CHARLOTTE, N.C. – 23XI Racing co-owners Michael Jordan and Denny Hamlin began NASCAR championship week by facing the sanctioning body in federal court.
23XI, which together with Front Row Motorsports is suing NASCAR and its CEO Jim France for antitrust violations, had its first in-person showdown with NASCAR within the courtroom during a hearing Monday on a motion for a preliminary injunction.
On the fifth floor of the federal courthouse in Charlotte, the team's attorney, Jeffrey Kessler, engaged in a heated, sometimes contentious hearing with NASCAR attorney Chris Yates. At stake is a clause in NASCAR's 2025 charter agreement with teams that doesn't allow them to take legal motion. 23XI and FRM asked Judge Frank Whitney to waive this clause and permit them to sign the agreements in order that they can proceed racing, either as charter teams or as “open” non-charter teams.
“We literally cannot practice our profession at all without signing this declaration,” Kessler said.
23XI Racing co-owners Michael Jordan, Denny Hamlin and Curtis Polk, in addition to Bob Jenkins and Jerry Freeze of Front Row Motorsports, enter federal court for today's injunction hearing. pic.twitter.com/hXNJaecFFW
— Jordan Bianchi (@Jordan_Bianchi) November 4, 2024
Teams are hoping Whitney will each waive the clause and restore the unique charter offer that NASCAR had on the table on Sept. 6 when 13 owners signed it. DocuSign originally had a Nov. 5 deadline, Kessler said, but NASCAR has now withdrawn it.
Yates said NASCAR now not desired to enter right into a charter agreement with the teams after they publicly disparaged NASCAR.
“They have called NASCAR a series of names that undermine NASCAR’s brand and goodwill,” Yates said. “NASCAR only wants to enter into charter agreements with teams that want to work together to grow the sport.”
Yates added that the teams had launched a “frontal attack on the charter system” and argued that NASCAR shouldn’t be a monopoly for several reasons, including the provision of 128 other tracks that host stock cars within the United States along with the 26 Cup venues. could race within the series.
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He also said the owners could decide to do something else with their company besides running a NASCAR team, corresponding to “buying another NBA team,” a reference to Jordan's previous ownership of the Charlotte Hornets. But Kessler said suggesting that 23XI and FRM suddenly change their business model, even to a special racing series, could be like asking a football player to grow to be a baseball player.
Jordan spent much of Yates' arguments leaning forward attentively from his seat within the front row of the courtroom, sometimes with a smile and sometimes with a hand to his chin.
Michael Jordan after the hearing: pic.twitter.com/2L4MQFmsxj
— Jeff Gluck (@jeff_gluck) November 4, 2024
Yates said racing teams would receive about half of all TV revenue under the 2025 charter agreement and that the worst-performing charter team would receive a 50 percent increase in payouts under the present agreement.
He said NASCAR is contractually obligated to notify teams of next season's funding by Nov. 1, which is why NASCAR has reduced the number to 32 charters and has no plans to re-offer 23XI and FRM their existing 4 combined charters. Charters offer guaranteed entry into every Cup Series race in addition to the next share of race winnings. Yates claimed the teams asked the judge to force NASCAR right into a seven- to 14-year contract by rewriting the contract “to their preferred terms.”
“They are trying to force NASCAR into an unwanted charter relationship,” he said.
Kessler denied this, saying the teams just wanted the judge to waive the clause at some stage in this case, adding: “Hopefully it doesn't take 14 years.”
Yates also said the teams' claim that many house owners were forced to sign the brand new agreement on Sept. 6 is fake because team owners like Roger Penske, Rick Hendrick and Pro Football Hall of Fame coach Joe Gibbs should not the kind being pushed around by individuals who try this. He also quoted Hendrick and owner Justin Marks as saying they were glad with the terms of the brand new charter agreement.
At one point, Kessler said loudly that Yates was “making up facts” and “misrepresenting” the team's case to mislead the judge. Kessler rephrased the teams' demands “so that even (Yates) can understand it.”
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Yates replied, “We disagree on almost everything he argues.”
Kessler also revealed that 23XI's driver contract with Tyler Reddick would allow the driving force to depart as a free agent if 23XI didn’t have a charter for him together with the team's sponsors.
Reddick is considered one of 4 drivers battling for the NASCAR Cup Series championship Sunday at Phoenix Raceway. Before the hearing, Whitney told those in attendance that he hadn't seen his courtroom this full “in several years,” adding, “I also feel like I have two full law offices ahead of me.”
Whitney initially seemed skeptical of Kessler's claims but was more open to Yates' arguments, but Kessler's rebuttals led to each side being on equal terms.
The judge praised each lawyers for his or her “extraordinary” and “very excellent arguments” and said he would issue a written decision by Friday.
Both sides were satisfied afterwards. Although NASCAR made no comment, France turned and winked at senior advisor Mike Helton within the row behind him.
And Jordan told reporters outside the courtroom that Kessler “did an incredible job today.”
“I put all my cards on the table,” Jordan said. “I think we managed that well. But I’m looking forward to winning the championship this weekend.”
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