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Full Throttle into Antitrust: NASCAR’s Charter Dispute & Settlement

 


Few professional sports grant as much centralized authority and control to a governing body as the National Association for Stock Car Auto Racing (“NASCAR”). For decades, NASCAR’s business model has long been a common feature of stock car racing; however, that same structure recently sat at the center of a high-stakes antitrust dispute.[2] In late 2024, 23XI Racing (“23XI”) and Front Row Motorsports (“FRM”) filed a federal antitrust lawsuit against NASCAR and its chief executive officer, Jim France.[3] The teams alleged that NASCAR “[has] used anticompetitive and exclusionary practices [to] enrich themselves at the expense of the premier stock car racing teams.”[4]

 

In their complaint, 23XI, co-owned by Michael Jordan and NASCAR driver Denny Hamlin, and FRM asserted that NASCAR exploited its exclusive control over premier racetracks, media rights, and team participation to impose restrictive conditions that left teams with no decision but to comply.[5] Reinforcing NASCAR’s governing body’s control over key vendors, locations, and equipment, the complaint further alleged that NASCAR required extensive exclusivity agreements for each track, preventing meaningful competition from alternative racing series.[6]

 

NASCAR’s Charter System

 

The focal point of this dispute centers on NASCAR’s charter system, a feature of the stock car racing series that makes it unique among all professional sports. Enacted in 2016, the charter system aimed to stabilize team participation and valuation and to create franchise-like protections within NASCAR.[7] Furthermore, the possession of a charter brings numerous advantages, both competitive and fiscal.

 

On any given weekend, up to 40 teams may participate in a Cup series race. However, under this system, only 36 teams hold a charter, which guarantees entry into every points-paying Cup series race.[8] “Points-paying races” refer to the official NASCAR races in which teams can accumulate points towards championship standings based on finishing order, ultimately determining playoff qualification and the NASCAR Cup Series Champion.[9] Accordingly, charter-holding teams have a competitive certainty not afforded to teams without a charter.


This certainty is highly lucrative for both elite drivers and sponsors who want the chance to compete at every race and to garner the most positive attention for their brand. Beyond guaranteed entry, there are many fiscal benefits granted to a charter-holding team. First and foremost, charter owners retain the exclusive right to sell or transfer their charters on the open market.[10] Charters will vary in value, calculated based on team history and performance, with the most successful teams and those with the richest history garnering much higher values on the market.[11] Chartered teams also receive a share of the $1.1 Billion which NASCAR brings in annually from its TV and media revenue.[12]

 

Despite these stabilizing effects and personal benefits to teams, the charter system has become a source of tension between NASCAR and its teams, particularly as the charter agreement signed in 2016 was set to expire at the end of 2024.[13] In light of this tension, several teams, including 23XI and FRM, declined to sign NASCAR’s proposed extension, arguing the terms failed to provide sufficient economic security and forced teams to waive any ability to bring future antitrust claims against NASCAR.[14] NASCAR’s immediate response was a warning that teams who refused to sign could stand to lose their charter status, creating significant uncertainty about their financial stability and ability to compete in future seasons.[15] In a racing series where even the most successful organizations struggle to break even, 23XI and FRM alleged that NASCAR's actions hinder any ability to grow the sport, leaving competitors “to accept a take-it-or-leave-it economic conditions” if they wish to continue racing.[16]

 

The economic stakes here were substantial for these teams, as charters can be valued at upwards of $40 Million, making any team that loses its charter status face dire threats to its viability.[17] Through their media presence and legal documents, the team owners have continually emphasized the imbalance these propositions create throughout the grid, forcing teams to accept restrictive conditions to maintain and profit from their access to the sport's upper echelon of competition.[18] 

 

Judicial Intervention and the Fight for Charter Control

 

As the case progressed to litigation in October 2024, 23XI and FRM petitioned the court for a preliminary injunction to prevent NASCAR from revoking or recalling team charters while the case was pending.[19] In response, NASCAR argued the teams that refused to sign were in no immediate or irreparable harm, and that the charter system fell squarely within NASCAR’s authority as the sport’s governing body.[20]

 

Initially, a federal judge denied the injunction, holding that the teams failed to demonstrate harm warranting judicial review.[21] However, this ruling was later reversed, and a preliminary junction was soon granted, allowing both 23XI and FRM to retain their chartered status for the remainder of the 2025 season as the case worked its way through the courts.[22] In their holding, the court reasoned that any loss of charter status would result in irreparable harm to teams, stripping them of guaranteed entry to every points-paying Cup series race, and loss of control over valuable contractual rights tied to sponsorship agreements and race participation.[23] This ruling marked a significant early victory for the teams, signaling the court’s reluctance to support provisions that required teams to waive any antitrust claims as a prerequisite to participating.[24]

 

As discovery unfolded, NASCAR attempted to obtain extensive team financial records, including operational costs, sponsorship revenue, and personnel compensation.[25] Team attorneys quickly objected, arguing that NASCAR’s requests were overly intrusive and posed serious risks to teams, as sensitive competitive information would be revealed to rival teams.[26] Siding with the teams, the court restricted the scope of discovery, allowing only specific financial materials to be shared under strict protective measures to preserve confidentiality.[27]

 

Settlement:

 

This litigation underscored broader tensions among the sports' governance and antitrust law, especially in leagues where a single centralized regulatory body has so much control.[28] Ultimately, in the final stage of 2025, the parties reached a settlement before the case fully progressed to trial.[29] The settlement marked the conclusion of months-long litigation, during which NASCAR’s governing body faced intense and unprecedented scrutiny.[30]

 

While the terms of the settlement were never fully disclosed, legal analysts close to the case acknowledged the settlement avoided a very public trial, which could have significantly transformed NASCAR’s governance operations through extensive judicial review.[31] Looking ahead, the lack of a definitive ruling on the merits leaves uncertainty about the case’s true impact on future negotiations between teams and NASCAR.[32]

 

Post Settlement Success

 

Many legal challenges regarding a sport’s fundamental governance structure fail to produce a noticeable effect in the immediate time following a decision. However, that was not the case here, as beyond the courtroom, core rights 23XI and FRM vehemently fought for have brought in millions of dollars merely three races into the 2026 season. Following his victory at Austin’s Circuit of the Americas, 23XI’s driver Tyler Reddick became the first NASCAR driver in the sport’s history to win the first three races of the season consecutively.[33] Reddick’s streak marked the most dominant start to a season in NASCAR history statistically, underscoring the competitive strength of 23XI Racing and why they fought so hard for their charter.

 

While the settlement concluded the formal legal battle between NASCAR and its teams, 23XI’s immediate success on the track and the millions of dollars in prize money and sponsorships highlight the broader stakes behind the dispute. For teams like 23XI, preserving their charter status and securing greater operational certainty was not simply a legal victory, but a foundation for sustained competitive investment.[34] Michael Jordan has only lived to compete, and 23XI’s early-season dominance serves as a stark reminder that the teams’ fight for economic and structural stability was ultimately about protecting their ability to compete and win at the sport’s highest level. Inevitably, as NASCAR’s championship structure moves back to a pure points-based ranking, these early victories could prove pivotal for the North Carolinian team chasing glory.


Christopher Costa (deputy editor-in-chief) is a 2L from Suffern, New York. He graduated from Cornell University with a degree in Industrial and Labor Relations. At Villanova, Chris is a member of the Sports Law Concentration, on the Baseball Arbitration Team, and Co-Philanthropy Chair of the Villanova Sports Law Society. Chris is a lifelong Giants and Yankees fan as well as a die-hard McLaren F1 fan. Following graduation, he hopes to work as in-house counsel for the NFL, MLB, or any motorsport series.


References:

[2] See, Jeff Gluck and Jordan Bianchi, 23XI Racing, Front Row Motorsports sue NASCAR alleging monopolistic practices, The Athletic (Oct. 2, 2024), https://www.nytimes.com/athletic/5810445/2024/10/02/23xi-racing-front-row-nascar-lawsuit/?redirected=1 

[3] Id.

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Id.

[9] See, NASCAR Staff Report, How NASCAR driver points are awarded per race, NASCAR (May. 13, 2020), https://www.nascar.com/news-media/2019/02/08/nascar-driver-points-awarded-per-race/ 

[10] Id.

[11] Id.

[12] Id.

[13] See, Jordan Bianchi, 23XI, Front Row Motorsports can race as chartered teams as NASCAR anti-trust suit continues, judge rules, The Athletic (Dec. 18, 2024), https://www.nytimes.com/athletic/6004542/2024/12/18/nascar-preliminary-injunction-front-row-23xi-racing/ 

[14] Id.

[15] Id.

[16] Id.

[17] Id.

[18] Id.

[19] Id.

[20] See, Associated Press, Judge denies injunction for Jordan’s NASCAR antitrust case, ESPN (Sep. 3, 2025), https://www.espn.com/racing/story/_/id/46150022/judge-denies-injunction-jordan-nascar-antitrust-case 

[21] Id.

[22] See, Jordan Bianchi, 23XI, Front Row Motorsports can race as chartered teams as NASCAR anti-trust suit continues, judge rules, The Athletic (Dec. 18, 2024), https://www.nytimes.com/athletic/6004542/2024/12/18/nascar-preliminary-injunction-front-row-23xi-racing/

[23] Id.

[24] Id.

[25] See, Jordan Bianchi, NASCAR antitrust lawsuit: Judge orders 12 teams to disclose some financial records, The Athletic (Jun. 25, 2025), https://www.nytimes.com/athletic/6451242/2025/06/25/nascar-antitrust-lawsuit-financial-records/ 

[26] Id.

[27] Id.

[28] See, Jordan Bianchi and Jeff Gluck, NASCAR reaches settlement with 23XI, Front Row to end year-long legal saga, The Athletic (Dec. 11, 2025), https://www.nytimes.com/athletic/6881791/2025/12/11/nascar-settlement-23xi-michael-jordan-trial-lawsuit/ 

[29] See, Associated Press, NASCAR settles federal antitrust case filed by 2 teams, ESPN (Dec. 11, 2025), https://www.espn.com/racing/nascar/story/_/id/47276734/nascar-settles-federal-antitrust-case-filed-2-teams 

[30] See, Deb Williams, NASCAR Reaches Settlement With Teams, Grants Permanent Charters, Autoweek (Dec. 11, 2025), https://www.autoweek.com/racing/nascar/a69701519/nascar-23xi-front-row-reach-settlement/ 

[31] See, Duane Morris, NASCAR Settles Antitrust Lawsuit with Racing Teams, Duane Morris (Dec. 15, 2025), https://www.duanemorris.com/alerts/nascar_settles_antitrust_lawsuit_with_racing_teams_1225.html 

[32] See, Deb Williams, NASCAR Reaches Settlement With Teams, Grants Permanent Charters, Autoweek (Dec. 11, 2025), https://www.autoweek.com/racing/nascar/a69701519/nascar-23xi-front-row-reach-settlement/

[33] See, Associated Press, Tyler Reddick Wins first 3 races of season, making NASCAR history, ESPN (Mar. 1, 2026), https://www.espn.com/racing/nascar/story/_/id/48077281/tyler-reddick-makes-nascar-history-circuit-americas-third-straight-win-start-season 

[34] Id.

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