Michael Jordan appears to be headed to court.
An antitrust lawsuit filed by Jordan’s 23XI Racing team against NASCAR, the major sanctioning body for pro stock car racing and owned by the France family, is set to go to trial on Monday, Dec. 1.
There are potentially far-reaching repercussions, too, barring a last-minute settlement before proceedings begin in the U.S. District Court for the Western District of North Carolina.
The presiding judge, Kenneth D. Bell, said in June, ‘I am once again amazed at the effort going on to burn this house down over everyone’s head but I’m a fire marshal and I’ll be here in December if need be.’
And so December has arrived.
What is the NASCAR antitrust lawsuit?
The lawsuit accuses NASCAR of restraining fair competition and violating the Sherman Antitrust Act, preventing teams from competing ‘without accepting the anticompetitive terms’ it dictates. Filed in 2024, the lawsuit also asserts the ‘France family and NASCAR are monopolistic bullies.’
Jordan has not entered this battle alone. Denny Hamlin, a driver for Joe Gibbs Racing, and longtime Jordan business adviser Curtis Polk are co-owners of 23XI Racing, which just completed its fifth season on NASCAR’s Cup Series. Front Row Motorsports, another NASCAR team, is a plaintiff.
The case centers on multimillion-dollar charter agreements, which guarantee teams spots in every race of the Cup Series – the major league of NASCAR – and entitles them to a share of NASCAR’s revenue from sponsorship and media deals.
In a text message that surfaced during court proceedings leading to trial, according to a CBS Sports report, Jordan wrote, ‘I look forward to going down firing. If I have to fight this to the end for the betterment of the sport, I will do that.’
A snapshot of NASCAR finances
Sponsorship deals, race prize money and revenue sharing from TV rights generate money for the teams. Discovery during a trial could produce more details about the cash flow in NASCAR, owned by the France family.
But financial information already is circulating.
In 2023, NASCAR president Steve Phelps said most Cup Series teams were not profitable. Court documents released from the antitrust lawsuit show that NASCAR’s net income dipped to about $100 million in 2024, according to a Fox Sports report.
According to the same Fox Sports report, the teams can earn between $7 million to $18 million a season before sponsorship, but race teams report losing $2.2 million a year per car.
The crux of the case is the charter agreements.
In 2024, NASCAR offered teams a seven-year charter agreement that would increase media revenue and also increase the annual cost of charters to $8.5 million from $5 million.
While there were reported rumblings among NASCAR racing teams that had existing charters, only Jordan’s 23XI Racing and Front Row Motorsports refused to sign the new contracts.
Take it or leave it is how the antitrust lawsuit characterized NASCAR’s deal.
The court ruled 23XI Racing and Front Row Motorsports could ride without charters this past season. But losing them at trial could force the teams to compete as ‘open teams’ and create greater difficulty in remaining profitable.
If NASCAR loses the case, it’s unclear how severe the damages could be and how it would impact its ability to run the sport.
‘Just getting started’
Jordan, Hamlin and Polk founded 23XI Racing in 2020. The team began racing that next season on the Cup Series with a single car and a single driver, Bubba Wallace.
Five years later, the team has three Cup Series cars and has contended with the most successful teams in NASCAR.
The team’s top drivers, Tyler Reddick and Wallace, have won 10 races for 23XI. Reddick has won seven and made the final four of the 2024 playoffs. Both Reddick and Wallace made the playoffs this season but were eliminated in the round of 12.
‘As far as I’m concerned, we’re just getting started,’ Jordan said in October in a statement to USA TODAY Sports.
But with the case looming, 23XI Racing guaranteed its employees pay through 2026 to assuage any concerns.
‘Three-dimensional chess’
There’s no Michael Jordan of antitrust attorneys working this case, but they’re both All-Stars.
Jordan and Co. are represented by Jeffrey Kessler, who was the lead attorney for Division I football and basketball players in a successful antitrust challenge against the NCAA. A partner at Winston & Strawn, Kessler also played key roles in a pay discrimination claim by the U.S. Women’s National soccer team.
NASCAR is represented by Christopher Yates, who led a team representing the US Soccer Federation in a restraint of trade verdict that saved the group $1 billion in damages, according to Yates’ bio at Latham & Watkins LLP. He’s also representing the UFC in a class-action case brought by fighters.
In multiple cases, the attorneys have represented opposing sides.
‘I know some of the tactics and strategies he likes to employ; I’m sure he knows some of the tactics and strategies I’ve employed,’ Kessler said of Yates in an interview with Bloomberg. ‘It makes it more of a game of three-dimensional chess for both of us.’