23XI, Front Row Land Major Victory Over NASCAR in Anti-Trust Battle

By David Morgan, Associate Editor

In the tug of war that has been ongoing between NASCAR, 23XI Racing, and Front Row Motorsports, the two teams notched a win on their belt on Wednesday when a federal judge ruled in their favor and granted them a temporary injunction to allow them to race as chartered teams in 2025.

United States District Judge Kenneth D. Bell released his decision on the injunction that 23XI and FRM had been seeking since their suit against the sanctioning body was filed in the closing weeks of the 2024 NASCAR Cup Series season.

Instead of having to race as “open” teams in 2025, both teams can proceed as chartered cars for their entries already in place, as well as being able to move forward with the purchase of additional charters for the third car that each of the teams have already announced for next season.

“The Court finds that NASCAR possesses monopoly/monopsony power in the relevant market, which is the market for premier stock car racing teams in the United States,” the ruling states.

“NASCAR’s Cup Series is the only premier stock car racing series in the United States, and premier stock car racing is a distinct form of automobile racing with unique cars and highly specialized racing teams for which other types of motorsports like Formula 1 and IndyCar are not substitutes. Therefore, NASCAR fully controls which race teams can compete at the highest level of stock car racing – effectively, it has a 100% market share.”

The judge’s ruling went on to state that NASCAR could not require that the teams sign an agreement releasing them from litigation as a prerequisite for racing in its series.

“In practical effect, the question before the Court is – Can a monopolist require that a party agree to release the monopolist from all claims that it is violating the antitrust laws as a condition of doing business? The answer is no.”

The attorney for both teams, Jeffrey Kessler, released a statement shortly after the ruling, lauding the judge’s decision to grant the teams their injunction.

“We welcome today’s decision by Judge Bell granting a preliminary injunction in our favor. The court’s ruling allows 23XI and Front Row Motorsports to race existing cars as chartered teams in next year’s Cup Series. The decision also requires NASCAR to approve both teams’ purchases of a third charter from Stewart-Haas Racing and allow these cars to also race as chartered teams in the 2025 season.

“We are confident in the strength of our case and will continue to fight so that racing can thrive and become a more competitive and fair sport in ways that benefit teams, drivers, sponsors, and most importantly, our fans.”

23XI Racing co-owner Denny Hamlin summed up his thoughts more succinctly on social media:

The catalyst toward granting the injuction

Some of the catalysts toward granting the injunction appears to have been spurned on by the threat of drivers from both teams having clauses in their contracts that they would be free to look elsewhere for driving opportunities if the teams raced as open cars next season.

Likewise on the sponsorship front in that sponsors for both teams could shop around for a different home if certain terms in their contracts weren’t met.

“Since the Court denied the initial motion, 23XI’s top 2024 driver Tyler Reddick has given notice that the team is in breach of his driver contract, which will allow him to leave the team if the breach is not cured in 30 days (by December 18, 2024).

“Drivers Riley Herbst, Noah Gragson, Bubba Wallace and Corey Heim have similar contracts and/or have expressed their need for immediate resolution of the uncertainty surrounding the approaching racing season. The lack of chartered cars has also impacted Plaintiffs’ sponsor relationships, specifically with key sponsors Monster Energy and Love’s Travel Stops. These are changed circumstances that the Court finds have moved Plaintiffs’ likely harm from remote and speculative to present and immediate.”

The ruling continued, noting the teams proved the harm of having to race as open teams in 2025 and their testimony was enough to swing the pendulum into the teams favor with the granting of the injunction.

“Denying Plaintiffs their best drivers effectively denies them an incalculable opportunity to achieve success on the track, even if they are allowed to race as “open” cars – which remains decidedly uncertain as it is under the control of the Defendants.

“Sports are played in the moment. There is no way to predict when a team will become a “Cinderella” or enjoy a “special season,” when the right people, plan and (in this context) machines come together just right. For that reason, beyond the commercial implications of the loss of race wins or a championship, the loss of the opportunity to succeed is itself irreparable.

“Put more directly, what would it be worth for each of the Plaintiffs and their drivers to be able to forever say they won the 2025 Daytona 500 or the NASCAR Cup Series Championship?

“In sum, Plaintiffs have shown the likelihood of irreparable harm sufficient to support a preliminary injunction.”

NASCAR has the right to appeal the injunction, but as of Wednesday’s ruling, the sanctioning body had not made a decision on whether it would take that step with just under two months until the 2025 season starts.