CHARLOTTE, N.C. — 23XI Racing co-owners Michael Jordan and Denny Hamlin are facing sanctions in federal court at the start of NASCAR championship week.
23XI, along with Front Row Motorsports, is suing NASCAR and its CEO Jim France for violating antitrust laws, setting up its first face-to-face court showdown with NASCAR during Monday’s hearing on a request for a preliminary injunction.
Team attorney Jeffrey Kessler and NASCAR attorney Chris Yates engaged in a heated and sometimes contentious hearing on the fifth floor of federal court in Charlotte. A clause in NASCAR’s 2025 charter agreement with the team does not allow them to pursue legal action; 23XI and FRM asked Judge Frank Whitney to waive the clause and allow them to sign the agreement so they can operate as a franchised team or non-franchise “Open” teams continue racing.
“Without signing this statement, we literally wouldn’t be able to practice our profession at all,” Kessler said.
23XI Racing co-owners Michael Jordan, Denny Hamlin and Curtis Polk, along with Front Row Motorsports’ Bob Jenkins and Jerry Frazee, walked into federal court for today’s injunction hearing. pic.twitter.com/hXNJaecFFW
— Jordan Bianchi (@Jordan_Bianchi) November 4, 2024
The team wants Whitney to waive that clause and reinstate NASCAR’s original charter offer from Sept. 6, which 13 owners signed. Kessler said the original deadline for DocuSign was Nov. 5, but NASCAR has now withdrawn that deadline.
Yates said NASCAR no longer wants to enter into charter agreements with the teams after publicly disparaging it.
“They gave NASCAR a series of names that were damaging to NASCAR’s brand and goodwill,” Yates said. “NASCAR only wants to enter into franchise agreements with teams that want to work together to grow the sport.”
Yates added that the teams were “engaging in a frontal attack on the charter system” and argued that NASCAR is not a monopoly for several reasons, including that in addition to the 26 Cup venues, there are 128 other tracks where original cars can race in the U.S. .
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He also said that in addition to running a NASCAR team, the owners could choose to do other things, such as “buy another NBA team,” a nod to Jordan’s previous ownership of the Charlotte Hornets. But Kessler said suggesting that 23XI and FRM could suddenly change their business model or even another racing series would be like asking football players to become baseball players.
During Yates’s arguments, Jordan leaned forward in concentration in his seat in the front row of the courtroom, sometimes smirking, sometimes resting his chin.
Michael Jordan after hearing: pic.twitter.com/2L4MQFmsxj
— Jeff Gluck (@jeff_gluck) November 4, 2024
Yates said racing teams will receive about half of all television revenue under the 2025 charter agreement, and said the worst-performing charter teams will receive a 50% payout increase under the current agreement.
He said NASCAR is contractually obligated to inform teams of next season’s funding by Nov. 1, which is why NASCAR is reducing the number of charters to 32 and has no plans to re-offer the existing four joints to 23XI and FRM. Charter flight. Charters guarantee entry to every Cup Series game and receive a higher share of game prize money. Yates claimed that the teams asked a judge to rewrite the contract “on their terms,” forcing NASCAR to sign a seven- to 14-year deal.
“They’re trying to force NASCAR into an unwelcome franchise relationship,” he said.
Kessler denied that and said the team just wants the judge to waive the provision for the duration of the case, adding: “Hopefully it won’t be 14 years.”
Yates also said the team’s assertion that many owners were forced to sign new deals on Sept. 6 was false because players like Roger Penske, Rick Hendrick and Pro Team owners like Football Hall of Fame coach Joe Gibbs are not the kind of people who would get this deal. He also quoted Hendrick and owner Justin Marks as saying they were satisfied with the terms of the new charter agreement.
At one point, Kessler loudly claimed that Yates had “fabricated facts” and “misrepresented” the team’s case to mislead the judge. Kessler rephrased the terms of the team’s request “so even (Yates) could understand.”
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Yates responded: “We disagree with almost everything he argues.”
Kessler also revealed that 23XI’s driver contract with Tyler Reddick will allow the driver to leave as a free agent if 23XI does not offer him and the team’s sponsors a franchise.
Reddick is one of four drivers competing for the NASCAR Cup Series championship on Sunday at Phoenix Raceway. Before the hearing, Whitney told those in attendance that he hadn’t seen a courtroom this packed “in several years,” adding, “I felt like I had two full law firms in front of me.”
Whitney initially seemed skeptical of Kessler’s claims while more open to Yates’s arguments, but Kessler’s rebuttal made both sides evenly matched.
The judge praised the lawyers for their “extraordinary” and “remarkably good arguments” and said he would issue a written decision by Friday.
Then both parties looked happy. Although NASCAR made no comment, France turned and winked at senior adviser Mike Helton, who was sitting in the row behind him.
Jordan told reporters outside court that Kessler “did an incredible job today.”
“I put all my cards on the table,” Jordan said. “I think we did a good job at that. But I’m looking forward to winning the championship this weekend.
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(Photo: Sean Gardner/Getty Images)
