NASCAR Lawsuit: Antitrust Claims, Settlement, and Phelps Exit

The NASCAR antitrust lawsuit was a federal case brought in October 2024 by 23XI Racing and Front Row Motorsports, two Cup Series teams that refused to sign NASCAR’s 2025 charter agreement and accused the sanctioning body of using monopoly power to suppress team revenue. The case went to trial in Charlotte in December 2025 and settled on the ninth day, delivering permanent charters, a bigger cut of revenue, and formal governance rights to all 15 charter-holding teams.1Duane Morris. NASCAR Settles Antitrust Lawsuit With Racing Teams

Why the Teams Sued

NASCAR’s charter system, introduced in 2016, distributed 36 charters that guaranteed teams a starting spot in every race, a share of television and licensing revenue, and a tradable asset. Annual revenue per charter ran an estimated $8 million to $9 million, while running a single car cost around $10 million a year, leaving teams dependent on sponsorships to break even.2Sportico. NASCAR Charter Dispute Explained In exchange, charter agreements barred teams from racing in competing series without NASCAR’s approval and required them to buy standardized parts from NASCAR-designated suppliers under the Next Gen car program.1Duane Morris. NASCAR Settles Antitrust Lawsuit With Racing Teams

The original charter expired at the end of 2024, right as a new seven-year media rights deal averaging $1.1 billion a year was set to begin. Teams organized around four demands: permanent charters, a voice in cost decisions, a share of revenue tied to team intellectual property, and $720 million a year to cover the basics of running competitive cars.3Yahoo Sports. Childress Says Signed NASCAR Charter

On September 6, 2024, NASCAR handed teams a 112-page proposed 2025 agreement with a midnight deadline. Front Row owner Bob Jenkins testified that when he asked Commissioner Steve Phelps for more time, he was told negotiations were “concluded.”4ESPN. Front Row’s Jenkins Says NASCAR Deliberately Rushed Charter Deal Thirteen of fifteen charter-holding organizations signed. The two holdouts were 23XI Racing, co-owned by Michael Jordan and driver Denny Hamlin, and Front Row Motorsports.

The Antitrust Claims

The teams filed on October 2, 2024, in the U.S. District Court for the Western District of North Carolina, naming NASCAR and CEO Jim France as defendants. The complaint alleged Sherman Act violations centered on four theories.5CourtListener. 23XI Racing LLC v. National Association for Stock Car Auto Racing LLC

  • NASCAR used restrictive contract terms and exclusivity provisions to entrench its market power and block any rival series.
  • The September 2024 deadline and refusal to negotiate amounted to coercive, take-it-or-leave-it contracting.
  • Revenue splits did not reflect teams’ contribution to the sport, particularly in light of the new $1.1 billion media deal.
  • Charter provisions barred teams from competing racing events and restricted their use of NASCAR-owned Next Gen parts outside sanctioned races.1Duane Morris. NASCAR Settles Antitrust Lawsuit With Racing Teams

Pretrial Rulings That Shaped the Case

The first fight was over whether 23XI and Front Row could race in 2025 as chartered entries while the lawsuit proceeded. On December 18, 2024, Judge Kenneth D. Bell granted a preliminary injunction, ordering NASCAR to treat the teams as chartered and to complete pending charter transfers from the shuttered Stewart-Haas Racing. In doing so, Judge Bell acknowledged NASCAR’s “100 percent market share” in premier stock car racing.6The Athletic (NYT). NASCAR Antitrust Lawsuit Timeline In January 2025, he denied NASCAR’s motion to dismiss.

The Fourth Circuit reversed the injunction on June 5, 2025. A three-judge panel found the district court had “abused its discretion” in granting a mandatory injunction without the teams meeting the required exacting standard, and rejected the theory that a monopolist cannot require a release of past claims as a condition of doing business.7Justia. 23XI Racing LLC v. NASCAR, Fourth Circuit The ruling stripped the teams of their court-ordered charter status. For much of the second half of 2025, they raced as “open” teams, earning less than one-third the revenue of chartered entries and losing guaranteed starting positions. Court filings described that arrangement as “not economically viable” long term.8NBC Sports. 23XI Racing, Front Row to Run as Open Teams at Dover

NASCAR had filed its own counterclaim in March 2025, accusing the teams and 23XI co-owner Curtis Polk of an “illegal conspiracy” to boycott races, generate negative press, and interfere with NASCAR’s media negotiations.9Racer.com. NASCAR’s Counterclaim Dismissed in Court Judge Bell dismissed it on summary judgment on October 28, 2025, finding NASCAR had not shown antitrust injury. Even if joint negotiations caused NASCAR economic harm, he wrote, “that does not equate to a harm to competition.”10Charlotte Observer. Judge Dismisses NASCAR’s Counterclaims

Less than a month before trial, on November 4, 2025, Judge Bell issued a partial summary judgment ruling that NASCAR holds monopsony power with “effectively 100% market share” in the buyer’s market for premier stock car racing services. He defined the relevant market as “premier stock car racing” and rejected NASCAR’s argument that Formula 1, IndyCar, and other motorsports were ready substitutes, noting NASCAR had used a nearly identical market definition in its own counterclaim.11Motorsport.com. Judge Rules Against NASCAR in Key Area With monopsony established as a matter of law, the trial would turn on whether NASCAR had used that power through anticompetitive acts to harm teams.12Racer.com. 23XI, Front Row Score a Win Against NASCAR as Lawsuit Continues

Inside the Trial

The trial opened December 1, 2025, before a nine-member jury in Charlotte, with sports antitrust litigator Jeffrey Kessler leading the plaintiffs’ team.13Courthouse News Service. Denny Hamlin Opens NASCAR Antitrust Trial With Emotional Testimony

Denny Hamlin testified first, over two days, describing his $10 million personal investment in 23XI and the tens of millions he owed Jordan in loans. He characterized the September 2024 offer as: “We’ve cut this grass so short, we’re down to the dirt,” and confirmed 23XI was seeking $205 million in damages.14The Athletic (NYT). NASCAR Trial: Denny Hamlin Testimony When NASCAR’s lawyers confronted him with past positive public comments about the sport, Hamlin said he had been following “talking points” and that his public persona differed from his private views.

Michael Jordan took the stand December 5 for about an hour. He testified he had put $40 million of his own money into 23XI and spent another $28 million in late 2024 to buy a third charter. He called NASCAR’s business model “financially unsustainable” and “unlawful,” and said he felt he could challenge the sport’s governance because he was a newcomer who “wasn’t afraid.”15The Guardian. Michael Jordan NASCAR Antitrust Testimony In a widely reported moment, he described NASCAR as “run by a family of dictators.”16Forbes. Frustration Increases as Second Week of NASCAR Trial Off to Slow Start

Bob Jenkins testified about losing an estimated $100 million as a team owner and called the charter system “taxation without representation.”17VPM News. Bob Jenkins Testifies About $100M Loss and Insulting Charter Deal Race Team Alliance executive director Jonathan Marshall detailed the negotiation process and revealed that Joe Gibbs, Rick Hendrick, and Roger Penske had initially planned to sign the 2025 agreement, which influenced other owners.16Forbes. Frustration Increases as Second Week of NASCAR Trial Off to Slow Start The plaintiffs also introduced letters that Hendrick and Penske had written to Jim France requesting permanent charters.18Fox Sports. What’s Next: NASCAR Antitrust Lawsuit Over, Questions Linger

The plaintiffs’ lead expert, economist Edward Snyder, calculated combined damages of $364.7 million: $215.8 million for 23XI and $148.9 million for Front Row. His model compared the 25% revenue share teams received under the 2016 charter to a hypothetical 45% share comparable to Formula 1, concluding that all 36 chartered teams had been collectively underpaid by $1.06 billion from 2021 through 2024.16Forbes. Frustration Increases as Second Week of NASCAR Trial Off to Slow Start

Discovery produced internal NASCAR communications that damaged the defense. Text messages showed Commissioner Steve Phelps referring to Hall of Fame owner Richard Childress as “a stupid redneck who owes his entire fortune to NASCAR” who should be “taken out back and flogged.”19Autoweek. Childress Blasts NASCAR After Leaked Texts Judge Bell excluded those messages from evidence, but a separate Phelps text about the short-lived Superstar Racing Experience — writing that NASCAR should “stick a knife in this trash series” — did come in.20Sports Business Journal. Phelps: NASCAR’s Frustration With SRX The plaintiffs used it to argue NASCAR actively sought to eliminate competition, and legal experts described the message as a potential smoking gun.21Sports Business Journal. Antitrust Experts: NASCAR Likely Settled for Millions

The Settlement Terms

On December 11, 2025, the ninth day of trial and while the plaintiffs were still presenting their case, the parties announced a settlement. The jury was dismissed.22Courthouse News Service. NASCAR Teams Reach Settlement in Antitrust Trial The financial terms are confidential. The teams had sought $365 million; antitrust experts estimated NASCAR likely paid between 10% and 50% of that, or roughly $36.5 million to $182.5 million. Combined legal fees for both sides were estimated between $50 million and $100 million.21Sports Business Journal. Antitrust Experts: NASCAR Likely Settled for Millions

The structural changes reshaped the charter system:

The 13 teams that had not been part of the lawsuit received contract amendments reflecting the new terms.22Courthouse News Service. NASCAR Teams Reach Settlement in Antitrust Trial The settlement resolved the antitrust claims without a judicial determination on liability.1Duane Morris. NASCAR Settles Antitrust Lawsuit With Racing Teams

Fallout: Phelps Resigns

On January 6, 2026, Commissioner Steve Phelps announced his resignation, effective at the end of January. The derogatory texts about Childress, combined with the SRX message and public criticism from Bass Pro Shops founder Johnny Morris, had eroded confidence in his leadership. Morris had written a public letter demanding Phelps’s removal. Phelps testified at trial that he regretted the words, had apologized to Childress, and attributed the remarks to “venting out of frustration.”24The Guardian. NASCAR Commissioner Resigns: Steve Phelps

Legal observers pointed to Judge Bell’s monopsony finding and the structural concessions in the settlement as the case’s lasting legacy, effectively creating a collective bargaining framework in a sport historically run under the unilateral control of the France family. Open questions include whether drivers will seek a share of the new revenue and whether NASCAR will restructure other contracts and track agreements to reduce future antitrust exposure.21Sports Business Journal. Antitrust Experts: NASCAR Likely Settled for Millions