“Mr. Hamlin and Mr. Jordan are charging their own team $1 million in rent for their $35 million Airspeed facility.”
23XI Racing and Front Row Motorsports are currently suing NASCAR. The trial began on Monday as the teams.
The courts have already declared that NASCAR has a monopoly on stock car racing. Now, the teams are looking to prove that they used anti-competitive practices to build that monopoly.
NASCAR lawsuit opened by 23XI Racing and Front Row Motorsports
On Tuesday, the two sides returned to the court for the second day of the trial. At the end of the day, NASCAR issued a lengthy statement:
NASCAR statement
“Today’s testimony confirmed that 23XI Racing purchased from another team a Charter, Denny Hamlin signed it agreeing to all of its contractual terms, got paid every penny due under the 2016 Charter – and now they want to claim they should receive a 900 percent return for supposed damages under the 2016 Charter,” NASCAR stated.
“Most of the testimony focused on the two-and-a-half-year negotiation over the 2025 Charter which 23XI and Front Row Motorsports did not sign. They made a choice to forfeit their Charters instead of signing them as 32 Charter holders did.”
“The 2016 agreement was itself a multi-year negotiated agreement that delivered many fundamental wins for race teams, including guaranteed starting position in every race, contractually secured payments of over $300 million a year to teams and a valuable long-term asset they can buy, sell, or lease at will – as Front Row has done on several occasions. 23XI and Front Row both kept buying Charters at ever-increasing prices even though they now say that the 2016 Charters were unfair to the teams.”
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Key points
“Based on witness testimony and exhibits entered into evidence today, several key points about Denny Hamlin and 23XI were revealed:”
“23XI has been profitable and the owners continue to do well financially:”
“Mr. Hamlin alone is making $14 million by driving for Joe Gibbs Racing.”
“Mr. Hamlin and Mr. Jordan are charging their own team $1 million in rent for their $35 million Airspeed facility.”
“23XI made profits of approximately $2.5 million in 2022 and $3.4 million in 2023, before the team began paying rent last year for the Airspeed facility owned by Mr. Hamlin and Mr. Jordan and paying legal fees for this litigation.”
“23XI spent $28 million to acquire a third charter in 2024 after acquiring two charters for $13.5 million (2021) and $4.7 million (2020).”
“According to Plaintiffs’ own expert, 23XI was worth at least $160.2 million just four years after it began racing.”
“Mr. Hamlin made it clear he ‘took care of his people,’ but 23XI pays its drivers only approximately 22 percent of its revenues even though its counsel pointed out that athletes get paid far more on a percentage basis in other sports.”
“Exhibits also showed Mr. Hamlin’s business partners believe he is an elite driver but was a cost control problem for 23XI.”
“When Mr. Hamlin pitched Mr. Jordan on building a team, he projected a 10 percent ROI. And now, 23XI’s owners want at least $205 million in damages, a 900 percent return on investment (ROI). His comments on the witness stand show he believes that NASCAR should subsidize their racing operations while they keep all their own sponsorship revenues.”
“Mr. Hamlin acknowledged that none of the alleged anticompetitive claims brought in his lawsuit against NASCAR were raised during negotiations for the 2025 charters, including in the 8-point letter that was the subject of much of today’s events.”
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Links
NASCAR | Joe Gibbs Racing | 23XI Racing | Front Row Motorsports
