Cameron Bebeau

Originally Published at: https://www.fsuthevoice.com/michael-jordan-sues-nascar/

On the morning of October 2, 2024, news broke that two NASCAR teams had filed an antitrust lawsuit against NASCAR and C.E.O. Jim France, according to the Associated Press. Of the two teams in question, one is 23XI Racing, co-owned by NBA Hall of Famer Michael Jordan.

23XI Racing has been an outspoken voice within the racing world, having been vocally opposed to NASCAR’s attempts at coercing teams into signing the 2025 Charter Agreement, according to Speed Sport. In NASCAR, a charter is an agreement that guarantees both entry into all 38 events held throughout the year, and a significantly larger portion of the purse money compared to non-charter teams.

The charter system was first introduced in 2016, and acted as a franchise model to protect team’s investments. After a 2020 renewal, finances in the sport have not improved, and getting teams to re-sign has proven to be difficult. According to the lawsuit document, even Hendrick Motorsports, a team with 14 championships in 30 years and over 320 wins, does not make a profit.

Hope shone bright for teams earlier this year when it was announced that a seven- year-long deal was inked between NASCAR and Fox Sports, Amazon, TNT/Max, and NBC, valued at $1.1 billion per year. However, when NASCAR returned a proposal where the percentage of income given to teams was lower than current rates, and teams were displeased.

As an organization, NASCAR owns upwards of 70% of tracks they race at. The current business model states that racetracks get 65% of TV revenue, with teams getting 25% and

NASCAR getting 10%. This means that a majority of the year sees the France family take home 75% of revenue, leaving the teams to split 25% upwards of 40 ways.

The numbers sound even worse when NASCAR has repeatedly refused to meet with the Race Team Alliance, and instead insists on meeting with teams individually as to restrict their power in numbers. Last month, NASCAR gave teams the “final draft” at 5 p.m., which consisted of well over 100 pages, and told them that they had to sign by 6 p.m. or else risk their charter being revoked for the 2025 season. All but two teams gave in and signed.

When 23XI Racing refused to sign, many assumed that they would have their charters revoked and face an even steeper climb to the pinnacle of the sport. However, upon filing the lawsuit, it has been revealed that they have hired Jeffrey L. Kessler as their attorney. Kessler is known for his work in obtaining such feats as NCAA athletes the right to profit off their likeness, the U.S. Women’s soccer team being paid more and helping establish a franchise model in the NFL – much like is the goal here.

Litigation is a promising sign, because it shows that the team’s resolve to stop anticompetitive practices by their governing body has not broken yet, it remains to be seen whether this will have any impact on the 2025 season.

Photo Courtesy of Jeremy Sage.