A federal judge has denied a motion by two NASCAR teams seeking a preliminary injunction allowing them to be recognized as charter teams as their antitrust suit against the stock car racing company plays out.
U.S. District Court of Western North Carolina Judge Frank Whitney wrote in his legal opinion issued on Friday that “the required irreparable harm must be neither remote nor speculative, but actual and imminent.”
Whitney wrote that “although Plaintiffs have alleged that they will face a risk of irreparable harm, they have not sufficiently alleged present, immediate, urgent irreparable harm, but rather only speculative, possible harm. That is, although Plaintiffs allege they are on the brink of irreparable harm, the 2025 racing season is months away – the stock cars remain in the garage.”
Attorney Jeffrey Kessler, the attorney for the teams, 23XI Racing and Front Row Motorsports, indicated on Friday that his clients will be appealing the ruling, which would require the teams to operate as “open” teams.
Competing as an open team is challenging financially, because open teams don’t get access to equal shares of NASCAR revenues and aren’t even guaranteed a spot in the field for races.
Despite this, both 23XI and Front Row have indicated that they plan to compete in 2025 with or without charters.
“Although we are disappointed that the preliminary injunction was denied without prejudice and as premature, which we intend to appeal, this denial has no bearing on the merits of our case,” Kessler said in a statement on Friday. “My clients will move forward to race in 2025 and fight for a more fair and equitable system in NASCAR that complies with antitrust laws.”
Thirteen of the 15 NASCAR team owners signed charter extensions in September running through the 2031 season, with some calling it a “take-it-or-leave-it” situation, because NASCAR had threatened to do away with the charter system entirely if the team owners didn’t sign.
Before NASCAR instituted the charter system in 2016, teams operated on year-to-year contracts that didn’t guarantee entry into races or a share of the TV or gate money, and team owners often found themselves competing with NASCAR for sponsorships.
The original 2016 charters were four-year deals, and were automatically renewed for a second four-year term ending on Dec. 31, 2024.
The negotiations for the latest extension of the team charters were centered around the demands of team owners for a larger share of the revenue pot.
Curtis Polk, a co-owner, with basketball legend Michael Jordan and Denny Hamlin, of 23XI Racing, told Autoweek that the new charter arrangement will distribute $400 million a year to team owners, in the neighborhood of 13 percent of the $3 billion that NASCAR brings in annually.
“Now, let’s look at the drivers. The drivers, 36 of them, probably average about $3 million a driver, $100 million (total), on a sport that generates roughly $3 billion of revenues. That’s 3 percent. Compare that to basketball, where the players make 49 percent, football, where it’s in 40 percent,” Polk said.
“It’s incredible that the people who go out there and entertain the fans and compete every weekend and risk their lives are only getting 3 percent of the gross revenues of the sport. As those things came to my knowledge, it was apparent that the system needed to be overhauled,” Polk said.
Front Row Motorsports, meanwhile, has not turned a profit in its 20 years in NASCAR, according to a court filing from its owner, Bob Jenkins.
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Chris Graham
