23XI Racing and Front Row Motorsports seem to be fighting for each team. Of the 15 teams with charters expiring at the end of this year, 13 signed extensions last month that are valid for the next seven years. Many club owners protested the terms agreed, but after two years of negotiations they gave in to the sanctions body’s demands. However, both teams continued to stand by their decision not to put pen to paper, leading to a lawsuit from NASCAR. Could this escalate the legal dispute or force NASCAR to settle on better terms? What does this mean for other teams who agree to the proposal? The lawsuit could change the sport forever, impacting drivers, teams and fans for years to come.
Was the NASCAR lawsuit an inevitable outcome?
The storm raged for years. After lengthy negotiations between NASCAR and the teams, the sanctioning body gave them a choice, or gave them a choice, before the playoffs began at Atlanta Motor Speedway in early September. The original deadline was one hour, but was extended to midnight after the owners protested the limited review period of the proposal. NASCAR’s lawsuit says the team could lose its status if it doesn’t sign the contract, which 23XI Racing and Front Row Motorsports are willing to accept.
Journalist Jordan Bianchi commented on the conflict between NASCAR and the two racing teams on The Teardown podcast: “These are just two opposing sides. There’s nothing in common like, “Hey, let’s meet here.” In the middle. As you know, if you give me some, I’ll give it to you.” it means two people have been fighting for two years and they haven’t broken up and are still fighting. Since the controversy has developed since the first day of negotiations, the significance is considerable. “I don’t know how this is not going to end in the jury trial that 23XI wanted,” he said.
When 23XI Racing and Front Row Motorsports hired renowned antitrust attorney Jeffrey Kessler, you knew business was big. The attorney has previously worked on several high-profile cases, including establishing NFL Free Agency and helping the U.S. Women’s National Soccer Team achieve equal pay. Through NASCAR’s lawsuit, they hope not only to keep their contract through the 2025 season, but also to get better terms with the governing body.
Their demands are consistent. Both teams want a bigger share of the revenue through a new media rights deal and a permanent charter from NASCAR to protect their investments. 23XI Racing and Front Row Motorsports also want a say in the decision-making process of the sport, which could lead to increased operating costs in the future. To break their dependence on sponsorship, they want to participate in any business opportunities that arise as the sport continues to grow. It is unlikely that all of the demands will be met, but the sanctioning body is hoping for a deal that avoids a NASCAR lawsuit and forces both sides to compromise.
The owner of Front Row Motorsports shares his reasons for chartering.
Not surprisingly, most NASCAR teams agreed with the sanctioning body’s charter proposal. Given the situation they were in, it was a transaction or financial outcome risk that most people were reluctant to accept. Charters can cost millions of dollars, and race teams are generally reluctant to invest that kind of money to get better terms from a full-time organization. With the stakes higher than ever, what choices should teams make to meet NASCAR’s demands? FRM team owner Bob Jenkins shared his thoughts on why the team agreed to the proposal: Contracts, long-term driver contracts, contracts (done), obligations to crew chiefs and engineers. It takes a lot of courage and stupidity to say no at this point. You have 6 hours to sign the contract. I don’t know how much it would cost our racing team to lose two charters, but it would cost us a lot of money.”
NASCAR has been run by a French family for its 76-year history. The owners remained tight-lipped on a number of issues that were used as leverage in the charterparty negotiations, including financial statements. Jim France said the sport is struggling to break even and in some cases has lost elements it previously used to its advantage. If NASCAR’s lawsuit goes to court, the sanctioning body should disclose its financial situation for the sake of transparency. If discrepancies are discovered, can the remaining 13 teams challenge the existing agreement? Time will tell.
