23/11 FRM lawsuit accuses NASCAR of “unlawful monopolization”

23XI Racing and Front Row Motorsports jointly filed an antitrust lawsuit against NASCAR and its CEO Jim France. The motion was filed Wednesday morning in the Western District of North Carolina. The lawsuit alleged that NASCAR and its management engaged in anti-competitive practices that prevented fair competition in the sport.

“We are united by a passion for racing and the thrill of competing and winning,” said a joint statement from 23XI Racing and Front Row Motorsports. “Beyond the racetrack, we share the belief that change is necessary in the sport we love. Together, we brought this antitrust case so that racing can thrive and become a more competitive and fair sport in a way that benefits teams, drivers, sponsors and, most importantly, fans.”

The lawsuit is the next step in an ongoing dispute between the two organizations and NASCAR over the charter agreement. 23XI Racing and Front Row Motorsports were the only two organizations – out of 15 – not signed when the deadline was set for Friday of the Atlanta Motor Speedway race weekend (September 6).

NASCAR and its teams have been in tense negotiations for a new contract for two years. Throughout the process, teams worked to make the charters permanent and provide a greater share of revenue.

In the introduction to the lawsuit, he explains that “the case concerns the unlawful monopolization of leading stock car racing by the French family in order to enrich itself at the expense of the leading stock car racing teams that fans come to watch and that sponsors and broadcasters value.”

23XI Racing and Front Row Motorsports claim that they have suffered damages as a result of violations of antitrust law and are entitled to operate under the 2025 Charter Agreement until the conclusion of the legal proceedings without a waiver of antitrust claims; a permanent injunction to end NASCAR’s exclusionary practices and restore competition in the relevant market; and treble monetary damages for damages suffered as a result of anti-competitive conduct, below market conditions set out in the 2016 Charter Agreement, as well as for damages that organizations suffer under the 2025 Charter Agreement during the course of legal proceedings.

The anticompetitive practices cited in the lawsuit include: NASCAR purchasing most of the premier racetracks that exclusively host NASCAR races; imposing exclusivity agreements on NASCAR-sanctioned tracks; NASCAR acquires competitor ARCA Menards Series (which prevented it from growing into a more sustainable competitor while also becoming a NASCAR feeder series); preventing teams from participating in other stock car racing series; NASCAR retains ownership of next-generation parts and components while requiring teams to purchase these parts and components from single-source suppliers selected by NASCAR.

“The French family has used NASCAR to gain and maintain a position of monopsony over the top stock car racing teams, including through anti-competitive activities, takeovers of other race tracks, race tracks, anti-competitive agreements limiting the availability of race tracks suitable for top-class stock car racing, monopoly rules regarding exclusive the use of specialized “next-generation” cars, and non-compete restrictions that prevent the top stock car teams competing in the Cup Series from also competing in non-NASCAR races.

The lawsuit details what led to the charter agreement because the lack of guaranteed prize money for participating in NASCAR races did not provide a reliable source of revenue for the teams. Cup Series teams have long relied on sponsors to fund race teams. In 2022, Jeff Gordon, vice president of Hendrick Motorsports, said the organization had not made a profit in years, which he then estimated at about 10 years when speaking with Dale Earnhardt Jr. at the beginning of this season.

At the same time, however, NASCAR was benefiting from television deals, which increased in number since the 2001 season with the introduction of major networks such as FOX Sports and TBS. The next media rights deal will be struck in 2025 with FOX Sports, NBC Sports, TNT Sports and Amazon. The lawsuit alleged that NASCAR’s television deals totaled $23.1 billion.

In 2016, NASCAR implemented a charter system, but the lawsuit alleged that while it represented “an improvement over the teams’ prior economic conditions, it was still an anticompetitive product of NASCAR’s unlawful monopoly on top stock car racing in the United States.” The original 2016 agreement stipulated that teams would agree not to participate in other professional racing series.

This provision was extended in the charter agreement through 2025. According to the lawsuit, “while teams were previously barred from participating in any professional non-NASCAR ‘stock car racing’ events, teams with charter agreements through 2025 are now prohibited from participating in any series “car and truck racing not sanctioned by NASCAR.”

The plaintiffs (23XI Racing and Front Row Motorsports) requested a jury trial. By filing an application, they are demanding appropriate discoveries from both NASCAR and France.

As stated in the lawsuit: “It has become apparent that this antitrust proceeding is the only way to free the market for competition and enable plaintiff and other stock car racing teams to obtain fair charter conditions that will be pursued in a competitive market for their services as top-class stock car racing teams serial. A competitive marketplace will enable teams to earn the reasonable profits necessary to reinvest in their operations and create an even more exciting product for stock car racing fans, sponsors and broadcasters. The France family and NASCAR are monopoly tyrants. And oppressors will continue to impose their will to harm others until their targets rise up and refuse to be victims. The moment has come.”

NASCAR has not commented on the lawsuit.