The NASCAR Charter Lawsuit and Richard Childress’s Testimony

The NASCAR charter lawsuit settlement, reached on December 11, 2025, on the ninth day of trial in the U.S. District Court for the Western District of North Carolina, ended an antitrust case brought by 23XI Racing and Front Row Motorsports by giving all 15 charter-holding Cup Series teams permanent “evergreen” charters, a share of international media revenue, and a formal role in NASCAR’s governance.¹² NASCAR also agreed to pay an undisclosed sum to the two plaintiff teams and to restore their combined six charters for 2026, with back pay applied as if they had been chartered in 2025.³

What the Charter Fight Was About

NASCAR introduced its charter system in 2016. The 36 charters guaranteed teams a spot in every race and a share of television and licensing revenue estimated at $8 million to $9 million per charter each year. In exchange, teams raced exclusively in NASCAR events and allowed the sanctioning body to use their intellectual property.⁴⁵

Teams said the math did not work. Running a single Cup Series car cost an estimated $18 million to $20 million a season, well above what the charter payout covered, and teams relied on sponsors for 60 to 80 percent of revenue.⁶ The pressure intensified when NASCAR announced a new media rights deal for 2025 through 2031 worth roughly $7.7 billion, a large jump from the prior $820 million annual figure. Teams wanted a larger cut and permanent charters that would build long-term enterprise value. Jim France, NASCAR’s chairman, would not commit to permanent status.⁴

The breaking point came on September 6, 2024. Around 5:00 p.m., NASCAR delivered a final version of the 2025 charter agreement running more than 100 pages, first demanding signatures by 6:00 p.m. and then extending the deadline to midnight. NASCAR warned that if a “substantial number” of teams refused, the charter system would be eliminated entirely. Thirteen of the fifteen full-time charter-holding organizations signed. The two that did not were 23XI Racing, co-owned by Michael Jordan and driver Denny Hamlin, and Front Row Motorsports, owned by Bob Jenkins.⁷⁸

How the Lawsuit Got to Trial

On October 2, 2024, 23XI and Front Row sued NASCAR and Jim France in the Western District of North Carolina, alleging violations of the Sherman Act through “unlawful monopolization of premier stock car racing.” The complaint cited restrictive noncompete provisions, exclusivity requirements, and diminished revenue allocation.⁹⁷

U.S. District Judge Kenneth Bell denied NASCAR’s motions to dismiss in January 2025 and granted a preliminary injunction letting the two teams race with chartered status in 2025, reasoning that racing as unchartered “open” teams would cause irreparable harm to driver and sponsor contracts tied to charter status. An appellate court later moved to overturn that injunction ahead of the June 2025 Atlanta weekend.¹⁰¹¹

In November 2025, Bell issued the rulings that shaped the trial. He denied NASCAR’s motion for summary judgment and granted the plaintiffs’ motion for partial summary judgment on two questions: the relevant market was “premier stock car racing,” and NASCAR held monopsony power in that market. Bell noted that NASCAR had defined the market narrowly when it served its counterclaim and broadly when defending against the plaintiffs. That left the trial to focus on whether NASCAR maintained its power through anticompetitive conduct and whether the conduct harmed teams.¹²

What Came Out at Trial

Trial began on December 1, 2025, in Charlotte before Judge Bell and a jury. The plaintiffs sought $367 million in damages.¹

Michael Jordan told the court he was “all in” from the moment he decided to sue and was willing to lose the case or be forced out of the sport if it meant “waking up” others to the need for structural change.¹³ Bob Jenkins testified that Front Row had lost $16.3 million between 2021 and 2023 and nearly $70 million over eleven years, and he described being “very hurt” by NASCAR’s delivery of a 112-page agreement with a same-night deadline.¹⁴

Heather Gibbs, co-owner of Joe Gibbs Racing, gave what observers called the most striking testimony of the first week. Describing the pressure to sign, she said: “It’s like you have a gun to your head. If you don’t sign it, everything is gone.” Gibbs had signed, but she made clear she did not view the agreement as fair.¹⁴

Richard Childress, the 79-year-old Hall of Fame owner of Richard Childress Racing, testified on December 9. RCR had signed the 2025 charter agreement and had earlier submitted a declaration supporting NASCAR’s position, but Childress’s live testimony broke sharply from that stance. He said he signed only because refusing would have “put Richard Childress Racing out of business,” and he described NASCAR executive Steve Phelps calling to tell him to “sign or he’d lose his Charter.” He said he would not have signed if he had been “financially able to run his business the way he wanted without it.” Comparing NASCAR unfavorably to the Professional Bull Riders Association, where teams own permanent franchises, Childress said: “It wouldn’t cost NASCAR nothing to give us a franchise. All we want to do is be good partners.”¹⁵¹⁶¹⁷

For NASCAR, Jim France testified that he refused to commit to permanent charters because he lacked a “sightline to the future” and did not want to make a promise he could not keep. He described himself as a “consensus builder” and called the 2025 charter agreement a “fair deal.”¹⁸ Denny Hamlin recounted a 2023 private conversation in which France told him teams “spend too much money” and suggested they cap spending at $10 million per season, about half the average. When Hamlin asked how he could recoup his investment, France reportedly had no answer.¹⁹

The Leaked Text Messages

Discovery produced 2023 text messages between Steve Phelps and Brian Herbst, NASCAR’s chief media and revenue officer, prompted by Childress’s SiriusXM criticism of the Next Gen car and the pending media rights deal. Phelps wrote that Childress “needs to be taken out back and flogged,” called him “a stupid redneck who owes his entire fortune to NASCAR,” and described him as a “dinosaur,” a “malcontent,” and a “total ass-clown.” Herbst agreed Childress was “an idiot.”²⁰²¹

On the stand, Phelps said: “I have a text that I sent and I am not proud of it. Did I say some things I regret? I did.”¹⁸ RCR said in late November 2025 that “legal action is being contemplated and discussed with legal counsel,” though as of the latest available reporting Childress had not filed a separate suit.²²

What the Settlement Changed

After the plaintiffs rested, the parties settled during an approximately two-hour recess on December 11, 2025. Mediator Jeffrey Mishkin had worked with the parties since early 2025. Judge Bell said the settlement was “great for NASCAR, great for the teams, and ultimately great for the fans.”¹²³

The deal reshaped the sport’s economic structure:

All 15 charter-holding teams received permanent “evergreen” charters that NASCAR can no longer revoke at the end of a set term. Renewal of charter terms now requires approval from two-thirds of teams.²
23XI Racing and Front Row Motorsports had their combined six charters returned for 2026, with back pay applied as if they had been chartered for 2025.²
Teams gained a share of NASCAR’s international media rights deals, from which they previously received nothing, plus one-third of the revenue from any new NASCAR business deals using team intellectual property.³
Teams received a formal role in NASCAR governance and a “collective bargaining type” framework at the end of each charter agreement, with financial terms requiring ratification by a two-thirds majority.²⁴
A team-veto mechanism expanded from three strikes to five. If NASCAR implements changes costing at least $500,000 per car without team approval that many times, the exclusivity clause in the charter agreement is voided, freeing teams to race in competing series.²⁴
NASCAR agreed to pay an undisclosed sum to 23XI and Front Row.³

In January 2026, NASCAR sent teams new charter agreements incorporating the settlement’s amendments, giving them a 14-day window to sign or remain under the prior agreement without losing their charters.²⁵

What Happened After

The leaked messages carried into the sponsorship world. Johnny Morris, founder of Bass Pro Shops and a major NASCAR sponsor, wrote a public letter calling for Phelps to step down, saying a commissioner who made such remarks about a Hall of Fame figure “most likely wouldn’t, or shouldn’t, keep his or her job for very long.”²⁶

On January 6, 2026, NASCAR announced that Phelps had resigned as commissioner, effective at the end of the month. The organization called it a “personal decision” and said it did not plan to hire a replacement, with Phelps’s duties distributed among other executives. Jim France called Phelps “one of NASCAR’s most impactful leaders” and credited him with guiding the sport through the COVID-19 pandemic.²⁷²⁸

1
Charlotte Observer. NASCAR Antitrust Lawsuit Settlement
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Jayski. What’s in the Lawsuit Settlement
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The Athletic. NASCAR Settlement 23XI Front Row Details
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Sportico. NASCAR Charter Dispute Explained
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Motorsport.com. How NASCAR’s Ownership Charter System Works
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Black Book Motorsport. NASCAR Charter Agreement Sponsorship
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LBR Cloud. NASCAR Antitrust Complaint
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Forbes. NASCAR Lawsuit Escalates as Teams Rally to Defend Charter System
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USA Today. Front Row Motorsports Jordan Racing NASCAR Lawsuit Timeline
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ESPN. Judge Denies NASCAR Motions Dismiss Antitrust Lawsuit
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Motorsport.com. What Does It Mean to Race Without Charters in NASCAR
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Jayski. Judge Bell Denies NASCAR Motion for Summary Judgement Rules on Market Definition
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CBS News. Michael Jordan NASCAR Lawsuit Vision for Sport
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Hagerty. 5 Tough Takeaways From Week One of the NASCAR Trial
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Jayski. Day Seven of the NASCAR Antitrust Lawsuit Sees Testimony From Richard Childress
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Toby Christie. Richard Childress Says Teams Had No Choice in 2025 Charter Deal
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Forbes. Plaintiffs Wrap Up Testimony in NASCAR Trial as the Defense Takes Over
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Fox Sports. What to Know About NASCAR Antitrust Lawsuit
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The Athletic. NASCAR Michael Jordan Trial Denny Hamlin Testimony
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The Athletic. NASCAR Richard Childress Steve Phelps Texts
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RACER. Childress Considering Legal Action Over NASCAR Messages
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Motorsport.com. Richard Childress Exploring Legal Action Over NASCAR President’s Texts
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ABC7 News. NASCAR Settles Federal Antitrust Case Filed by Two Teams
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Fox Sports. What’s Next NASCAR Antitrust Lawsuit Over Questions Linger
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Daily Downforce. NASCAR Settlement Update Teams Issued New Charter Agreements
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Los Angeles Times. NASCAR Commissioner Steve Phelps Step Down
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USA Today. Steve Phelps Resigns Text Messages NASCAR Commissioner
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The Athletic. NASCAR Steve Phelps Resigns Commissioner Leadership Racing