NASCAR has not issued any public statements; Court documents take you behind the scenes with communications from NASCAR and 23XI Racing
23XI Racing and Front Row Motorsports have filed a preliminary injunction in their antitrust case against NASCAR. Both teams are looking for the court to allow them to compete as Charter teams for 2025 despite skipping the signing of charter agreements as the lawsuit is ongoing.
They also filed for discovery of documents and files from NASCAR executives Jim France, Lesa France Kennedy, Ben Kennedy, Steve O’Donnell, Steve Phelps, and Scott Prime.
The filing reads, “Defendants are working to prepare oppositions that provide argument, applicable law, and, evidentiary support to demonstrate Defendants positions: l) Plaintiffs are seeking a mandatory injunction that is only warranted in the most extraordinary circumstances (which are not present here) since they are seeking to alter the status quo through an injunction requiring NASCAR to provide Charters for 2025 and beyond notwithstanding that the time to sign Charters for 2025 has expired; 2) Plaintiffs cannot establish irreparable harm since Plaintiffs and their counsel have confirmed that Plaintiffs’ teams will compete as open teams in 2025, which means that money damages can compensate Plaintiffs even if they were to ultimately prevail; and 3) Plaintiffs cannot establish a likelihood of success on the merits for multiple reasons, including that this is a dispute over contract terms, not an antitrust case.”
On September 6th, 13 of 15 teams signed the charter agreement that begins in 2025. These two teams missed the final deadline and elected to take the case to court.
NASCAR lawsuit opened by 23XI Racing and Front Row Motorsports
23XI and Front Row issued the following joint statement:
“The 23XI and Front Row Motorsports teams are fully committed to competing in next year’s Cup Series. Today’s procedural filing is the next step in advancing our case against NASCAR and their monopolistic practices, while protecting our drivers, race teams, and sponsors by establishing our legal right to run in 2025.”
Jeffrey Kessler issued the following statement:
“NASCAR’s dominant control over racing is not because of its superior skill or business acumen, but rather its history of exclusionary acts and restrictive agreements that have stifled competition through its monopoly power. We believe our expedited discovery requests of NASCAR and the France family will shed light on their anticompetitive practices and support a preliminary injunction ruling that 23XI and Front Row Motorsports have a legally protected right to race next year while our antitrust case proceeds in Court,” said Jeffrey Kessler, Winston & Strawn LLP Partner and Co-Executive Chairman, and lead counsel for 23XI Racing and Front Row Motorsports.
NASCAR has hired attorney Chris Yates of Latham & Yates.
NASCAR teams sign new charter agreement; 23XI Racing excluded
Steve Phelps: Letter to 23XI Racing
The following letter addressed to Michael Jordan and Denny Hamlin is from September 11th:
“We have reviewed your September 6th letter and we would like to respond to certain points asserted in your correspondence,” the letter from Phelps opened.
“You suggest that NASCAR ‘approved’ your investment in the sport. The decision to buy a NASCAR team was a unilateral choice made by you as experienced businessmen. NASCAR was not involved in the negotiations of the terms, conditions, price or ultimate decision to acquire a race team.”
“When 23XI purchased Charter Agreements in 2020 and 2021, NASCAR did not ‘approve’ but only consented to the transfer via the Joinder Agreement.”
“You also suggest that NASCAR was ‘not negotiating in good faith’ by virtue of the terms NASCAR offered in the renewal Charter Agreement. The Joinder Agreement referenced above requires each assignee to assume ‘all obligations, liabilities, duties and responsibilities …under the charter agreement.”
“Specifically, those obligations included in section 2.3 (Good Faith Renewal Obligations) of the Charter Agreement whereby …’the final decision whether or not to renew, and the term of any renewal period, shall be subject to mutual agreement of the parties and, for clarity, either party may propose any changes to this agreement during such Negotiation Period.’ “
“One party not agreeing to the other party’s proposed changes is not a failure to negotiate in good faith’, it’s the process of negotiation. It appears that, after over two years of protracted negotiations, there has not been a meeting of the minds on certain key points which has led to an impasse.”
“This does not imply that NASCAR has failed to negotiate in good faith’, but rather reflects the complexities of the ongoing discussions and the differing positions of the parties involved. However, NASCAR has acted above board throughout this process.”
“Despite your team waiving its exclusive negotiating right after it expired January 29, 2024, NASCAR did not talk or have discussions with third parties around the charters in an effort to close agreements with the current charter owners. Throughout the process NASCAR has made concessions and in return negotiated for things that NASCAR felt were important.”
“Lastly, you suggest that 23XI was not afforded an opportunity to negotiate fairly with NASCAR. NASCAR and the Teams have been negotiating for over two years regarding the terms of this Charter Agreement and we began those conversations earlier than was set forth in the Charter Agreement in an effort to find common ground as early as possible.”
“Many of those meetings directly involved your representative. We received individual comments from many teams and also received general comments from Covington, which purported to represent the interests of all the teams.”
“The negotiations have been lengthy and exhaustive (see high level timeline attached, which is not meant to exhaustive of every conversation but shows the on-going communication between Teams and NASCAR).”
“We firmly believe that we have come to a document that is fair and balanced based on the interest of all the stakeholders in the industry. The Charter Agreement has been finalized and the negotiations are concluded.”
Charter Negotiation Timeline
The following timeline was included with the letter above:
June 2022: Initial proposal received from Teams
October 2, 2022: First Charter negotiation session in Talladega (NASCAR counter)
October 2022: Individual Team meetings at race shops
November 1, 2022: Team Owner Council meeting
January 12, 2023: Charter negotiation session in Daytona (Team counter)
January 19, 2023: Team Owner Council meeting
February 4, 2023: Charter negotiation session in Los Angeles (NASCAR counter)
February 23, 2023: Charter negotiation session in Charlotte (Team counter)
March 2, 2023: First meeting of sub-committee to discuss ‘all in’ and opportunities to collaborate
March 14, 2023: Second meeting of sub-committee to discuss ‘all in’
March 21, 2023: Tim sends Team business collaboration points
March 24, 2023: Charter negotiation session – Virtual (NASCAR Counter)
March 28, 2023: Follow up meeting with ancillary rights team scheduled. Teams cancelled and didn’t want to work further on this without the larger agreement terms in place.
April 4, 2023: Team Owner Council meeting (Teams did not attend)
May 5, 2023: Letter to NASCAR Board on permanent Charters
May 9, 2023: Letter sent to TNC saying that we were scheduling one-on-one team meetings
May 11, 2023: Email from Dave Alpern asking us to add the Charter conversation to the June 22 TOC – NASCAR replied that individual meetings would not be concluded by then given Jim in Europe for Garage 56
May 18, 2023: Letter from Dave Alpern from the TOC regarding driver ambassador program
May 19, 2023: Email from Jeff Gordon on desire / feasibility of permanent Charters
May / June 2023: Individual Team meetings
June 22, 2023: Team Owner Council meeting
July 7, 2023: Meeting with 23XI and Jim France and Steve Phelps
July 25, 2023: Charter negotiation session – Virtual (NASCAR proposed subgroups to make progress)
August 30, 2023: Team Owner Council meeting
September 19, 2023: Charter negotiation session – Hendrick Barn
October 9, 2023: Charter negotiation session – Charlotte Law firm
October 25, 2023: Team Owner council meeting
December 22, 2023: First Charter extension letter sent and agreed to
January 5, 2024: RTA / Covington letter to NASCAR
January 9, 2024: Letter response back to Covington
January 16, 2024: Charter negotiation session – JW Marriott Charlotte
January 25, 2024: Charter negotiation session – Charlotte
January 26, 2024: 2nd extension letter sent and not agreed to
January 30, 2024: Team Owner Council meeting
February 14, 2024: Letter sent to each individual Team Owner to clarify position and ask for individual meetings
February 2024: Limited number of individual Team meetings
April 8, 2024: Letter from Jim France to 23XI offering to meet with the team and asking them to respond by April 11, 2024
April 12, 2024: Steve Lauletta emailed letter from Denny Hamlin to Steve Phelps. The letter referred NASCAR back to the TNC to negotiate on their behalf.
Mid-April 2024 to late May 2024: Individual Team Meetings
April 26, 2024: Steve Newmark sends Pool Allocation proposal to Scott Prime done by 3 team CFO and 3 team execs. Directs Prime to Newmark or Jonathan Marshall if there are questions.
April 29, 2024: Steve Newmark emailed Scott Prime to provide additional color on how they reached the Pool Money proposal. 13 of 15 teams voted to endorse.
May 1, 2024: Team Owner Council meeting
May 10, 2024: Letter from 3-4 teams with their concept/feedback from the meetings (23XI said they did not support and would be sending their own comment with TNC)
May 10, 2024: Meeting with Jim France, Steve Phelps, Steve O’Donnell, Ben Kennedy and Scott Prime (NASCAR) and 23XI
May 13, 2024: In response to NASCAR’s request in individual team meetings to understand the evergreen request, Steve Newmark sends evergreen language on behalf of the TNC (23XI copied)
May 17, 2024: Steve Phelps calls all teams to let them know they will not receive the draft on this day.
May 28, 2024: Charter draft sent to Teams with a request to return feedback by June 11.
June 11, 2024: Email from Steve Lauletta to Steve Phelps acknowledging that 23XI was working with the other teams on a redraft of the May 28, 2024 draft from NASCAR and letting us know their outside counsel wouldn’t have the draft ready to send back until EOD Friday June 14.
June 11, 2024: Email to teams acknowledging the request from some teams to extend the windows to provide feedback to Friday, June 14, so provided that extension to all teams.
June 14, 2024: Email from Steve Lauletta (23XI) letting us know the teams met with the attorneys yesterday and they would need more time to get comments.
July 10, 2024: NASCAR receives redline of the Charter draft from Teams
July 17, 2024: Team Owner Council meeting
July 24, 2024: NASCAR legal/Latham met with Covington for NASCAR questions on the Team’s redline
August 14, 2024: Charter Redline and executable agreement send out to Teams. Email stated goal was to have them executed by September 1.
August 22, 2024: Amanda Oliver (NASCAR legal) meets with Jonathan Marshall (RTA) regarding questions asked by the Teams
August 24, 2024: Joe Gibbs, representing the Teams, met with Jim France
August 29, 2024: Brian Herbst and Tim Clark meet with Torrey Galida and Steve Newmark to discuss Ancillary Rights. NASCAR offered to meet with any teams who wanted to discuss and were told these were the representatives.
August 30, 2024: Charter Agreement draft and executable PDF sent out to all teams
September 4, 2024: Email from Jeff Gordon as co-chair of the Team Owner Counsel to Steve Phelps and Steve O’Donnell which represented that 15 teams (Including 20 Owners) had a call with Covington and asking NASCAR legal to reach out for a call with Covington
September 4, 2024: NASCAR legal reaches out to Covington as directed by the Teams
September 5, 2024: NASCAR lawyers met with Covington and Jonathan Marshall/RTA at 10am ET
September 5, 2024: NASCAR provides redline to Covington with the revisions from the call at 3:15pm
September 5, 2024: NASCAR provides Driver Agreement to Covington at 3:23pm ET
September 6, 2024: NASCAR sends revised redline to Covington 4:08pm ET with revision of the Extension Term to synch to Traditional Broadcast term length.
September 6, 2024: NASCAR sent out email notifying 23XI the Charter Agreement was being sent for signature 4:56pm ET
September 6, 2024: NASCAR receives Covington comments 5:36pm ET
September 6, 2024: Letter from 23XI to Steve Phelps 5:45pm
September 6, 2024: Adobe sign sent to 23XI for Charter 4 (5:46pm ET) and Charter 30 (5:47pm ET)
Richard Childress comments on the NASCAR lawsuit
Steve Phelps: Another letter to 23XI Racing
This letter is from September 18th:
“It appears after 2 years of negotiations with teams, both collectively and individually, compromise and concession on both sides up until the last minute, we firmly believe that we have come up with a document that is fair and equitable to the industry,” the letter opens from NASCAR President Steve Phelps.
“You suggest that NASCAR somehow has ‘monopoly power’ and that 23XI and other teams ‘depend on (NASCAR) for a competitive opportunity’ and have been presented with a ‘take-it-or-leave-it offer.’ We feel — and our attorneys have confirmed — that this contention is misplaced — and similar types of claims have already been rejected by courts.”
Rick Hendrick comments on 23XI Racing not signing agreement
NASCAR accused of threatening to revoke charters for agreement
