of abusing their monopoly power, outlining a roadmap of evidence he claims will show NASCAR tied up the racetracks and race cars and restricted the eligibility of teams to illegally maintain their monopoly. He compared the teams' situation to wanting to be a nurse for a career but having only one hospital to work at, with that hospital setting a below-market salary. The nurse's choice would be to "accept what they pay you or don't be a nurse." Kessler noted FRM owner Bob Jenkins has not made a profit for his race team in the 20 years he's been competing in NASCAR. Kessler said he plans to show evidence that the France family itself has received almost 400 million in a recent three-year period.
Meanwhile, NASCAR attorney John E. Stephenson said the teams were suing as a result of failed negotiations, not for an actual antitrust claim. The France family built NASCAR from the ground up through hard work, innovation, and risk-taking, Stephenson said, an "American success story that shouldn't result in a lawsuit, but in admiration." Stephenson said race teams on average generated a combined 640 million in sponsor dollars per year and were receiving 431 million from the new media rights deal and the sport's charter system, which guarantees certain revenues to teams. "If charters are so bad, why do great businessmen keep buying and investing in them?, If charters are so bad, why do they want to make them permanent?"
Day 2 On December 2, 2025, Day 2 of the trial started. Hamlin returned to the stand for cross-examination by NASCAR's other attorney, Lawrence Buterman. Hamlin first relayed how, in 2023, he had expressed concerns about the negotiations for the 2025 charter agreement to Steve Phelps, who advised Hamlin to speak with Jim France. Hamlin said he spotted France eating alone at lunch during NASCAR Awards Week in Nashville, so Hamlin joined France and came away "very, very discouraged" by their conversation. "He told me directly the problem in NASCAR is teams spend too much money," Hamlin recounted, adding France said teams should only be spending 10 million per season to run their cars rather than the current 20 million average. Hamlin responded, "We've cut this grass so short, we're down to the dirt," and said it was not realistic to cut costs in half. He then added that he told France he was "not trying to be a statistic, like the many owners who have gone out of business". Hamlin asked France how he could recoup his investment in the sport, to which he said, "he had no answer".
Hamlin rejected the notion that NASCAR was doing teams a favor by offering a renewable seven-year term on the 2025 charter agreements because it locked teams into a dollar amount with no negotiations rather than a percentage of the next media rights deal. "We will not be in business if we sign this within 10 years. This is essentially my team's death certificate for the future," he said. Hamlin was then asked if bringing a lawsuit in response was the right decision in light of the charter negotiations. Hamlin said, "I think it was the only decision. It's time for change. All I knew is we were right and what they did was wrong." Hamlin said, "23XI's profit margin was 2.26 percent, and one sponsor away from having all this profit gone." His most optimistic goal, as stated in documents, was to reach a 10 percent profit margin. However, under cross-examination, Buterman asked if Hamlin thought it was fair to be asking the jury for 205 million in damages (a 900 percent return on Hamlin's investment, Buterman noted) to which Hamlin struggled to answer and told Buterman, "We want to be made whole for what you guys did to us."
After Hamlin's testimony, the teams put NASCAR executive vice president Scott Prime, who heads NASCAR's strategy, on the witness stand. Kessler began to build his case for NASCAR's anticompetitive practices by using Prime's strategy memos and presentation decks to show how NASCAR was concerned about a possible LIV Golf-type situation in stock car racing. Kessler showed NASCAR's options to counter a potential breakaway series included a strengthened relationship with track ownership company Speedway Motorsports, which ended up coming to fruition (though Prime denied any knowledge of NASCAR's sanction agreements with the SMI racetracks). Las Vegas Motor Speedway carried a two-year exclusivity clause beyond the term of the agreement. Kessler then showed a document from Prime that planned for a meeting between senior executives and France which laid out two pathways the first of which was "NASCAR has all the leverage and the teams will almost have to sign the terms we put in front of them." Prime said he disagreed with that path and pushed for a compromise with the teams, which other executives agreed with.
Then text messages from Phelps citing a chart that had "zero wins for teams", and then Steve O'Donnell saying the lack of support for the teams would result in a "1998, Fuck the teams dictatorship, redneck, Southern, tiny sport." Prime denied on the stand and said, "From my point of view, where we landed was strong for the teams and progress had been made from the day of the frustrated text messages."
Day 3 On December 3, 2025, day 3 of the trial started. Prime returned to the stand. Kessler used Prime's emails and corporate communications to paint a picture of what he said were NASCAR's monopolistic abuses. Prime originally worked for consulting firm McKinsey, during which he prepared a 2014 report expressing "concerns over the longevity of the sport" if NASCAR did not take steps to improve the health of its race teams. One such step in his report included taxi-like "medallions" which ultimately came to fruition in NASCAR's charter system. Kessler noted how despite the charter system's existence, teams are hamstrung by a weak negotiating position and stuck in unfavorable terms when it comes to renewing charters because they have nowhere else to go. He also mentioned a 2019 letter from one team that asked for a better business model with more sustainable revenues to aid in teams' viability, which Prime acknowledged: "We presented the offer, and they accepted it."